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




 
                      HEARING TO ASSESS IMPACT OF
                       RECENT CHANGES TO PROGRAMS
                     ASSISTING LOW-INCOME FAMILIES

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

                                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

                               __________

                             MARCH 6, 2007

                               __________

                           Serial No. 110-17

                               __________

         Printed for the use of the Committee on Ways and Means



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                      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 27, 2007, announcing the hearing............     2

                               WITNESSES

Sidonie Squier, Director of the Office of Family Assistance, 
  Department of Health and Human Services........................     6

                                 ______

Robin Arnold-Williams, Ph.D., Secretary of the Washington State 
  Department of Social and Health Services, Olympia, Washington..    34
David A. Hansell, Esq., Acting Commissioner, New York State 
  Department of Temporary Disability Assistance, Albany, New York    39
Nancy K. Ford, Administrator, Division of Welfare and Supportive 
  Services, Carson City, Nevada..................................    46
Mary Dean Harvey, Director, Georgia Department of Human Resources 
  Division of Family and Children, Atlanta, Georgia..............    53
Bruce Wagstaff, Director, Sacramento County Department of Human 
  Assistance, Sacramento, California.............................    57

                       SUBMISSIONS FOR THE RECORD

American Payroll Association, statement..........................    92
Baghboudarian, Shoushan, Child Support Officer II, letter........    93
Block, RaeLynn, statement........................................    94
Boggs, George R., American Association of Community Colleges, 
  letter.........................................................    95
Borsa-Valadez, Vera, statement...................................    96
Chen, Li-Wen, statement..........................................    97
Department of Social Services, Asheville, NC, Buncombe County, 
  statement......................................................    97
Domestic Relations Association of Pennsylvania, letter...........    98
Gilreath, Brenda, statement......................................    98
Goodwill/Easter Seals, St. Paul, Minnesota, statement............   100
Hansen, Dave, letter.............................................   101
Hill, Lawrence, Los Angeles, CA, statement.......................   102
Illinois Department of Healthcare and Family Services, statement.   102
Keesling, Gregg, Indianapolis, IN, statement.....................   104
Kochakji, Ann, statement.........................................   104
Los Angeles County Child Support Services Department, statement..   104
Marathon County Department of Social Services, statement.........   105
Minnesota Inter County Association, statement....................   105
National Association for State Community Services Programs, 
  statement......................................................   107
National Child Support Enforcement Association, statement........   111
NCSL, statement..................................................   112
New Jersey Department of Human Services, Trenton, NJ, statement..   114
Ohio Child Support Enforcement Agency, Columbus, OH, statement...   117
Racine County Child Support Department, Racine, WI, statement....   118
Ross, Leah, Culver City, CA, statement...........................   121
Samuels, Faredeh, statement......................................   121
Washington County, WI, statement.................................   122
Wells, Rob, letter...............................................   123
Wisconsin Child Support Enforcement Association, statement.......   124


                      HEARING TO ASSESS IMPACT OF
                       RECENT CHANGES TO PROGRAMS
                     ASSISTING LOW-INCOME FAMILIES

                              ----------                              


                         TUESDAY, MARCH 6, 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 11:00 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 27, 2007
ISFS-2

             McDermott Announces Hearing on Recent Changes

               to Programs Assisting Low-Income Families

    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 to review the 
impact of recent legislative changes to low-income programs within the 
Subcommittee's jurisdiction. The hearing will take place on Tuesday, 
March 6, 2007, at 11:00 a.m. in room B-318 Rayburn House Office 
Building.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. 
Witnesses will include a representative from the Department of Health 
and Human Services (HHS), as well as State officials responsible for 
administering the Temporary Assistance for Needy Families (TANF) 
program, child care assistance and child support enforcement. 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:

      
    The Deficit Reduction Act of 2005 (DRA) (P.L. 109-171) includes a 
number of significant changes to programs serving low-income families, 
especially TANF and child support enforcement. Perhaps most 
significantly, the DRA effectively requires most States to increase the 
number of welfare recipients enrolled in federally-defined work 
activities or to further reduce the number of families receiving cash 
assistance. The DRA also applies Federal requirements to programs 
administered solely with State funds (if those dollars are counted 
towards a State's spending requirement under the TANF program). 
Furthermore, the DRA required HHS to issue regulations further defining 
how and if activities may count toward the Federal work participation 
requirements. As issued by HHS, these new rules restrict States from 
counting certain activities, such as education and training, to the 
extent permissible under prior law. In addition, the regulation calls 
for States to implement new monitoring procedures to determine 
compliance with the TANF work requirements.
      
    The DRA also modifies Federal funding for various aspects of the 
child support enforcement system. Most notably, effective October 1 of 
this year, the law will prohibit States from receiving Federal matching 
payments when they spend incentive funds that are awarded to States 
based on the performance of their child support systems. The 
Congressional Budget Office estimated this change would reduce overall 
funding for enforcing child support orders and would therefore reduce 
the total amount of child support that would otherwise be collected by 
$8.4 billion over the next decade.
      
    In announcing the hearing, Chairman McDermott stated, ``Our first 
Subcommittee hearing looked broadly at poverty and economic opportunity 
in America. A reasonable second step is to assess the potential impact 
of recent changes to programs serving low and moderate-income families. 
We will hear from those running the programs to determine if these 
changes are helping or hurting State and local efforts to assist needy 
families and to promote true self-sufficiency.''

FOCUS OF THE HEARING:

      
    The hearing will focus on recent legislative changes to certain 
programs serving needy families.
      

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 March 20, 
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. Good morning. Good to see a bunch of 
people here to talk about an important subject.
    A few weeks ago, our Subcommittee broadly reviewed economic 
opportunity and poverty in America. Today's hearing is the next 
logical step in assessing the impact of recent changes to 
programs assisting low-income families.
    As I listened to the testimony from those responsible for 
administering these programs, my bottom-line question today 
will be this: Are the recent changes helping, hurting, or 
irrelevant to the goal of lifting families out of poverty? I 
really think that is what this is all about.
    We will specifically review changes made by the Deficit 
Reduction Act (DRA) (P.L. 109-171). It was signed by President 
Bush about a year ago. The DRA generally requires States to 
increase the number of welfare recipients enrolled in 
federally-defined work activities, or to further reduce the 
number of families receiving cash assistance.
    Additionally, the new regulations required by law and 
issued by the Department of Health and Human Services (HHS) 
reduce the discretion of States to determine which activities 
may count toward the Federal requirements.
    Finally, DRA also included a net reduction in Federal 
funding for enforcing child support orders.
    I want to quickly highlight four charts that relate to the 
potential impact of DRA, as well as to my bottom line of 
helping families escape poverty.
    The first chart shows that only 29 percent of poor children 
receive Temporary Assistance for Needy Families (TANF) today, 
compared to 62 percent a year ago. Or a decade ago. This 
precipitous decline in the percentage of poor children 
receiving assistance from the program for needy families, I 
believe, ought to concern us. In my view, encouraging future 
caseload declines without regard to employment and poverty is a 
mistake. Caseload reduction during a time of rising poverty is 
really not a success story.
    The second chart illustrates the barriers standing between 
many TANF recipients and self-sufficiency. Over 40 percent, as 
you can see there, don't have a high school education, 45 
percent have some kind of impairment or disability, and then, 
finally, 30 percent have been the victims of domestic violence 
in the last year. Now, I do not see any benefit in reducing the 
State's flexibility to help TANF recipients overcome these 
barriers to employment.
    The third chart is based on a projection from the 
Administration's budget, and shows over 300,000 fewer children 
receiving child assistance by 2012. I mean, that is a line that 
is going down, and has gone down, for the last 10 years.
    This is basically a reflection of the fact that child care 
funding is not keeping pace with inflation. Even with the 
slight increase that we had in the last DRA--I think it was 
about a billion dollars--someone needs to explain to me some 
time today how declining child care assistance is consistent 
with increased work requirements.
    If we are asking parents--if we really care about kids, and 
that's what this is really all about, I mean, that's what AFDC 
was, aid for dependent children, and now TANF is supposed to be 
about children, then how can you cut the child care money and 
then still--and let the money not keep up--and still expect 
more people to go out to work?
    The fourth, and final, chart highlights cost effectiveness 
of child support enforcement, which collects $4.58 in child 
support for every $1 in enforcement. I participated in the 
State of Washington many years ago--this is now 25 years ago--
in the increase in money we put into child support enforcement. 
I really think that it is hard to justify the cuts that were 
made in the last budget.
    This is a wise investment on behalf of families. I, 
therefore, question any policy that reduces the Federal 
commitment to ensure that both parents--both parents--take 
responsibility for their kids. I look forward to hearing the 
witnesses' views on the impact that the DRA will have on other 
issues. I yield to the ranking Member, Mr. Weller. Mr. Weller?
    Mr. WELLER. Thank you, Mr. Chairman, and thank you for 
convening this hearing today. Too often, we in Congress pass 
legislation and never look back to see what works and what 
doesn't.
    Today's hearing follows in the best traditions of the 
Subcommittee, in reviewing the effects of laws we help craft, 
whether that involves a 1996 welfare reforms, efforts by some 
to avoid paying unemployment taxes, or many other issues. I 
hope we can continue this kind of oversight, so we can hold 
programs accountable for achieving the goals taxpayers rightly 
expect.
    When we passed the 1996 Welfare Reform Law, the Federal 
Government made a deal with the States. States were given a 
large amount of fixed Federal cash welfare funds each year, 
plus increased funds for child care, and broad targets to limit 
welfare dependence, and eventually engage 50 percent of welfare 
recipients in work and related activities.
    Unprecedented declines in welfare dependence followed, 
which is good, because most people who leave welfare do so for 
work. Earnings for low-income families rose, and poverty sank 
to near-record lows, but States' own reports suggested that 
only about 30 percent of current welfare recipients were 
engaged in work and other productive activities, and nearly 60 
percent of recipients were doing no hours of work or training 
for their checks.
    So, the House, building on recommendations by the 
Administration and others, passed legislation to update and 
extend the TANF program. The House passed such legislation 
three times in 2002, 2003, and 2005, in fact.
    The Senate failed to follow suit, and ultimately, a scaled-
down version of this legislation was included in what became 
known as the DRA, which passed both houses and was signed into 
law. What this legislation did is the topic of today's hearing.
    In short, the DRA extended and rebooted the 1996 welfare 
reforms. States will receive the same Federal TANF block grant 
as before. As in 1996, child care funding was once again 
increased by $1 billion. State targets to limit welfare 
dependance and engage 50 percent of current adults on welfare 
and work and other productive activities were renewed. Already, 
these revisions are having effects.
    First, although little reference was made to this fact in 
the testimony I have read, I assume all States have received 
their share of the $400 million in increased funding for child 
care the DRA provided for Fiscal Years 2006 and 2007. Anyone 
here who has not received theirs, I certainly want to know.
    I similarly assume States are putting this to good use to 
support more families in work, as intended. I look forward to 
hearing more about that. Overall, data in the President's 
budget suggests this will help one million more children 
receive child care services in the coming years.
    Second, welfare dependence is once again dropping 
significantly, with a decline last year surpassing any year 
since 2001. That will free even more resources for child care 
and other work supports, just like occurred after the 1996 
welfare reforms.
    Third, as we will hear, child support changes are 
encouraging States to re-engineer their programs to better 
serve their customers. In her testimony, Georgia's Director of 
Family and Children Services notes that they have taken up this 
challenge, and reduced the average processing time for new 
child support cases from 71 days to 1. That is, in Georgia, 
they have same-day service. That's a revolution in customer 
service, particularly in these programs.
    Several of our guests comment on a provision that denies 
passports for people who owe more than $2,500 in child support. 
HHS reports that this has doubled child support collections 
associated with this effort. It has been a success.
    I recognize not everyone here today is supportive of all 
the provisions of the DRA, and that's not surprising. I look 
forward to learning more about suggested improvements, but we 
all know that any change comes hard when you're talking about 
government programs. Many of those in this room, including some 
on this dais, opposed the original 1996 welfare reforms, which 
have certainly shown dramatic, positive impact.
    So, perhaps it should not surprise us today that some hold 
a dim view about the continuization of these reforms, or their 
implementation in ways that hold Government more accountable 
for results, but that is really what we should be after. I 
believe the results for the family involved say more.
    I welcome our guests, and I look forward to their 
testimony. Again, thank you, Mr. Chairman, for this hearing 
today.
    Chairman MCDERMOTT. Thank you very much. Anybody else who 
has opening statements can be entered into the record. All the 
witnesses, your statements will be entered fully into the 
record.
    The other thing is, when you speak--all of you--please put 
your microphone on, because if you don't you won't be heard on 
television. We might hear you, but C-SPAN is covering this, and 
so you really need to touch that. That is just sort of a side 
note.
    Today we have Ms. Squier, the director of the office of 
family assistance from HHS. She is here to talk about this 
program. She is here because Wade Horn, who is ordinarily here, 
is dealing with a family illness, and unfortunately, is unable 
to be here. Our feelings are with Mr. Horn. I hope you will 
tell him that we wish a speedy recovery for his family member.
    So, Ms. Squier, you are on the record.

 STATEMENT OF SIDONIE SQUIER, DIRECTOR OF THE OFFICE OF FAMILY 
      ASSISTANCE, DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Ms. SQUIER. Mr. Chairman, Mr. Weller, and Members of the 
Subcommittee, I am pleased to appear before you today to 
discuss the next phase of welfare reform. I would like to take 
this opportunity to express my thanks to you, Mr. Chairman, for 
your leadership, and to the Committee, for your continued 
efforts to reform the welfare system and improve the lives of 
low-income Americans.
    The enactment of welfare reform in 1996 has had a profound, 
positive impact on our Nation's most vulnerable families. Many 
observers now consider the creation of TANF as one of the 
greatest social policy achievements in American history.
    Despite TANF's successes--and, indeed, because of them--it 
was time to renew welfare reform. The key to TANF's success was 
work. In 2002, the minimum work participation rates have been 
50 percent for all families, and 90 percent for 2-parent 
families, but because the statutory rates were reduced by the 
percentage of caseload decline since 1995, in practice, States 
needed very little work participation to meet the adjusted work 
standards.
    In 2004, 17 States faced an overall participation rate of 0 
percent, and nationally, the participation rate was only 6 
percent. As a result, nearly 60 percent of TANF families did 
not have an adult with even 1 hour of reported work. It was 
time to revise this trend, so that all TANF recipients would 
have the opportunity to become self-sufficient.
    The DRA of 2005 reauthorized the TANF program through 2010, 
with a renewed focus on work, program integrity, and 
strengthening families through marriage promotion and 
responsible fatherhood.
    First, the law changed the base year of the calculation of 
the caseload reduction credit from 1995 to 2005. Recalibrating 
the caseload reduction credit has the effect of increasing the 
work participation requirements. For most States, we estimate 
that in 2007, the overall work participation requirement will 
be between 40 and 50 percent after the caseload reduction 
credit is factored in.
    Second, the law added to the work participation rates 
families in separate State programs. These separate State 
programs artificially diminish the true size of State caseload, 
and often increased its participation rate through a simple 
shift in funding streams.
    Third, the law replaced the high performance and 
illegitimacy reduction bonus with $150 million a year fund for 
competitive grants to promote healthy marriages and support 
responsible fatherhood.
    Fourth, the DRA increased Federal child care spending by 
$200 million per year. With the State matching funds required 
to draw down these additional dollars, new child care funding 
totals $1.8 billion, over 5 years.
    Congress also required HHS to do a number of things through 
regulation: to define each of the 12 work activities, to ensure 
that participation rates were comparable across States; to 
clarify who is a work-eligible individual; to ensure that State 
and internal control procedures result in accurate and 
consistent work participation information; and to establish a 
new penalty for failing to maintain adequate procedures to 
verify reported work participation data.
    On June 29, 2006, HHS issued an interim final rule, 
implementing key provisions of the DRA. This rule has five key 
components.
    First, they create uniform common sense definitions that 
count only those activities that actually help move people into 
jobs. These new definitions are necessary, because the 1996 
TANF legislation allowed each State to define work, which may 
have allowed for calculations of work participation rates to 
vary. Defining work activities is necessary for consistent 
measurement, and ensures an equitable and level playingfield 
for States.
    Second, the interim final regulation requires uniform 
methods for reporting hours of work. They continued to require 
States to count only actual hours of participation. However, we 
build in more flexibility by allowing States to receive credit 
for the first time for excused absences and holidays.
    Third, the new regulations require supervision for all 
activities. Daily supervision means that a responsible party 
has daily responsibility for oversight of the individual's 
participation, not necessarily daily contact with the 
participant. The goal of such supervision is to ensure that 
individuals are participating and making progress in their 
assigned activities.
    Fourth, the new regulations add some child-only cases to 
the work participation requirements, primarily those in which 
the needs of the parents have been removed from the grant, due 
to a sanction or time limit. The vast majority of child-only 
cases, however, remain exempt from work participation rates.
    Finally, the new regulations require States to establish 
and maintain work participation verification procedures and 
internal controls to ensure compliance with the procedures. 
States must have in place by September 30th of this year a work 
verification plan to validate work data.
    Mr. Chairman, I am sure you will agree with me that it's 
our shared desire to improve the lives of the families who 
have--or would otherwise become--dependent on welfare. The 
Secretary, the Assistant Secretary, and I stand ready to work 
with you, our State and community partners, to make economic 
independence within the reach of America's neediest families. I 
would be happy to answer any questions you have.
    [The prepared statement of Ms. Squier follows:]

     Statement of Sidonie Squier, Director of the Office of Family 
          Assistance, Department of Health and Human Services

    Mr. Chairman, Mr. Weller, and members of the Subcommittee, I am 
pleased to appear before you today to discuss the next phase of welfare 
reform. I would like to take this opportunity to express my thanks to 
you, Mr. Chairman, for your leadership and to the Committee for your 
continued efforts to reform the welfare system and improve the lives of 
low-income Americans.

Temporary Assistance for Needy Families
    The enactment of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 has had a profound, positive impact on our 
nation's vulnerable families. In particular, the Temporary Assistance 
for Needy Families program--TANF--is a remarkable example of a 
successful Federal-State partnership. With heightened expectations of 
personal responsibility and greater opportunities for improving their 
economic circumstances, millions of families have moved from dependence 
on welfare to the independence of work. We have provided the necessary 
work supports, child care, and transportation to ensure that parents 
can get to work and stay there without worrying about the safety and 
well-being of their children. Many observers now consider the creation 
of TANF just over 10 years ago as one of the greatest social policy 
achievements in American history. Of particular significance since 
1996:

      Welfare rolls have declined by 60 percent between August 
1996 and September 2006, from 4.41 million to 1.76 million families. 
The number of families on welfare is now lower than at any time since 
1969.
      Unprecedented numbers of former recipients have gone to 
work. Employment among single mothers has increased. The percentage of 
never-married working mothers increased from 49.3 percent in 1996 to 
62.0 percent in 2005.
      Child support collections have nearly doubled.
      Overall child poverty rates declined from 20.5 percent in 
1996 to 17.6 percent in 2005, with 1.6 million fewer children in 
poverty. The poverty rate among African American children declined from 
39.9 percent to 33.5 percent. The poverty rate among Hispanic children 
declined from 40.3 percent to 28.3 percent. Although the poverty rate 
has increased some since 2000 as a result of the 2001 recession, the 
addition of nearly 7.5 million new jobs since August 2003 portends 
favorably for renewed improvement in poverty rates.
      Out-of-wedlock childbearing among African-American teens 
has declined nearly 20 percent from 1996 to 2005.
      The unwed birth rate for all teens age 15-19 has declined 
since its peak in 1994.

    Despite TANF's successes, and indeed, because of them, it was time 
to renew welfare reform. The key to the success of welfare reform was 
work. In theory, since FY 2002 the minimum work participation rates had 
been 50 percent for all families and 90 percent for two-parent 
families. But because the statutory rates were reduced by the 
percentage of caseload decline since FY 1995, in practice States needed 
very little work participation from their caseload to meet these 
adjusted work standards. As a result, in FY 2004, 17 States and two 
Territories faced an effective overall participation rate of 0 percent, 
and nationally the effective participation rate was only 6 percent. 
Only 32 percent of TANF families with an adult participated for enough 
hours to count and almost three-fifths of TANF adults had no reported 
hours in work activities, nevertheless using up their time-limited 
benefits. It was time to reverse this trend so that all TANF recipients 
would have the opportunity to become self-sufficient.

The Deficit Reduction Act of 2005
    The Deficit Reduction Act of 2005 (DRA) reauthorized the TANF 
program through fiscal year 2010 with a renewed focus on work, program 
integrity, and strengthening families through marriage promotion and 
responsible fatherhood. Signed into law by President Bush on February 
8, 2006, the DRA maintained State flexibility, retaining many 
provisions of the original TANF law, but included important changes to 
improve the effectiveness of the program.

What Stayed the Same?
    The Deficit Reduction Act kept nearly all of the TANF provisions 
enacted in the original welfare reform law. Of particular note, the law 
retained the requirement that a State must achieve a 50-percent overall 
work participation rate by engaging adults in the 12 allowable work 
activities for specified hours each week and that it must also achieve 
a 90-percent two-parent rate by similarly engaging families in work 
activities for certain, specified hours. The work activities and the 
hours needed to count a family toward the work participation rates also 
did not change. The DRA maintained the penalty associated with failing 
to meet these work requirements.
    The DRA also maintained other key provisions of prior law. It:

      Fully funded the TANF block grant through FY 2010 at 
$16.6 billion per year.
      Continued to require States to make maintenance of effort 
(MOE) contributions to support families and children.
      Preserved the $2 billion Contingency Fund to help States 
in the event of an economic downturn or recession.
      Extended the Supplemental Grants for the 17 States with 
historically low grants per poor person and/or high population growth 
in the amount of $319 million through FY 2008.
      Retained the five-year cumulative lifetime limit on 
Federal TANF cash assistance to ensure that welfare is temporary and 
does not become a way of life.

What Changed?
    Despite the fact that it retained the existing structure and many 
fundamental aspects of the original TANF law, the DRA did make 
important statutory changes to promote work and accountability by 
requiring States to engage more TANF families in productive work 
activities leading to self-sufficiency. The new law also required HHS 
to promulgate rules in several of these areas.
    First, the law changed the base year of the calculation of the 
caseload reduction credit from FY 1995 to FY 2005. The caseload 
reduction credit had inadvertently undermined TANF work requirements. 
While the statutory work participation rates did not change, 
recalibrating the caseload reduction credit has the effect of 
increasing the work participation requirements. Without the benefit of 
the built-up credit, States must engage 50 percent of all cases with 
adults and 90 percent of two-parent families in work activities. For 
most States, we estimate that in FY 2007, the overall work 
participation requirement will be between 40 and 50 percent, depending 
upon the amount of caseload reduction they had over the course of FY 
2006 compared to the new baseline of FY 2005.
    Second, the law included in the work participation rates families 
in separate State programs, which were previously excluded from the 
rates. Under prior law and rules, some States moved families to 
programs essentially identical to their TANF programs but funded with 
State money used toward the MOE requirement. In such cases, these 
separate State programs artificially diminished the true size of a 
State's caseload, thus increasing a State's participation rate through 
a simple shift in funding streams. Now, those families are part of the 
participation rate, giving a more realistic picture of the State's work 
achievement with its whole caseload.
    Third, the law eliminated provisions for the High Performance Bonus 
and the Illegitimacy Reduction Bonus and replaced them with a $150 
million-a-year research, demonstration, and technical assistance fund. 
This fund is for competitive grants to strengthen family formation, 
promote healthy marriages, support responsible fatherhood, and improve 
coordination between Tribal TANF and child welfare services. We know 
that programs and solutions work best when they are designed to address 
local needs. These funds will enable neighborhoods, community, and 
religious groups to try innovative approaches to encourage healthy 
marriages and promote involved, committed, and responsible fatherhood.
    Fourth, the DRA expanded a State's ability to meet its maintenance-
of-effort (MOE) requirement. States may now count expenditures that 
provide pro-family benefits and services to anyone, without regard to 
financial need or family composition, if the expenditure is to prevent 
and reduce the incidence of out-of-wedlock births (TANF purpose 3), or 
encourage the formation and maintenance of two-parent married families 
(TANF purpose 4).
    Fifth, it increased Federal child care funding by $200 million per 
year, $1 billion over five years. With the inclusion of State matching 
funds required to draw down these additional dollars, new funding for 
child care totals $1.8 billion over five years. This expanded support 
for child care, despite dramatically smaller TANF caseloads across the 
country, means that the DRA's renewed focus on work can be put in 
practice in the labor market, ensuring that TANF recipients can find 
and keep employment without having to worry about child care needs.
    Congress also required HHS to do a number of things through 
regulation:

      To define each of the 12 countable work activities. This 
came about primarily because a U.S. Government Accountability Office 
study reported that there was great variation in State definitions of 
work activities. As a result, State participation rates were not 
comparable. Of the activities, the underlying statute also specified 
which nine or ``core activities'' count towards meeting the first 20 
hours of a 30-hour requirement. Any additional hours needed to meet the 
requirement can come from any of three ``non core activities'' or from 
``core activities.'' Under the statute, non-core activities may not 
count in core hours.
      To clarify who is a work-eligible individual. In addition 
to families with an adult receiving TANF assistance, who were already a 
part of the work participation rates, the DRA required us to include 
such families receiving assistance under a separate State program and 
to specify the circumstances under which a parent who resides with a 
child receiving assistance should be included in the work participation 
rates. This effectively adds selected child-only cases to the rates. To 
ensure that State internal control procedures result in accurate and 
consistent work participation information. States must establish and 
maintain work participation verification procedures that are based on 
regulations promulgated by the Secretary. To establish a new penalty in 
the event that a State fails to establish and maintain adequate 
procedures to verify reported work participation data.

The Interim Final Rule
    On June 29, 2006, HHS issued an interim final rule implementing key 
provisions of the DRA. During the comment period we received many 
comments on those regulations including 470 individual letters; some 
were lengthy submittals addressing a host of different specific topics. 
Comments also included transcripts from five listening tour stops that 
we conducted around the country last summer. These sessions offered an 
opportunity for representatives from State agencies, legislators, and 
other stakeholders to provide formal comments and to engage in a 
dialogue with ACF staff about the law and interim rules. We are now 
considering all the comments we received during our formal comment 
period and are not at liberty to discuss the specific aspects of how 
the final regulations may or may not change in response to those 
comments. However, I would like to say a few words about the interim 
final rules and would be happy to answer questions specifically about 
them.
    The interim final regulations have five key components. Within each 
area, the rules provide States expanded flexibility to help meet their 
work participation rates and other requirements of the law.
    First, they create uniform, common-sense definitions of work that 
count only those activities that actually help move people into real 
jobs. These new definitions are necessary because the 1996 TANF 
legislation allowed each State to define ``work,'' which may have 
allowed for inconsistent calculations of work participation rates. Some 
States included activities in their definitions of work activity that 
others did not, such as:

      Bed rest;
      Physical rehabilitation, which could include massage and 
regulated exercise;
      Activities to promote a healthier lifestyle that will 
eventually assist the recipient in obtaining employment, such as 
personal journaling, motivational reading, and weight loss promotion;
      Helping a friend or relative with household tasks and 
errands.

    It is important to remember that the DRA did not instruct HHS to 
add, delete, alter, or change these 12 activities. Nor did Congress 
direct HHS to comment on the completeness of this list or whether some 
core activities should be non-core activities. Defining work activities 
is necessary for consistent measurement and ensures an equitable and 
level playing field for the States. Because the statute provides 12 
distinct activities, we tried to define them as mutually exclusive, 
while still leaving flexibility for States to address the critical 
needs of families.
    Here are some examples of the new definitions in the Interim Final 
rule:

       ``Employment'' is defined as full--or part-time paid 
work.
      ``Work experience'' (or working ``off the grant'') means 
performing work for an employer that provides job skills and work 
habits in exchange for the TANF grant.
      ``Job search and job readiness assistance'' means seeking 
or preparing for employment which could include short-term substance 
abuse treatment, mental health treatment, or rehabilitation activities.
      ``Community service'' is structured work that directly 
benefits the community via public or nonprofit organizations.
      ``Vocational educational training'' means training that 
is directly related to employment that does not require a college 
degree, but which could include remedial and basic education in a work 
context.

    These definitions clearly tighten the focus on work. For example, 
they require daily supervision in all activities used to satisfy work 
requirements. They also require that education and training activities 
relate directly to a specific job or occupation.
    At the same time, they also allow States to count participation in 
activities that many States previously did not count. For example, the 
interim final rule included as part of the definition of job search and 
job readiness assistance, substance abuse treatment, mental health 
treatment, and rehabilitation activities for those who are otherwise 
employable. Although a few States included some or all of these 
activities in the past most did not count participation in such 
treatment or services toward the participation rates before. (A review 
of State plans by the Congressional Research Service found that just 14 
States counted these activities at all and five of them did so as part 
of the job search and job readiness assistance activity.) Job search 
and job readiness assistance is a time-limited activity under the law, 
so States cannot get participation credit for them without limit, but 
from what we have heard, many more States than ever did before will be 
counting these activities now that we have added them to the 
definition. We included them as job readiness activities (as opposed to 
some other activity that is not subject to a time limit) because it was 
the only place we thought it made sense to include them. In fact, these 
services do help individuals become ready to work and thus fit well 
within that work component.
    Second, the new regulations require uniform methods for reporting 
hours of work, as required by the DRA. They allow States to count only 
actual hours of participation, but, for the first time in the history 
of the TANF program, the interim final rule grants States credit in the 
work participation rates for holidays and additional excused absences 
for individuals in unpaid activities. The original TANF rules that came 
out in 1999 let States count paid leave days as participation, but not 
unpaid days or days in unpaid activities. This is a significant change 
from past policy and will make it considerably easier for States to 
meet the work participation rates.
    Another new innovation that enhances State flexibility in meeting 
work participation rates is the provision in the interim final rule for 
``FLSA deeming.'' Under this provision, if a work-eligible individual 
participating in work experience or community service program--two 
activities that are subject to the minimum wage under the Fair Labor 
Standards Act--works the maximum hours permitted without incurring a 
minimum wage violation under that law but falls short of the hours 
needed to meet the TANF core activities requirement, we ``deem'' them 
to have met that requirement. This is likely to be particularly 
important for families in the two-parent rate, since the hours 
requirement is higher there.
    Third, the new regulations specify the type of documentation needed 
to verify reported hours of work and require daily supervision. Daily 
supervision means that a responsible party has daily responsibility for 
oversight of the individual's participation, not necessarily daily 
contact with the participant. The goal of such supervision is to ensure 
that individuals are participating and making progress in their 
assigned activities. A work site sponsor, classroom instructor, 
contracted service provider, community-based provider, job search 
instructor, treatment provider, or even a TANF agency employee could 
fulfill that role. In addition, the supervision need not involve in-
person contact, but can be by telephone or electronic contact where 
those methods are suitable.
    We established a range of documentation guidelines that vary by 
type of activity. We believe the rule provides a reasonable balance 
between the need for accurate information and the burden of reporting 
and verifying hours of participation. In particular, we have allowed 
States to project up to six months of actual employment, reducing the 
documentation burden for an activity that has accounted for over half 
of all countable hours of participation under TANF. For unpaid 
activities, we allow States to document reported information through 
attendance and time sheets of providers and other methods beyond client 
self-reporting, requirements that have been a part of the program all 
along. It is important to recognize that States have always had to 
document work participation hours and most have used sources such as 
these, so we think these new regulations do not pose a special or new 
burden on States, employers, or clients.
    Fourth, the new regulations broaden the pool of individuals subject 
to the State work participation requirements by determining the 
circumstances under which a parent who resides with a child receiving 
assistance should be included in the work participation rates. This 
means that States must include certain child-only cases, primarily 
individuals in about a dozen States that remove the parents' ``needs'' 
from the grant due to a sanction or time limit. The rules include a 
case-by-case State option to include a parent who receives Supplemental 
Security Income (SSI) and works or participates in the Ticket to Work 
program. The vast majority of child-only cases remain exempt from work 
participation requirements, including those headed by

      Grandparents and other non-parental caretakers;
      Undocumented immigrants and immigrants under the five-
year ban;
      Parents receiving SSI who are not included under the 
State option.

    Under our interim final rule, we excluded from the definition of 
``work-eligible individual'' a parent providing care for a disabled 
family member living in the home who does not attend school on a full-
time basis, as long as the need for such care is supported by medical 
documentation. This means that families that include such individuals 
are not part of the participation rate. Again, this is an area where we 
expanded State flexibility.
    Finally, the new regulations require States to establish and 
maintain work participation verification procedures and internal 
controls to ensure compliance with the procedures. They also require 
States to have in place by September 30 of this year a Work 
Verification Plan to validate work data and implement new penalties for 
non-compliance with work verification procedures starting October 1, 
2007. The penalty consists of a one percent reduction in the State 
grant for each year a State is out of compliance, up to a maximum 
penalty of five percent. The full five percent penalty will be imposed 
if a State fails to submit a Work Verification Plan.

Eliminate the Two-Parent Rate
    I would like to remind the Subcommittee of another critical point. 
The Administration has proposed ending the separate participation rate 
for two-parent families; the same participation rate would apply to 
both single-and two-parent families. This would remove a disincentive 
to equitable treatment of two-parent families. Under current law, two-
parent families have a far more rigorous work participation rate 
requirement than do single-parent families (90 percent compared to 50 
percent). Less than five percent of TANF and SSP families are two-
parent families. However, if a State meets its overall work 
participation rate but fails the two-parent rate the law requires that 
a State must meet an 80-percent maintenance of effort requirement, 
causing a State to spend significantly more. We believe that attaining 
a 90-percent participation rate for two-parent families poses 
substantial challenges for States and presents potentially significant 
administrative hardships. Even if this rate were eliminated, the family 
would still have an adult required to participate constructively and at 
levels that would lead to self-sufficiency.

Meeting the Challenge
    We understand and acknowledge that helping States increase the 
number of welfare recipients participating in work activities will be a 
challenge. Some question whether it can be done. We believe that this 
challenge is not only feasible, but must be met if we are to continue 
our progress in reforming welfare and moving families to self-
sufficiency. A fair and objective evaluation of this challenge is 
necessary. Such an evaluation should consider a range of relevant 
factors including the following:

      What States achieved in 2005 does not determine what they 
can achieve in the future. When States have a zero or near-zero work 
participation requirement, they operate programs within that context. 
If they have a higher work participation requirement, they will operate 
their programs accordingly.
      Existing participation data understate the actual level 
of participation. Some States do not report all participation that 
could count because they have already satisfied the participation 
requirements due to the caseload reduction credit. Data from the 
National Directory of New Hires (NDNH) indicate that more TANF adults 
are employed than is reported.
      It is possible for States to achieve rapid increases in 
their work participation rates. In two years, Georgia raised its work 
participation rate from 10 percent to 57 percent. This came about once 
the State made a concerted effort to increase participation rates.
      States have the resources to do the job. The dramatic 
decline in welfare caseloads since the 1996 welfare reform has produced 
savings that far exceed any additional costs from new work 
requirements. For example, TANF funding, measured on a per TANF family 
basis, was $9,100 in 1996 (inflation-adjusted) compared to $15,977 in 
2007 (projected), an increase of $6,877 per family, representing a 76 
percent increase in capacity to meet the challenge of welfare reform.
      If caseloads continue to decline, even the new 
``recalibrated'' credit can substantially reduce the required 
participation rate target. Based on a preliminary estimate of the 
caseload reduction credit for FY 2007, the average target for FY 2007 
will be reduced to 45 percent, and in 12 States the new target will be 
under 40 percent.
      Meeting work participation requirements will increase 
employment and further reduce caseloads, freeing up more TANF funds 
that could be used for work activities and child care.
      Finally, since 1996, Federal and State spending for child 
care in just these programs--TANF, CCDF, and SSBG--has increased more 
than 3 fold from $3.6 billion in 1996 to $11.7 billion in 2006.

    In summary, we sincerely believe that virtually all States have the 
flexibility they will need to meet the new work participation 
requirements. We hope that they do this by helping needy families find 
appropriate work activities and increasing support services to them.

Conclusion
    Mr. Chairman, I'm sure you will agree with me that it is our shared 
desire to improve the lives of the families who have or would otherwise 
become dependent on welfare. In his second inaugural address, President 
Bush stated that in America's ideal of freedom, citizens find the 
dignity and security of economic independence. He expressed the vision 
of an ownership society, making every citizen an agent of his or her 
own destiny. These ideals certainly fit within the reauthorized welfare 
program. Secretary Leavitt, Assistant Secretary Horn, and I stand ready 
to work with you and our State and community partners to make economic 
independence within reach of America's neediest families. I would be 
happy to answer any questions you have.

                                 

    Chairman MCDERMOTT. You can now take a breath.
    Ms. SQUIER. Thank you.
    [Laughter.]
    Ms. SQUIER. It was close, those 5 minutes.
    [Laughter.]
    Chairman MCDERMOTT. I said to Mr. Weller how I was sure you 
were going to make it to the end.
    Ms. SQUIER. I was going to make it.
    Chairman MCDERMOTT. We thank you for that testimony, and I 
realize that you feel under some pressure, not having written 
this law, and you being up here to defend it, or to answer 
questions about it, but current law now counts a welfare 
recipient participating 25 hours a week in constructive 
activities as someone doing nothing. They have to make the mark 
of 30 hours, or they get nothing.
    I wonder if the Administration would be open to supporting 
a partial credit for partial hours under the TANF work 
requirement.
    Ms. SQUIER. You will probably remember, the Senate had such 
a proposal that didn't make it through, for various and sundry 
reasons.
    However, the Administration does not support partial 
credit, because we believe that people need to meet a specific 
work participation standard of either 20 hours--which about 50 
percent of the population only has to meet 20 hours--or 30 
hours, if you have a child over 6. We believe that it's 
important. It's important for the child. It's important to 
establish work procedures, that you get up every day and you 
work a certain amount of hours, that show children that work is 
part of everyday life. So, the Administration did not support 
partial credit.
    Chairman MCDERMOTT. So, there is no flexibility on that 
issue, in your mind?
    Ms. SQUIER. Well, there is always flexibility. There is 
nothing that I can say today that I would say for a surety that 
will or will not be in the final rule because it is still under 
consideration. So, you just have to keep in mind that I am not 
at liberty to tell you what will be included in that final 
rule.
    Chairman MCDERMOTT. I understand that. The final rules, you 
think, will come out when?
    Ms. SQUIER. My best estimate is that they will come out in 
September. That is an estimate.
    Chairman MCDERMOTT. To be implemented 6 months later, the--
March/April of next year?
    Ms. SQUIER. Well, in fact, the work participation part of 
it is already being implemented. The work verification plan, 
and how they set up their systems, is due to be implemented 
October 1, 2007.
    I would say today, though, that I came from a State, I 
worked in four of them, I bet money I end up going back to a 
State. If I were in a State, I would be concerned about the 
challenge of perhaps only getting this final rule, and then 
only having months or weeks to set up my systems.
    So, we are very sympathetic to the challenge that the 
States have, and we are going to do everything we can to work 
with the States as partners, and keep them out of any kind of 
penalty. This is not a ``Gotcha'' situation. We really want to 
work with them as partners, to try to get them to meet the 
goals that they have to meet under the work participation 
requirements
    Chairman MCDERMOTT. That is one of my concerns about this, 
is that the rule-making--having been in the State legislature 
for a long time, and having been on the receiving end of this 
pipe, when legislatures only meet once every--they meet for 3 
months and then they're gone, and then they come back the next 
year and meet, sometimes they can't make the changes as quickly 
as necessary to meet the Federal rules.
    So, I would hope that you would build in some flexibility 
in the rule that would allow States to at least let the next 
legislative session pass, or something, so that they could make 
whatever changes are necessary.
    Ms. SQUIER. Well, Mr. Chairman, my boss, Wade Horn, went to 
five different areas of the country, and did tours about 
implementing the interim final rule. He said in every single 
one of them, that if a State can show that they cannot meet the 
work participation rates, or get up and running because their 
legislature couldn't take action in time, that he would take 
that under consideration as good cause. He asked for States to 
put that in their work verification plans, or to contact him 
directly.
    To date, to my knowledge, no State has come back and said 
that they cannot meet this because of that reason.
    Chairman MCDERMOTT. Well, the other question I have is 
would you support creating a TANF work participation category 
that specifically addresses the whole question of removing 
barriers to employment?
    One of the things that I have trouble with the law is the 
fact that the training, or programs like drug abuse treatment, 
are put in a category where they have a very short period of 
time, and then they are done. Whether the program and treatment 
is done is irrelevant. They are done, as far as being counted, 
or being given any kind of an exemption.
    I wonder if you are willing to talk about that a little 
bit.
    Ms. SQUIER. Sure. We were required by the DRA to define the 
12 activities. The statute didn't include substance abuse, 
mental health, or rehabilitation treatment as any one of the 12 
activities to count. So, we used what we thought was a very 
common-sense definition, and put it under job readiness, which 
we believe is really the only place that it actually fits, 
because you are getting ready for a job.
    It is very interesting to note that only 14 States ever 
counted those activities--substance abuse, mental health, or 
rehabilitation services--toward the work participation rate at 
all in the past. Five of them counted it under job readiness. 
So, we only have nine States that counted any of these 
activities someplace else at all.
    So, we actually think that we are expanding. Now, 36 States 
will be able to count these people in some sort of work 
participation for 6, and possibly up to 12, weeks. I would 
finish by saying that I completely agree with you, that if a 
participant in substance abuse treatment or mental health 
treatment needs more work, then the States should allow them to 
stay in the treatment program; I think that's the very reason 
that Congress allowed us the 50 percent work participation.
    Chairman MCDERMOTT. I think we will have some more 
discussion on this issue. Mr. Weller?
    Mr. WELLER. Thank you, Mr. Chairman. Ms. Squier, thank you 
for joining us this morning, and participating as our first 
witness.
    Ms. SQUIER. Thank you.
    Mr. WELLER. The changing nature of households in America 
has an impact on poverty. We have seen the statistics, that if 
a child is born outside of marriage, they are more likely to be 
in poverty, less likely to complete a full education, and their 
future prospects are less than those that are born into a 
family of traditional marriage, a mom and dad.
    Right now, today, about 37 percent of all births in the 
United States today are outside of marriage, so that represents 
about 1.5 million children out of 4 million that are born each 
year. Again, statistics show that they are at a higher level of 
risk, particularly of living in poverty, than those who are 
born into married households. In fact, experts suggest as much 
as 80 percent of long-term child poverty is associated with 
family breakdown.
    In the DRA, we in the congress last year reprogrammed some 
Federal welfare funds to be used to promote marriage and 
fatherhood, about $750 million. Can you give us a report on the 
status of how this process is going, and when we are likely to 
begin seeing the results, positive or negative, from this 
initiative?
    Ms. SQUIER. Absolutely. We were very fortunate last year to 
award 225 grants in marriage and fatherhood in 47 States and 2 
territories. These grantees are now getting up and running, and 
we are providing technical assistance to them.
    We have to give them a little time to implement and see 
results. So, I suspect we are going to have to wait a year or 
so to actually see results, but the whole objective behind 
this, as you alluded to, is that the research indicates that 
children of families with happy, healthy, married parents, or 
who have a strong connection to the father, come out ahead on a 
whole slew of socio-economic indicators. Our goal is to 
increase the well-being of children through the marriage and 
fatherhood programs.
    Mr. WELLER. Since States were given the opportunity to 
develop programs with their own initiative as part of this, do 
you have any success stories where you see as examples, where 
they have been able to increase the likelihood----
    Ms. SQUIER. Well, I think it is a bit early for that.
    Mr. WELLER. Okay.
    Ms. SQUIER. They really didn't get their money until 
October. So they have to gear up. That's one of the biggest 
problems, I think, when you have grants of this level, where 
people--like I do--really want to see results, and really want 
to come here and tell you that I can show you 10, 20, 50 places 
where we're seeing results. It is just a bit premature.
    Mr. WELLER. My other question is, before the effective date 
of the TANF changes that were in the DRA, we saw a drop in 
welfare dependence, a significant drop. In fact, in 2006, we 
saw the biggest drop in 6 years, which was a 6 percent drop in 
welfare dependence. Can you explain why--of course, this is all 
a result of reforms prior to the DRA.
    Ms. SQUIER. I think there were several years where people 
who ran TANF programs in States were seeing the proposed 
changes, and what was going to be in, and what was going to be 
out, and where the Senate and the House agreed on things, and 
where they didn't.
    I believe that, in preparation for the legislation, where 
States saw things were going to be tightened up, or they saw 
things were going to be different than they are with their 
current programs, that they took that into consideration, and 
they geared up their programs. So, we started seeing results 
before the legislation was actually passed.
    Mr. WELLER. In terms of poverty, what percent of families 
on welfare live in poverty?
    Ms. SQUIER. Well, I would say all families that are on 
welfare live in poverty.
    Mr. WELLER. Then, does the same go for families who leave 
welfare most often for work? Do any of them escape poverty?
    Ms. SQUIER. Yes, they do. Most welfare or TANF recipients 
who go to work, go to work for more than minimum wage, but if 
you had a family with a parent who went to work for $5.15 an 
hour, minimum wage, worked full time, received food stamps and 
the earned income tax credit, they would be lifted out of 
poverty. That doesn't count any other programs that they might 
be receiving.
    Mr. WELLER. In some of the programs they receive, do they 
count, as part of their income, when we determine whether or 
not they live in poverty?
    Ms. SQUIER. No, sir. They do not.
    Mr. WELLER. Which are the ones--which are the programs 
where they receive benefits that are not considered as part of 
their income when we----
    Ms. SQUIER. Well, there are several programs that are not 
considered. For example, food stamps, and housing assistance. 
Let me put it this way, what gets counted is cash. If you are 
not getting cash, if you received child care or transportation 
assistance, or training and employment services, if it isn't 
cash, it's generally not counted in poverty.
    So, what you have are people who are getting a lot of 
services that they are not counting in poverty. If you counted 
the services, the cash value of the services that people got, 
you would see a much different poverty level in America.
    Mr. WELLER. Thank you. Thank you, Mr. Chairman. I see my 
time is up. Thank you, Ms. Squier.
    Chairman MCDERMOTT. Mr. Lewis?
    Mr. LEWIS OF GEORGIA. Thank you very much, Mr. Chairman. 
Thank you so much for holding this hearing. Madame Director, 
thank you for being here this morning.
    As you saw in one of the Chairman's charts, the percentage 
of poor children receiving assistance from TANF has dropped 
from 62 percent in 1995 to 29 percent in 2005. Do you think 
this trend is positive or negative?
    Ms. SQUIER. Well, I never think that when you have an 
increase in any kind of poverty rate, that would be a positive. 
I do think that one interesting thing is, Mr. Lewis, is that 
about the time that the child poverty rate started to inch up a 
little bit more, was about the same time that work 
participation rates became basically meaningless in the States, 
because they had such a precipitous caseload decline, most 
States only had a zero work participation rate, and the 
national average was only 6 percent.
    So, I do think it's kind of an interesting correlation that 
when States stopped having to meet a participation rate, child 
poverty then began to inch up again.
    Mr. LEWIS OF GEORGIA. Well, I guess that's the question 
that I was trying to ask. In other words, you believe reduction 
in the TANF caseload is beneficial, even if such a decline 
occurs while poverty is still rising?
    Ms. SQUIER. I think----
    Mr. LEWIS OF GEORGIA. We have this unbelievable gap, and 
it's not narrowing, but it's--poverty is increasing, all across 
America.
    Ms. SQUIER. Well, I----
    Mr. LEWIS OF GEORGIA. In our large urban centers, in our 
rural areas.
    Ms. SQUIER. I understand. I do think that, from the 
inception of welfare reform in 1996 to present, that child 
poverty has decreased. It fell from 20 percent to 17.6 percent, 
and that reflects 1.4 million fewer children in poverty today 
than when welfare reform began.
    Mr. LEWIS OF GEORGIA. I think there is data, I think there 
is all type of data. Many studies tend to indicate that during 
the past 5 years we have seen a dramatic increase in poverty in 
America. I don't think that can be denied.
    Ms. SQUIER. I don't know about a dramatic increase. There 
have been some incremental increases in poverty in America in 
the last 5 years. However, I don't think you can hold the TANF 
program solely responsible for reducing poverty, because it's a 
very small part of all the means tested programs that this 
country offers.
    If you look at the issue in terms of TANF, any increase may 
be in part because States no longer had to engage people--to 
put them into work activities, not just to get them off the 
TANF rolls, but to get them into work activities, which is 
clearly the goal of the TANF program.
    Mr. LEWIS OF GEORGIA. Madame Director, let's take a close 
look at the State of Georgia. In the last 4 years in Georgia, 
unemployment is rising. Three times as many people receiving 
food stamps, and the number of people on Medicaid are rising, 
are increasing. Where are these people going when they leave 
TANF?
    These numbers tend to say something very different. They 
are unemployed, they are still living in poverty, in need, food 
stamps, Medicaid. Can you really--do you have any idea about 
what is happening to these people? Where are they going?
    Ms. SQUIER. Well, I think that many of them are going into 
work, and they are working some hours. They are not necessarily 
making enough to move them out of poverty immediately. I think 
this is an area where States have to work very hard. A lot of 
States work at meeting the participation rate, which means that 
they bring people off the rolls and into the work force, but 
then they cannot stop there.
    I would submit to you today that this Administration agrees 
that you need to help support those families to move them up 
the ladder--which takes a little bit more time--but it can be 
done. States need to spend a little bit more time, and a little 
bit more TANF money, doing just that.
    Mr. LEWIS OF GEORGIA. I know with a program, it's the idea 
that you got to reduce the caseload. Do we reduce the caseload 
and bringing down numbers and people are--try to meet a magic 
goal, or--what's happening?
    Ms. SQUIER. I don't think that just bringing down the 
numbers is the outcome that we're looking for. We have always 
been looking for an outcome of self-sufficiency. Self-
sufficiency is better for the child--that's better for the 
family, and that's better for the child.
    So, I don't think that we are just trying to say, 
``Whatever you need to do to bring down, or to put 50 percent 
of your people in work activities, you need to make that 
happen.'' I think what we want is for all families to be 
engaged.
    Georgia is such a great example. I know you're from there, 
and I'm glad you brought that up. Georgia is one of my favorite 
places to talk about.
    Mr. LEWIS OF GEORGIA. So, you are prepared to use the State 
of Georgia as a model for the rest of the Nation?
    Ms. SQUIER. I am prepared to tell you that a couple of 
years ago the State of Georgia had a work participation rate of 
about 6 percent. Now, just 2 years later, they have, without 
any resources from the Federal Government, raised that work 
participation rate to 57 percent.
    I think a person from Georgia is here, and he or she is 
going to tell you that I am completely wrong on that, that it's 
far more than 57 percent that they have raised their work 
participation rate.
    So, somehow, they are engaging these clients, they are 
getting to people who were formerly harder to serve, or that 
they felt had more barriers to overcome, and they are working 
with these people, and getting them into work, which is far 
better than not having them work at all. It is the first step 
into moving them into better jobs.
    Mr. LEWIS OF GEORGIA. Madame Director, my time is expired, 
but I think we are going to hear a little more from the State 
of Georgia. I think there are a few people around the country 
that have some questions about whether the State of Georgia 
should--I am from that State.
    Ms. SQUIER. Yes, sir.
    Mr. LEWIS OF GEORGIA, but I tell you, I think people will 
have some question, some reservation, whether the State of 
Georgia should be used as a model for the rest of America.
    Chairman MCDERMOTT. We will get to that next. Mr. Herger?
    Mr. HERGER. Thank you, Mr. Chairman. Ms. Squier, I want to 
commend you on the great job you are doing. We certainly miss 
Dr. Horn.
    Ms. SQUIER. Right.
    Mr. HERGER, but you are doing a very outstanding job, 
testifying.
    Ms. SQUIER. Thank you.
    Mr. HERGER. I think it should be pointed out that even 
though the poverty rate is raising, I think it historically has 
always raised after a recession. We have come out, but I think 
if we look at the numbers, those numbers are still lower than 
they were when welfare reform came out in 1996.
    Ms. SQUIER. Yes.
    Mr. HERGER. Just another comment. I want to commend you and 
Dr. Horn, the Administration, for the emphasis of getting--
working to get fathers involved with their families, and with 
their children. Those of us who are parents know it's tough 
enough to raise children with two parents, a mom and a dad, let 
alone just where there is only a mom out there, working.
    Ms. SQUIER. Sure.
    Mr. HERGER. So, I commend you for that, and I think that's 
very important.
    Also, the point that you made, I think, is one that is so 
very important. I want to commend you and the Administration 
and--I want to urge you to continue to hold tight on the 
importance of ensuring that these individuals are working.
    We have given the caseload credit and we have gone down to 
the point where there is virtually no one working any more. 
With the reauthorization, we are back to this, but that is the 
key, as you pointed out, that if they are working, even at 
minimum wage, and with everything else they have, they can move 
out of poverty.
    Ms. SQUIER. That's correct.
    Mr. HERGER. If they are not working, no matter how well 
meaning it may be to have them in education, which is crucially 
important, and I don't want for a moment to minimize how 
important education is in anything else we do. As far as 
getting them out of poverty, nothing takes the place of 
ensuring that we don't allow these individuals to slip between 
the cracks, and not be out there doing what we can to help get 
them into jobs, even if they're entry-level jobs to begin with.
    Ms. Squier, could you tell us how much States collectively 
have in unspent Federal TANF and child care funds saved from 
prior years?
    Ms. SQUIER. Yes, I think I can. I think States have $2.1 
billion in TANF unobligated funds that they could spend right 
now on child care, and even more importantly, they have $7.7 
billion in TANF and childcare unliquidated funds that could, so 
a State choose, be used for child care.
    Mr. HERGER. So, could some or all of those funds be spent--
I believe you have answered that--for child care or other work 
support?
    Ms. SQUIER. I believe they can.
    Mr. HERGER. So, in other words, we are talking about 
dollars that are out there right now that haven't been used, 
that are available.
    Is it reasonable to expect States to reduce their own TANF 
and child care savings before they ask for additional TANF and 
child care funds beyond the increase it provided in the TANF 
Reduction Act?
    Ms. SQUIER. Yes, sir.
    Mr. HERGER. So, would you like to say--make any other 
comments?
    Ms. SQUIER. Well, actually, you are doing so well for me 
that I would like to just have you talk for the rest of the 
hearing, if you don't mind.
    [Laughter.]
    Ms. SQUIER. Those are big numbers, and I think important 
funds that States could be using, but if you take just three 
programs, TANF, the social services block grant, and the child 
care development fund, just those three programs alone for 
child care, child care has increased from 1996 to 2006, child 
care spending, 225 percent, from something like $3.6 billion to 
$11.7 billion.
    So, that doesn't even count other programs that are out 
there, like pre-K programs, or Head Start programs that most 
States have. If I looked through my notes, I could find you 
some other child care programs that are out there, which aren't 
included in the $11.7 billion total.
    I think we are also discounting the number of people who 
may be eligible for government child care that don't want or 
necessarily need it. This is a portion of the population who 
prefers to not use regulated day care, and prefers to use 
friends and family, which works better with their schedule, 
work schedule, and they feel comfortable putting their child 
there.
    I do not have a way to give you an exact figure of how many 
people that is, but in low-income families, that's a very 
traditional way of getting child care. We believe this 
encompasses a substantial number.
    Mr. HERGER. Thank you, Mr. Chairman. Thank you.
    Chairman MCDERMOTT. Thank you, Mr. Herger. Mr. Stark?
    Mr. STARK. Ms. Squier, thank you. What I thought I just 
heard you say is that for people who can afford day care at 
$200 a week, that's good, and for people who can't, they should 
ship it off to Granny or cousin, or aunt and uncle, is that----
    Ms. SQUIER. No, I don't think that's what I said.
    Mr. STARK. I think that's what you just said, but you maybe 
said it differently.
    Let me ask you this. Is there a difference between the 
welfare recipient who leaves TANF and gets 1.5 times, say, the 
minimum wage--maybe he makes $30,000 a years before 
deductions--and a recipient who is sanctioned off welfare, and 
leaves with no source of income?
    Ms. SQUIER. Well, clearly, there would be a difference 
between someone who has no income and someone who has $30,000 a 
year in income.
    Mr. STARK. So, why do we treat these recipients 
differently, or the same? Why don't we treat them--when you 
calculate the case reduction credit? Shouldn't we give more 
credit when they assist someone to become self-sufficient than 
we kick them off and they become homeless or dependent?
    Ms. SQUIER. Well, I think that tonce they are sanctioned 
off, that we should still--and I think our regulations do ask 
for this--keep them in the work participation rate, so we still 
work with those families, so they're not just languishing.
    Mr. STARK. How would you work with them? Faith-based 
initiatives? Would that be a good way to work with them?
    Ms. SQUIER. That is one way.
    Mr. STARK. How much money do you guys spend on faith-based 
stuff for children?
    Ms. SQUIER. Well, the States would run the programs, so I 
don't know that. It wouldn't be the Federal Government.
    Mr. STARK. You don't have any Federal faith-based 
initiatives under TANF, or for children's programs, or for 
family support?
    Ms. SQUIER. The TANF program is a block grant, so we give 
the money to the States.
    Mr. STARK. I understand that, but what about for day care 
or family preservation? You don't have any faith-based programs 
under your jurisdiction?
    Ms. SQUIER. Well, the child care program is a block grant 
also, so it goes to the States. So, I would have to check to be 
sure, but I do not think that is the focus of our program here, 
in the Federal Government.
    Mr. STARK. Now, you talk about increasing funding for child 
care. There is some new money, but based on the estimates of 
what is needed, the new money is going to amount to $70 a month 
for the new participants. The President's budget requests a 
freeze in discretionary child care funding, which by his own 
estimate, leads to 300,000 fewer families receiving the 
assistance.
    Is there anywhere that you know of that you can get safe 
child care for $70 a month?
    Ms. SQUIER. There may be. I don't work in the States, so I 
do not know.
    Mr. STARK. Come on, let's stop a minute.
    Ms. SQUIER. I do not know the answer to that, Mr. Stark.
    Mr. STARK. You don't?
    Ms. SQUIER. I do not know.
    Mr. STARK. Well, I would commend you to look at it, and 
decide what you think is a minimum amount that you--under which 
you could provide child care in this country. I think you're 
going to find it's far north of $70 a month.
    It seems to me that it is--you are right up there with 
Jonathan Swift. At $70 a month you might as well go to his 
suggestion. If you haven't read it, I would commend that to 
you, because it outlines the Republican theory. It's called ``A 
Modest Proposal.'' Go back to your high school English and look 
at it.
    What programs do you think the States should cut to provide 
child care funding?
    Ms. SQUIER. I don't think States need to cut any programs. 
I think there is enough money out there in child care, and in 
their unobligated and unliquidated funds to provide child care. 
Money should not really be an issue here.
    Mr. STARK. So, they should take it out of nursing homes and 
other areas, and put it into child care?
    Ms. SQUIER. I don't even think that is necessary. I think 
when you have the TANF block grant that has not been cut at all 
over the years, and you have a 60-percent decline in caseload, 
then----
    Mr. STARK. Yes, but----
    Ms. SQUIER [continuing]. There is money to spend there.
    Mr. STARK [continuing]. Any idiot can get 60 percent. You 
just kick people out.
    Ms. SQUIER. I don't think that's what happens----
    Mr. STARK. Without reason, without care. That's what this 
Administration has done.
    Ms. SQUIER. Well, I don't agree with that----
    Mr. STARK. It just blindly has kicked people out, thinking 
that they can go to church, or someplace else, and get fed and 
clothed, and get protection. I submit to you that it's a kind 
of heartless approach, but if that's your approach----
    Ms. SQUIER. No, that----
    Mr. STARK [continuing]. You will have to wait until after 
2008 to change it, won't we?
    Ms. SQUIER. That's definitely not my approach. I hope after 
2008 it doesn't change.
    Chairman MCDERMOTT. Thank you, Mr. Stark. Mr. Camp, please?
    Mr. CAMP. Thank you, Mr. Chairman. Again, Ms. Squier, how 
much are the unspent Federal TANF funds held by the States now, 
collectively?
    Ms. SQUIER. Unspent, I think, is--well, I think that goes 
back to my $2.1 billion in unobligated, and $7.7 billion in 
TANF and childcare unliquidated.
    Mr. CAMP. Some or all of these funds could be used for 
child care or other work support programs, if the States chose?
    Ms. SQUIER. Yes, sir. Yes, sir.
    Mr. CAMP. So, would it be reasonable to expect the States 
to reduce their TANF surpluses before seeking additional funds?
    Ms. SQUIER. Yes, sir. They should.
    Mr. CAMP. In 1996, many so-called experts predicted 
inadequate child care funds. In fact, some on the other side 
said that there were projections that would show work in child 
care funding $13 billion short of what was needed, but in 
reality, the States in 2002, at the end, had $6 billion in 
unspent welfare funds. So, that was about a $20 billion mistake 
there.
    I guess since the 1996 reforms, in terms of States using 
TANF funds for child care, what did we see? When they needed to 
help recipients go to work, or obviously, to get child care to 
go to work, what did we see the States doing after 1996, with 
those funds?
    Ms. SQUIER. As you know, States can transfer 30 percent of 
their TANF funds to the child care development fund, or they 
can spend TANF directly from their block grant directly on 
child care.
    I think all States, almost all States--I would have to 
check, did transfer some, or spent directly. I think that 
stayed fairly consistent.
    Mr. CAMP. I think in response to Mr. Weller's questioning, 
you mentioned that when you are dependent on TANF funds, you 
tend to be in poverty, but it's through work and leaving those 
programs that families find themselves getting out of poverty.
    Is it true that we saw the States' dedication to TANF funds 
for child care actually slow down when they were having less 
pressure to get more welfare recipients into work, when we saw 
a meaningless work requirement? Did we find that the States 
used fewer resources to help people with child care and other 
support programs to get to work?
    Ms. SQUIER. Well, I think they didn't have to. That's the 
whole point of making a more meaningful caseload reduction 
credit, and a more meaningful work participation rate. That 
they didn't have to spend any more money to help people in 
training, education, child care, or any other place, because 
they had already met their work participation rate, and they 
were lifted outside of any Federal penalty. So there was not an 
incentive or motivation for them to continue to work with 
families. Now, you can't say that all States did that.
    Mr. CAMP. Right.
    Ms. SQUIER. You can't say that all States did that.
    Mr. CAMP. Right, we are just talking generally. Not only 
was there not an incentive for them to use TANF funds, but we 
actually saw the States' dedication to use TANF funds for child 
care slow down when they were under--no longer under pressure 
to get more welfare recipients into the workplace before the 
DRA.
    Not only was there not an incentive, but didn't we see the 
accumulation of these surpluses?
    Ms. SQUIER. Yes. I would say they weren't spending them, 
and that's why we have these surpluses.
    Mr. CAMP. All right. Thank you very much.
    Ms. SQUIER. Sure.
    Mr. CAMP. Thank you, Mr. Chairman.
    Chairman MCDERMOTT. Mr. Davis?
    Mr. DAVIS. Thank you, Mr. Chairman. Ms. Squier, let me go 
back to the colloquy that you had with my friend from Georgia, 
John Lewis. He was asking you about the number of children in 
poverty, and I think you compared the rate today with the rate 
in 1996. We have so many people here, I want to make sure the 
facts are accurate.
    It is my understanding--and I am sure you will correct me 
if I am wrong--that the rate of poverty among children has gone 
up the last 5 years. Is that right?
    Ms. SQUIER. Yes, it has increased.
    Mr. DAVIS. What is of concern to me about that, Ms. Squier, 
is it has happened in the context of two things. We have had 
growth in GDP for five years in a row, is that correct?
    Ms. SQUIER. Yes, we have had a great economy.
    Mr. DAVIS. We have had, relatively--if this is on 
relatively--robust job creation for the last 3 years, is that 
correct?
    Ms. SQUIER. That is correct.
    Mr. DAVIS. So, something isn't working. I think that's the 
point that Mr. Lewis was driving at. If we have an economy 
that, by your Administration's count, is getting stronger and 
better and more robust, it ought to be reducing the ranks of 
poverty. We shouldn't see the ranks of poverty going up. That's 
what concerns some of us on at least one side of the dais. It 
suggests to me that something is not working.
    So, speaking from your perspective, Ms. Squier, someone who 
is involved in administering the TANF program, doesn't it tell 
you that something isn't working about how these policies are 
delivered, if we are getting richer as a country, and more kids 
are getting poorer?
    Ms. SQUIER. Yes, it does tell me something. It tells me 
that States aren't engaging people in work activities because 
they don't have to, because they don't have a meaningful work 
participation rate to meet. So, if you have to meet a zero work 
participation rate, pretty much, that's what you're going to 
meet. Seventeen States only had to meet 0, and again, the----
    Mr. DAVIS. Ms. Squier, what does that have to do with the 
number of children in poverty?
    Ms. SQUIER. Well, if parents work, you have less children 
in poverty.
    Mr. DAVIS. Well, all right. Let me take that premise. First 
of all, it's not necessarily the case, if they are low-wage 
jobs. Let me follow up on that.
    Take the number that you gave Mr. Lewis, going from a 6 
percent job participation rate to a 57-percent rate. How many 
of those jobs are--well, give me a sense of the wage 
classification of those jobs. How many of those jobs are low-
wage jobs?
    Ms. SQUIER. Well, I can't speak necessarily to Georgia, but 
I do know that most TANF recipients go into their first job and 
make about $7 or $8 an hour.
    Mr. DAVIS. That would translate to how much a year?
    Ms. SQUIER. You're going to make me do math under this kind 
of pressure?
    [Laughter.]
    Mr. DAVIS. Well, would you agree that it's a fairly low 
amount?
    Ms. SQUIER. What does that come up to, do you know?
    Mr. DAVIS. $14,000?
    Ms. SQUIER. $14,000 to $16,000.
    Mr. DAVIS. Do you consider that to be a middle-income job?
    Ms. SQUIER. I do not. I do think, though, that you have 
to----
    Mr. DAVIS. It's just poor, it's not that poor.
    Ms. SQUIER. You have to consider all the other benefits 
that they get.
    Mr. DAVIS. Well, Ms. Squier, you make my point, though. One 
of the things that you are touting is more people working.
    Ms. SQUIER. Yes, sir.
    Mr. DAVIS. That sounds like a good thing, but, again, 
because we have a lot of people here, and I don't want them to 
be misinformed, if a lot of people are working, but they are 
abysmally low-wage jobs, that probably means they still can't 
purchase things for their families. It means that they are 
still very much behind the eight ball.
    So, Mr. Lewis and I are trying to make the point to you, 
you can't just judge the efficacy of this program by whether or 
not people are working. You have to look at the quality of the 
work, and the most important is quality--is whether it pays you 
enough to feed your family.
    Ms. SQUIER, but they----
    Mr. DAVIS. Now, the second point that I want to make to you 
is I understood TANF, when President Clinton pushed it through 
11 years ago, there was a very simple goal, to encourage better 
conduct on the part of a lot of welfare recipients, to get them 
to move toward more productive activity. Is that one policy 
goal of TANF?
    Ms. SQUIER. Sure.
    Mr. DAVIS. Now, if that's the case, it would seem to me 
that the work requirements make sense for that reason, but it 
would also seem, for example, if someone is attempting to go to 
college, that that is a productive activity. Is it not correct 
that under the regulations that you have adopted, that States 
have less flexibility now to count BA classes toward vocational 
training? They have less flexibility now than they did before, 
is that right?
    Ms. SQUIER. Well, actually, we do say under vocational/
educational training, that there is not a road there to a 
baccalaureate degree.
    Let me just tell you how we got there, if you don't mind.
    Mr. DAVIS. Well, no, but this is what I want you to respond 
to. Why isn't any kind of education good, productive activity, 
that gives these people a chance at a better life?
    Ms. SQUIER. I disagree that we don't allow education and 
training----
    Mr. DAVIS, but you make it harder, and you give States less 
flexibility than they had.
    Ms. SQUIER. I think only for a baccalaureate, and I will 
say----
    Mr. DAVIS. You don't think a baccalaureate degree is a 
productive thing for a person to have?
    Ms. SQUIER. We received many comments, just on this 
subject. While I won't tell you what is in and what is out of 
the final rule, we received----
    Mr. DAVIS. Ms. Squier, respond to my observation.
    Ms. SQUIER [continuing]. Many comments, and this is under 
consideration.
    Mr. DAVIS. Respond to my observation. I am talking about 
the status quo, not what happens after the commentary. Don't 
you agree with me, that getting a college degree is a very 
important thing to help lift someone out of poverty?
    Ms. SQUIER. If they could do it, yes.
    Mr. DAVIS. Well, if they could do it? Isn't the premise 
that anybody should be able to get a college degree, if they 
apply themselves and work hard enough?
    Ms. SQUIER. That may be true.
    Mr. DAVIS. So, why shouldn't the policies encourage people 
to try to do that?
    Ms. SQUIER. We got many comments on that, and we are 
considering it----
    Mr. DAVIS. Why shouldn't the policies encourage people to 
do that, Ms. Squier?
    Ms. SQUIER. They may, in the final.
    Mr. DAVIS. Well, why are you agnostic about it? Why not 
just agree with me on that?
    Ms. SQUIER. We took the definition that the Department of 
Education had for vocational/educational training in order to 
keep it consistent across the Administration. They did not 
include baccalaureate.
    Since we put out the interim final rules, the Department of 
Education has come around and changed their definition, and 
they have taken out any reference to not being able to get a 
baccalaureate. So, that's why I think that--along with the 
comments I received--we may have some consideration for this.
    Chairman MCDERMOTT. We will probably have some more 
discussion on this one, too. Thank you, Mr. Davis. Mr. Porter?
    Mr. PORTER. Thank you, Mr. Chairman, and thank you for 
being here. We appreciate your testimony.
    I would like the record to reflect that President Clinton 
vetoed TANF twice, prior to its passing in 1996. I just want to 
make sure that that's for the record.
    If we're looking at 1995, there were 5 million families 
unemployed in the United States. If you look at 2005, 2006, 
there is about 1.7 million families that are not working. So, 
there has been a substantial improvement. Although not perfect, 
there are a lot of families now that have an opportunity. We 
could talk about the hourly wage--and certainly there are areas 
that needs to be adjusted--but compared to where we were in 
1995, I think we have come a long way.
    Unfortunately, they are not making more. It would be great 
if they could, but at least now they are having an 
opportunity--almost four million more families have 
opportunities they didn't have before, although not perfect.
    That really begs my question. We are spending about $600 
billion a year on welfare in this country. Depending on the 
day--and I hate to use statistics, because we're talking about 
real kids, real families, and real problems, but for the 
moment, we are talking in statistics--15 to 25 million kids at 
one time that are on welfare in the country.
    If my math is right, we are spending about $30,000 per poor 
child a year in our country. Now, this is facetious, but 
someone might suggest we should give each one a check for 
$30,000 and let them put it in the bank and live off of that. 
It would probably be a lot better lifestyle than some kids have 
today.
    The problem is, when we're spending so much per child, the 
money is not getting to the kids in all cases. I know we try to 
give States more flexibility, but what can we do to make sure 
more of that $30,000 we're spending per child under the age of 
3 in this country to receive more benefits? What can we do to 
help streamline the process?
    The moms and dads out here that need help complain about 
access, and what they could do to make it easier? What would 
you suggest?
    Ms. SQUIER. That's actually a tough question for me. As you 
know, the whole design of a block grant program is for States 
to have flexibility to design their own programs, to look at 
their populations, and to say, ``This is where we need to 
expend funds, because this is where we have the greatest 
need.''
    I don't think any of us here really want to take that kind 
of flexibility away from States. So, I think that's a question 
that we really would need to ask to the States, what do they 
think they need to do to work with the population of children 
that are under three; they would be in a better situation than 
I to answer that.
    Mr. PORTER. What do you hear from States when you're out? 
What are some of their number one complaints?
    Ms. SQUIER. Since the interim final rule came out?
    Mr. PORTER. Yes.
    [Laughter.]
    Ms. SQUIER. What was happening before is that many States 
defined work activities very broadly--some bed rest, 
motivational reading, exercise, smoking cessation, journal 
writing--and they got credit toward work, while other States 
defined work in a more traditional sense. They didn't get 
credit for all those things. So, in a sense, you had some 
States that were penalizing themselves.
    What we were directed to do under the DRA, is get rid of 
that, so that States have an equal playingfield. I think some 
States do not particularly like the fact that they can't count 
anything they want as work. We put in there common-sense 
definitions of what we believe counts as work, and some of the 
other things that some States were counting no longer count 
toward work. I think States--that is one of the things that 
they don't like.
    Mr. PORTER. We have had challenges in Nevada, because of 
our massive growth. We are growing, depending on who you ask, 
7,000 to 8,000 people a month. I know that you have made some 
adjustments for fast-growing States. We appreciate that. Is 
there any other areas for fast-growing States that you would 
suggest, to help with our massive growth, and cutting through 
the bureaucracy?
    Ms. SQUIER. You're not supposed to be this hard on me. 
That's not supposed to happen from you.
    [Laughter.]
    Ms. SQUIER. I really would have to put some thought into 
that, and I actually will put some thought into that and share 
a response for the record. I don't exactly know what to tell 
you right here and now of what I think States could do with a 
faster-growing population that would make a difference, other 
than what good welfare work programs are doing now.
    [The information follows:]

    Nevada has received a supplemental grant for population 
increases sin FY 1998. Since 2001, it has received $3.734 
million each year in addition to its TANF grant of $43.977 
million
    Although Nevada's population is growing rapidly, its TANF 
caseload declined 62.1 percent between August 1996 and 
Septemeber 2006. This indicates they should have sufficient 
TANF savings to fund any added costs associated with welfare 
reform. Moreover, the caseload decline from FY 2005 to FY 2006 
has been 11 percent. In addition, the interim TANF rule gives 
States new flexibility to exclude parents caring for a disabled 
family member from the work participation requirements as well 
as gives states credit to count excused absences and holidays. 
In light of this information, we believe that Nevada should be 
able to meet the new program requirements despite the fact that 
it is a growing State.
    In regards to programmatic suggestions or recommendations, 
I would like to refer you to our Peer Technical Assistance 
website. Here you can find samples of Success stories and best 
practice methods used by many States.

    Mr. PORTER. Well, we are blessed in Nevada, that our 
unemployment rate is the lowest it's been in four decades, and 
I think we employed 90,000 people last year, but the problem is 
we still have kids that need help. So, I would appreciate it if 
we could get together to talk about some of those solutions.
    Ms. SQUIER. Great.
    Mr. PORTER. Thank you.
    Ms. SQUIER. We will put some thinking into that, and get 
back to you.
    Chairman MCDERMOTT. I don't know how many times in 30 years 
I have heard a witness say, ``I don't know.''
    Ms. SQUIER. Well, I am unique and unusual.
    Chairman MCDERMOTT. Well, Ms. Berkley from Nevada.
    Ms. BERKLEY. Thank you very much, Mr. Chairman, and welcome 
to the Subcommittee.
    Ms. SQUIER. Thank you.
    Ms. BERKLEY. Appreciate you being here. I represent 
southern Nevada, which is the fastest growing district in the 
United States of America. While it is true that we have an 
extraordinarily robust economy, and we do, and our unemployment 
rates are relatively low, we have a growing problem with 
poverty in our community, and low-income wage earners. 
Consequently, the issues that we are talking about today are 
very important for the people that I represent.
    Ms. SQUIER. Sure.
    Ms. BERKLEY. Now, in the second panel, we have somebody 
from Nevada, who is going to enlighten the Committee Members on 
how serious this issue is, but when you're talking about a 
State that is growing as rapidly as the State of Nevada, 
whatever adjustments you have made are not helping. The reason 
that you can't give an answer to my colleague from Nevada is 
because there isn't one, unless we adequately fund these 
programs.
    Now, if the States use TANF reserve for child care, what do 
they possibly have to fall back on? Let me tell you why I'm 
asking.
    After 9/11, we had massive lay-offs in the State of Nevada, 
obviously in southern Nevada. People come to Las Vegas for a 
good time. After 9/11, nobody was flying, and nobody was coming 
for a good time. There was a national tragedy we were all 
dealing with. We lost 1 year's worth of business in the 
aftermath of 9/11. We had--because of massive lay-offs in the 
gaming industry, our TANF caseload almost doubled. We went 
through the reserve. There was nothing left. We went past the 
skin, past the muscle, into the bone.
    Now, if we're talking about using the TANF reserve money 
for child care, but Nevada needs that money for other parts of 
TANF, what do we do in--when we have a State with an enormous--
a rapidly growing population? Your block grants don't cover our 
needs, and there is no way that we could use those TANF funds 
for child care when we need it for other things as well.
    Let me mention something else. We have one of the one of 
the blessings in southern Nevada is that our management of our 
gaming casinos--which a majority of people work in our gaming 
industry--and our labor unions work very closely together.
    We have the culinary training center that is funded by the 
gaming industry--pretty much funded by the gaming industry. 
When I meet with these welfare-to-work mothers, and I do on a 
period basis, what they tell me--and they are training for 
those $7 and $8-an-hour jobs--is that the two things they need 
more than anything else are child care and transportation.
    It doesn't do us any good to train these women to get off 
welfare and go to work, if they have got children at home that 
need caring for. If their money that they make, the $7 and $8 
an hour, is going to get eaten up by child care costs--and let 
me tell you, if you don't know how much child care costs, let 
me tell you. The idea of $70 a month is a joke. It's twice 
that, minimum, if you're going to get anybody that you can 
trust with your children.
    Second thing they needed was transportation. Doesn't do any 
good if you have a job and you can't get there. So, your cuts, 
even if the President's budget maintained what it did this 
year, maintained funding, we still lose out. Any cut is 
detrimental to pro-growth States. So, what do we do?
    Ms. SQUIER. Well, first of all, I don't believe that you 
are getting a cut in child care.
    Ms. BERKLEY. How much are we getting in increase?
    Ms. SQUIER. The DRA contained an increase of about $1 
billion over 5 years.
    Ms. BERKLEY. Okay. If it costs us twice that much to take 
care of our needy?
    Ms. SQUIER. Well, I can't speak directly to your statistics 
in Nevada.
    Ms. BERKLEY. I can.
    Ms. SQUIER. Of course, and you're very knowledgeable about 
your State, but, overall, with the caseload declines that have 
occured in this country--and I don't have it, State by State--
--
    Ms. BERKLEY, but we are not having a caseload decline in 
Nevada. So, what do we do?
    Ms. SQUIER. Well, I was under the impression that Nevada 
was making a fabulous comeback.
    Ms. BERKLEY. Nevada is making a fabulous comeback, but we 
still aren't where we need to be. So, what do we do?
    Ms. SQUIER. Well----
    Ms. BERKLEY. What if we take the TANF funds and put it into 
child care, and we don't have enough in the reserve, in case 
there is another, God forbid, 9/11 in this country?
    Ms. SQUIER. These are decisions that the people in your 
State have to make. Maybe they are very tough decisions. I can 
appreciate that they could be very tough decisions to make, but 
unless Congress----
    Ms. BERKLEY. Do you not feel that the Federal Government 
has any obligation whatsoever to the people of this country?
    Ms. SQUIER. Of course I do.
    Ms. BERKLEY. To lift people out of poverty, give them these 
opportunities?
    Ms. SQUIER. Of course I do, and I think that's exactly what 
the TANF program is set up to do, exactly those things that 
you're saying.
    Ms. BERKLEY. Not if it is not adequately funded. A program 
doesn't make--we also have Leave No Child Behind, but if you 
cut it by $71 billion, you're leaving a lot of children behind. 
Same thing here.
    Ms. SQUIER. Well, Congress, I think, generously has chosen 
to not cut the TANF block grant, even though there has been, 
nationwide, a huge caseload decline. So, I----
    Ms. BERKLEY. So, in----
    Ms. SQUIER. I just----
    Ms. BERKLEY. I would like you to report back to me, if you 
don't mind. In a State like Nevada, where we have an increasing 
population, an extraordinary--our economy couldn't get any 
better, everybody that is employed and wants to be employed, is 
employed. So, what do you do in a case like the State of 
Nevada?
    [The information follows:]

    Nevada has received a supplemental grant for population 
increases sin FY 1998. Since 2001, it has received $3.734 
million each year in addition to its TANF grant of $43.977 
million
    Although Nevada's population is growing rapidly, its TANF 
caseload declined 62.1 percent between August 1996 and 
Septemeber 2006. This indicates they should have sufficient 
TANF savings to fund any added costs associated with welfare 
reform. Moreover, the caseload decline from FY 2005 to FY 2006 
has been 11 percent. In addition, the interim TANF rule gives 
States new flexibility to exclude parents caring for a disabled 
family member from the work participation requirements as well 
as gives states credit to count excused absences and holidays. 
In light of this information, we believe that Nevada should be 
able to meet the new program requirements despite the fact that 
it is a growing State.
    In regards to programmatic suggestions or recommendations, 
I would like to refer you to our Peer Technical Assistance 
website. Here you can find samples of Success stories and best 
practice methods used by many States.

    Chairman MCDERMOTT. Mr. Weller has asked for the 
opportunity to ask a brief question.
    Mr. WELLER. Thank you, Mr. Chairman. Ms. Berkley raised, I 
thought, an important point. That is that Nevada is a very 
rapidly growing State, compared to States like Illinois, where 
everyone is trying to move somewhere else, it appears, 
including to Nevada.
    [Laughter.]
    Mr. WELLER. Particularly with the kind of weather we have 
been having, with the ice and snow these last few weeks.
    Chairman MCDERMOTT. Enough advertisement, Mr. Weller.
    [Laughter.]
    Mr. WELLER. Ms. Squier, a former Member of this Committee, 
John Ensign, now a Member of the Senate, as I recall created 
something called a TANF supplemental grant to provide 
additional TANF funds to States like Nevada, that are dealing 
with rapid population growth. Are you familiar with that?
    Ms. SQUIER. Yes.
    Mr. WELLER. Could you explain that to the Subcommittee?
    Ms. SQUIER. There is $319 million for States that 
experience rapid growth, and I--that's a very good point. I am 
not sure why that would not be available to the State of 
Nevada.
    Mr. WELLER. So, those funds are being made available, in 
addition to the regular TANF?
    Ms. SQUIER. Yes, they are in addition to the regular TANF.
    Mr. WELLER. Would you provide to the Committee, some 
specifics, how much Nevada receives from this program?
    Ms. SQUIER. How much they would receive? Sure.
    Mr. WELLER. Thank you.
    Chairman MCDERMOTT. You can submit it in written form.
    Ms. SQUIER. Okay. I would be more than happy----
    Ms. BERKLEY. Can I have a point of clarification? Those--
thank you for bringing that up, Mr. Weller, but I think it just 
emphasizes my point, because the grants are based on population 
numbers in the early nineties.
    Mr. WELLER. Right.
    Ms. BERKLEY. Since then, we have gotten an additional 
congressional seat, and that's why Mr. Porter is sitting here. 
That's how fast our growth is, and that's why we need help.
    Chairman MCDERMOTT. Mr. Van Hollen?
    Mr. VAN HOLLEN. Thank you, Mr. Chairman. Thank you for your 
testimony here today.
    Ms. SQUIER. Sure.
    Mr. VAN HOLLEN. I had a question about the work 
requirements, as it relates to individuals with disabilities.
    Ms. SQUIER. Sure.
    Mr. VAN HOLLEN. Whether there be an opportunity to provide 
greater flexibility. One of the questions that obviously faces 
the States is making sure people meet the work requirements. 
Obviously, individuals with disabilities, especially more 
severe disabilities, may have difficulty meeting some of those 
requirements.
    So, my question, first question, relates to individuals who 
fall under the Americans with Disabilities Act (ADA) (P.L.101-
336), and whether or not there is any provision made for 
providing flexibility for how they are expected to meet the 
requirements.
    Ms. SQUIER. The regulations meet the ADA, and States must 
also meet the ADA. There is no wiggle room there. It is a law, 
and they have to meet it.
    While there is no provision for a different level of work--
30 hours, 20 hours, what we are saying to States is that, ``Now 
you have to pay attention to this population.'' What was 
happening before, in my opinion, is States were taking people 
that were disabled, and they were putting them into separate 
State programs where they weren't part of the work 
participation rate.
    Some States did that. Or, they had a very, very low 
participation rate and there was no incentive to work with 
people with disabilities.
    So, if anybody was remotely hard to serve, as you might 
call someone with a disability, they were languishing in 
welfare without benefits and services. What we really believe 
that this regulation does--and the law allows for--is to engage 
States to work with people with disabilities, so that they get 
the same benefits and services as anybody would that is not 
disabled.
    Mr. VAN HOLLEN. No, I--look, I believe we obviously need to 
provide as many opportunities for individuals with disabilities 
as possible. I guess the question is, in those cases where 
States feel that the have provided every opportunity possible, 
and are unable to meet those requirements--let me ask you, for 
example, individuals who apply for Social Security Insurance 
(SSI) benefits.
    Ms. SQUIER. Sure.
    Mr. VAN HOLLEN. Those, as you know, that receive those 
disability benefits under SSI are people who are determined to 
be fairly disabled. That's why they are receiving that 
particular benefit. My understanding--I don't know the exact 
figure--of how many people who apply ultimately receive them, 
but I think it is at least 35 percent, maybe more.
    I guess the question is, if you have got somebody going 
through that process--and this is a question that has been 
raised by some of the States--if you've got somebody going 
through that process, prior to them being determined eligible--
because I know, and I think a lot of us know, this process can 
drag out sometimes as long as 2 years.
    Ms. SQUIER. Sure, it can.
    Mr. VAN HOLLEN. Why not consider some flexibility, with 
respect to allowing them to be counted?
    Ms. SQUIER. Well, this is a problem for States, but the 
bigger problem is that 60 percent of those people that apply 
don't get SSI.
    So, what they have done is they sat there for 2 years, 
without any benefits or services, eating up their time clock. I 
think that's the bigger problem. We can't afford to let people, 
of which a majority will not get SSI, sit there without any 
help to move them into some sort of self-sufficiency.
    Mr. VAN HOLLEN. No, and I understand that issue. I guess 
the question is whether or not--I mean, this is--35 percent is 
obviously still a significant number. I don't know if there is 
any way to try and sort out or provide some accommodation or 
assumption that about a third of the people will get it, and 
make some accommodation based on those lines.
    Ms. SQUIER. I don't know how you would predict who would be 
the ones to get it, and who wouldn't.
    Mr. VAN HOLLEN. Right.
    Ms. SQUIER. This is another area where I think if the State 
truly believes that they have someone who is going to qualify, 
then they ought to put that person in the 50 percent of their 
population that doesn't have to meet work participation rates.
    Mr. VAN HOLLEN. All right. Thank you, Mr. Chairman.
    Chairman MCDERMOTT. Thank you. Thank you very much, Ms. 
Squier. I will tell Dr. Horn you did very well today.
    Ms. SQUIER. Thank you.
    Chairman MCDERMOTT. You survived an hour and 10 minutes of 
this?
    Ms. SQUIER. I did. That's just the way I looked at it, too.
    [Laughter.]
    Chairman MCDERMOTT. Thank you.
    Ms. SQUIER. Thank you very much.
    Chairman MCDERMOTT. You are welcome. The next panel,--if 
you will come up to the table, and we will quickly move on, 
here--we will now hear from the States. I would--I think all 
the Members of the Committee would appreciate hearing from you 
those--answers to those questions that you heard posed to the 
Federal Government.
    This is your opportunity to make us informed what it feels 
like, from your level. I hope that you will avail yourself of 
this opportunity.
    Our first witness on the second panel is Robin Arnold-
Williams, who is from the State of Washington. My staff gives 
me a biography of everybody, and if I am going to go through 
all this--no, no, I'm not going to, except to say that Ms. 
Williams was with Governor Leavitt in Utah for 11 years before 
she came to the State of Washington. So, she has operated in a 
blue State and a red State, and has a balanced background. So, 
Ms. Williams?
    Of course, as I said earlier, your entire testimony will be 
put in the record, so we would like you to summarize, and then 
we will move to questions.
    Ms. ARNOLD-WILLIAMS. Be happy to do that.

  STATEMENT OF ROBIN ARNOLD-WILLIAMS, PH.D., SECRETARY OF THE 
   WASHINGTON SATE DEPARTMENT OF SOCIAL AND HEALTH SERVICES, 
                      OLYMPIA, WASHINGTON

    Ms. ARNOLD-WILLIAMS. Good morning, Mr. Chairman and Members 
of the Subcommittee. I am Robin Arnold-Williams, and I am the 
secretary of the Washington State Department of Social and 
Health Services, and I appreciate the opportunity to be here 
today, to testify on behalf of Washington State, where we 
created WorkFirst in 1997, with very clear goals: work; 
personal responsibility; and accountability.
    We have succeeded. Our caseloads are down 45 percent, 
160,000 parents went off and stayed off welfare, and we now 
have 2.3 percent of our population on welfare, which is the 
lowest level in 30 years. The DRA provisions are impacting how 
we operate our program, and our ability to support families.
    Discussions have turned to ``take out'' and ``keep in'' 
strategies, to achieve the best rate and avoid penalties not to 
best serve families.
    The TANF caseload reduction credit did need updating, but 
States should also get credit for moving parents into 
sustainable employment, for diversion, based on employment, and 
partial credit for families who are participating, but short of 
the Federal standard.
    Deeming of participation in activities governed by the Fair 
Labor Standards Act (P.L. 75-718) is very positive, 
particularly for Washington, where have the highest minimum 
wage, but they also should be expanded to the full 30 hours of 
participation, where required--or where appropriate.
    We believe HHS has too narrowly defined populations 
excluded from work eligibility. In addition to SSI recipients, 
others with medically certified disabilities should be 
excluded, including SSI applicants and SSDI recipients. We are 
also home to a large population of legal immigrants and 
refugees in our State, and we love that it adds to our cultural 
diversity and richness.
    The regulations provide inadequate allowance for us to 
address the barriers for those who can't speak English, have 
little education, or low levels of literacy.
    TANF parents do face significant barriers that have to be 
addressed, if they're going to be successful in the work force. 
Barrier removal services are not fully countable, and are, 
instead, under the very time-limited job search category. I 
encourage Congress to clarify that this was not your intent.
    In our State, research shows that there is a 13 percent 
higher employment rate, and 17 percent higher median wage for 
TANF parents who complete a full year of vocational training, 
but since many of those programs have pre-requisites, the 12-
month lifetime limit really shuts some people out from 
participating in that full 12 months, and getting a credential.
    So, we do believe that an additional time period--and 
allowing up to two years--would ensure more parents are 
prepared to benefit, and can take advantage of that training. 
Basic skills education and English as a Second Language should 
be allowable, as part of vocational education.
    The new child support pass-through options are very 
positive, but prohibiting States from using incentive funds to 
draw down 4D shifts costs to States when we are also being 
directed to take on new responsibilities, like medical support 
enforcement. The result for my State is a loss of $27 million a 
year. It will affect our ability to establish paternity, and 
establish and enforce support orders.
    States were required to submit work verification plans last 
fall, received generic feedback, and submitted revised plans at 
the end of February. States' specific feedback will not come 
until the end of April. TANF rules remain in the early stages 
of clearance. Yet States are going to be subject to the new 
penalty in just 6 months.
    So, we can choose to expend resources revising our policy 
manuals, making systems changes, training staff, doing all 
those things now, to meet the deadline, and risk having to do 
it all over again, or we can we wait until we get final 
feedback and direction, and risk not having sufficient time to 
get it done.
    So, we would ask that you would give consideration to 
modifying the effective date to 12 months from the publishing 
of the final regs, which you heard from Sidonie, may not come 
until September. Yet October, right now, is the date that the 
penalties--we are held accountable for the penalties.
    So, I want to thank you for the opportunity to testify 
today, and I urge you to take steps to return greater 
flexibility to the States to operate our TANF program, while 
holding us accountable for true outcomes. Allow us to return 
our focus to connecting parents to the labor market, so they 
can increase their family income, support their children, and 
build a better life for themselves and their family. Thank you.
    [The prepared statement of Ms. Arnold-Williams follows:]
Statement of Robin Arnold-Williams, Ph.D., Secretary of the Washington 
  State Department of Social and Health Services, Olympia, Washington
    Good morning, Chairman McDermott and members of the sub-committee. 
I am Robin Arnold-Williams, Secretary of the Washington State 
Department of Social and Health Services. Thank you for the opportunity 
to testify today on behalf of the State of Washington regarding the 
impact of recent legislative changes on critical programs serving low-
income families.

BACKGROUND
    In 1996, Congress approved the nation's first major welfare reform 
overhaul in decades. Preceding enactment of the Temporary Assistance 
for Needy Families (TANF), 48 states including Washington State, were 
operating their welfare programs under federal waiver. No two of those 
48 state waiver programs looked exactly alike and yet all were 
successful in their own right. Congress and the states struck a deal--
states were challenged to achieve new goals surrounding work 
participation requirements and time limits within capped block grant 
funding and in return, states were granted unprecedented flexibility to 
design and operate their programs.
    I have had the opportunity to watch this flexibility spur 
innovation in two states. I have been with the State of Washington for 
two years and prior to that with the State of Utah. Washington created 
WorkFirst in 1997 with a motto of ``a job, a better job and a better 
life''. WorkFirst is clear about its program goals and target outcomes:

      Work is better than welfare--paid work offers the best 
opportunity for families to escape poverty;
      Personal responsibility--parents have primary 
responsibility in supporting their children;
      Program accountability--our state constantly assesses 
WorkFirst performance and results, particularly in how it affects low-
income families; and
      Making the best use of limited resources--we safeguard 
the public's money by using limited government resources to help those 
most in need.

    WorkFirst is implemented collaboratively by five state agencies--my 
Department of Social and Health Services, the Employment Security 
Department, State Board for Community and Technical Colleges, the 
Department of Community, Trade and Economic Development and our newly 
created Department of Early Learning. 32 local planning area networks 
cross the state comprised of businesses, community agencies, tribal 
governments, Workforce Development Councils, and faith based providers 
address local issues and needs. Washington State is also proud to have 
the largest number of Tribal TANF and Tribal child support programs in 
the nation.
    The TANF program in Washington has succeeded far beyond original 
expectations. The number of families on welfare in Washington has 
dropped 45% since 1997. Nearly 160,000 parents went off and stayed off 
welfare. Less than 2.3% of Washington's population is on welfare--the 
lowest level in 30 years. Our success is best measured by the number of 
TANF families who entered employment. WorkFirst has helped over 250,000 
parents get jobs. The birth rate among women on welfare has dropped by 
nearly one-third. We received high performance bonuses in 1999, 2001, 
2003 and 2005 for job placement, job retention, and increased 
earnings--exactly the desired outcomes of a program seeking to help 
struggling families, especially single parent households increase their 
incomes and create better opportunities for their children.
    Given the success of Washington State, and all other states, 
expectations were high that TANF re-authorization would retain maximum 
state flexibility and control with any major changes focused on helping 
states address the serious barriers to employment faced by families 
remaining on assistance. Unfortunately, lack of consensus and 
compromise on issues related to work participation requirements 
prevented enactment of a stand alone TANF bill.
    With the passage of the Deficit Reduction Act (DRA) in 2005, states 
were disappointed that transition to measuring and rewarding states 
based on employment outcomes was not included, we remained hopeful, 
however, that implementing regulations would at least not take us 
backwards. We were again disappointed.
    Specific DRA provisions related to TANF and child support are 
having direct impact on how Washington State operates it WorkFirst 
program and our ability to support low-income families. In the past 
year, policy and service discussions have turned to ``take-out'' and 
``keep-in'' strategies to achieve the best participation rate and avoid 
penalties, not to best serve families. Scarce federal and state 
resources are being diverted into new services to ``fill'' hours and 
meet new restrictive definitions rather than to further an 
individualized approach to achieving self-sufficiency. State 
legislatures are being asked to direct new state resources to fund 
those strategies and continue programs that can no longer count as 
maintenance of effort (MOE) but which provide a critical service to 
struggling families.

PARTICIPATION REQUIREMENTS, RATES AND CREDITS
    Separate State Programs (SSP). To date in Washington State, the 
only SSP is our food assistance program for legal immigrants not 
eligible for federal food assistance due to PRWORA. Prior to the DRA, 
Separate State Programs were allowed to count as MOE and not subject to 
TANF work participation requirements. The DRA reversed this long-
standing policy. It is proper for Congress to regulate the use of 
federal TANF dollars but not the use of what are exclusively state 
funds.
    Two-Parent Families: Two-parent families are held to a 90% work 
participation standard, compared to the 50% ``all-family'' rate. With 
the loss or drastic decline in the caseload reduction credit, few if 
any states are expected to meet the two-parent rate for the foreseeable 
future, guaranteeing significant financial penalties that states can 
ill afford. Within Washington State, we now have to allocate state 
funds to finance our Working Connections Child Care program for two-
parent TANF families to reduce the weekly two-parent work participation 
requirements from 55 to 35 hours per family in order to attempt to meet 
the rate. There has long been bi-partisan support for abolishing the 
separate two-parent rate, reflecting recognition that many of these 
families face barriers to employment as serious as those facing single 
parent families. Despite this consensus, the DRA retained the two-
parent rate and I encourage you to act to change that.
    Employment v. Caseload Reduction Credit: While no one can quarrel 
with the need to update the TANF caseload reduction credit, we were 
disappointed that Congress did not take this opportunity to substitute 
a credit more in keeping with the underlying purpose of TANF--moving 
families into sustainable employment. Several proposals for an 
``employment credit''--giving states credit against their participation 
rate targets for successfully moving parents into jobs--were floated 
during the TANF reauthorization debate, and these deserve to be 
reconsidered. The current rule makes little sense from a public policy 
perspective--states should get credit for moving parents into 
employment, not just for reducing the caseload. Congress should also 
consider giving states credit for ``diversion'' from TANF when it is 
based on employment.
    Partial Work Participation Credit: Another common sense proposal 
that was on the table prior to the passage of the DRA was to offer 
states partial credit for families who are participating in earnest but 
falling short of the federal standards. The current ``all or nothing'' 
approach means that a family participating just an hour or two shy of 
the standard is considered ``not participating'' for federal reporting 
purposes. This makes no sense, either for the families themselves who 
are clearly making a good faith effort, or for the states which are 
investing significant resources in these families.
    ``Deeming'' Issues: One very positive feature of the DRA interim 
final regulations is the provision to ``deem'' hours of participation 
in certain unpaid work activities governed by the Fair Labor Standards 
Act (FLSA). This means that parents in unpaid work activities who are 
restricted to less than 20 hours under the FLSA still get credit for 20 
hours of ``core'' activities. This is a critical provision for 
Washington State where we have the highest minimum wage in the country. 
We believe this ``deeming'' should be expanded to the full 30 hours of 
federally required participation, where appropriate.
    Parents or Dependents with Disabilities: The DRA directs HHS to 
define ``who is [and is not] a work-eligible individual'' for purposes 
of calculating federal participation rates. HHS has too narrowly 
defined those populations excluded from ``work-eligibility'', 
particularly with regard to parents with disabilities. In addition to 
SSI recipients, other individuals with medically certified disabilities 
should be excluded from the definition, including SSI applicants and 
SSDI recipients. SSI applicants sometimes wait two years for approval. 
There seems no logical reason to exclude from participation 
requirements some individuals with medically certified disabilities and 
not others.
    Other ``Work-Eligible'' Exclusions: Washington State is home to a 
large immigrant population which adds greatly to our cultural diversity 
and richness. Some of these refugees and other legal immigrants need 
TANF assistance until they can get on their feet economically. 
Unfortunately, the DRA regulations make inadequate allowance for 
addressing the barriers to self-sufficiency experienced by people who 
cannot speak English and have little education and low levels of 
literacy. It takes time for these individuals to bring their English 
skills up to a level that allows them to compete for unsubsidized jobs. 
This is an even more significant problem for refugees, as they often 
enter the U.S. with this same lack of English and literacy levels and 
must also learn to navigate an unfamiliar culture without the benefit 
of having family and friends already here.
    Washington State has proposed two amendments to the DRA regulations 
to accommodate the needs of these individuals: 1) for refugees (and 
others of comparable status, such as victims of human trafficking), we 
propose they not be considered ``work-eligible'' for up to 12 months; 
2) for other legal immigrants, we propose that those who score below a 
certain level of English proficiency and literacy be excluded from the 
definition of ``work-eligible'' for up to 12 months. States should be 
allowed to apply these exclusions on a case-by-case basis.

DEFINITION OF WORK ACTIVITIES
    Activities to Address Employment Barriers: Many of the parents 
currently on assistance face significant barriers to employment, 
including mental health problems, substance abuse, domestic violence, 
and homelessness. While these issues clearly need to be addressed 
before parents can be successful in the workforce, the new interim 
final TANF regulations issued in June actually hinder state efforts to 
help these families. This is because services to address these issues 
are not fully countable under the new regulations but are instead 
included under the very time-limited job search/job readiness category.
    HHS overstepped its mandate in restricting the counting of barrier 
removal activities in this way and I encourage Congress to step in and 
clarify in statute that this was not its intent. The most 
straightforward solution would be to create a separate ``core'' 
participation category for these and other barrier removal efforts. 
Short of creating a new category, HHS could allow states to ``blend'' 
barrier removal activities into existing categories where appropriate, 
including subsidized employment, community service, and training or 
education directly related to employment. For example, Washington State 
currently runs a very successful transitional (subsidized) jobs 
program--Community Jobs--which integrates barrier-removal activities 
into total activity hours. This is exactly the kind of flexibility that 
has allowed states, including Washington, to be so successful in moving 
families from welfare to work.
    Adult Basic Education: TANF reauthorization was an opportunity to 
recognize and accommodate the importance of education in preparing 
families for the living wage jobs that will enable them to become truly 
independent of public assistance. This opportunity was not taken. Basic 
skills and English as a Second Language programs are key components of 
training necessary for lower-skilled individuals to succeed in the 
labor market. Unfortunately, those TANF recipients with the lowest 
skills often get stuck in low-wage jobs with little opportunity for 
advancement. Adult Basic Education should be added as a ``core'' 
countable TANF activity.
    Expanding Vocational Education: Research indicates that in order to 
reach the ``tipping point'' to economic self-sufficiency, a minimum of 
one year of college-level work and a credential are required. Since 
most vocational education programs have several pre-requisite courses 
that must be completed prior, the current one-year lifetime limitation 
on vocational education inhibits access to these programs. Expanding 
vocational education to two years as a ``core'' countable activity 
would ensure that parents are prepared to benefit from this training 
and that the largest number possible can access it. Contrary to the 
restrictive language in the TANF interim final regulations, basic 
skills education and English as a Second Language should be allowable 
as part of vocational education if a necessary or regular part of the 
program or if necessary for a TANF parent to access the training.

FINANCING AND ADMINISTRATION
    Child Support. While we are pleased that states have new options to 
pass through child support to families--we are seeking legislative 
funding and authority to implement this provision in Washington State--
other child support provisions are concerning. Prohibiting states from 
using dollars earned from the federal Child Support Performance 
Incentive award toward the federal Title IV-D match clearly amounts to 
an ``unfunded mandate'' and should be rescinded. This provision 
effectively shifts costs to the state at a time when we are also being 
directed by the federal government to take on new responsibilities 
(i.e. medical enforcement against custodial parents, and collection of 
annual user fees). We estimate this provision alone will cost our child 
support enforcement program about $27 million annually and impede our 
ability to establish paternity, and establish and enforce child and 
medical support orders. This can only result in foregone child support 
collections, which families leaving or avoiding TANF depend on for 
economic survival.
    Work Verification Requirements. The DRA institutes a whole set of 
work verification requirements which amount to a dramatic shift toward 
federal micro-management and focus on process and away from the state 
flexibility and client outcome focus of the original TANF legislation. 
This is the wrong direction for TANF and will only force states to pour 
precious resources into verification that could be better spent on 
strategies and resources that will actually move families towards self-
sufficiency. At the very least, states need a clear ``tolerance level'' 
for compliance with verification requirements, so they are held to a 
reasonable and common standard and have some assurance federal 
penalties will not be assessed for minor ``errors''.
    The requirement for supervised and documented study time in the DRA 
interim final TANF regulations is a good example of verification gone 
overboard. If a TANF recipient is progressing in school, it is evident 
she is spending time studying. It is burdensome to the student and to 
the institution to devote time and resources to such verification, 
especially for single parents and for those facing transportation 
barriers or living in rural areas. States should have the option to 
replace the supervised study time requirement with an allowance of two 
hours of unsupervised study time for one hour of class time (the 
commonly accepted standard) if a TANF recipient is making satisfactory 
progress.
    Effective Dates and Penalties. States were required to submit work 
verification plans by the September 30, 2006 deadline established by 
HHS. While all states have received generic feedback on our plans and 
were required to submit revised plan by the end of February, we now 
understand that we will not receive direct, state-specific feedback 
until the end of April. We also understand the final TANF rules remain 
in the early stages of clearance. Most if not all states are engaging 
with their Legislature to modify state law and budgets without having a 
final sense of what will be required. Considering that states are to be 
subject to the new work verification penalty beginning in just six 
month--October 1, 2007--we are faced with two options, neither of which 
are desirable. We can choose to expend staff and financial resources 
revising policy manual, making computer system changes, modifying 
contracts, and re-training staff in order to have a chance of making 
the October deadline and risk having to re-do some or all of that 
depending on final rules and work verification requirements OR we can 
wait to receive final feedback and direction and risk not having 
sufficient time to make these changes. Consideration should be given to 
modifying the effective date to 12 months from the publishing of the 
final regulations.

TOTALITY OF FEDERAL CHANGES
    As the head of a comprehensive state social and health services 
agency, I also have to call attention to the fact that TANF and child 
support changes are only one piece of the numerous federal legislative 
and administrative changes that have been enacted in the past two 
years. While not all of these are within the jurisdiction of this sub-
committee, they all impact services and supports for vulnerable 
children and adults and struggling families. Washington State can 
provide you with a snapshot of the fiscal impact on the states of these 
changes. The totality of federal changes equates to a biennial request 
from my Department of nearly $80 million in new state funds to ``back-
fill'' loss of federal funds, add staff to meet new administrative 
requirements, and implement changes to our TANF program. Questions can 
and should be asked whether this is the best use of scarce resources. 
More importantly, whether intentional or not, some of these changes are 
creating new barriers for individuals requesting and receiving needed 
services.
    Thank you for the opportunity to testify today. I urge you to take 
steps to return greater flexibility to the states to operate our TANF 
program while holding us accountable for true outcomes. Allow us to 
return our focus to connecting parents to the labor market so they can 
increase their family income, support their children and provide a 
better life for themselves and their family.

                                 

    Chairman MCDERMOTT. Thank you. Mr. Hansell is the acting 
director--or acting commissioner--for the New York State office 
of temporary disability assistance. I think you are acting only 
because the state senate has not yet confirmed your 
appointment.
    Mr. HANSELL. That is correct.
    Chairman MCDERMOTT. You have lots of experience. We welcome 
you.
    Mr. HANSELL. Thank you very much.

 STATEMENT OF DAVID A. HANSELL, ESQ., ACTING COMMISSIONER, NEW 
   YORK STATE DEPARTMENT OF TEMPORARY DISABILITY ASSISTANCE, 
                        ALBANY, NEW YORK

    Mr. HANSELL. Thank you very much. Good afternoon, Mr. 
McDermott, Mr. Weller, and Members of the Committee. Thank you 
for the opportunity to testify on the impact of DRA child 
support and TANF changes.
    Today's New York State TANF caseload of 280,000 represents 
a 75 percent decrease since 1996. In this Administration, we 
intend to continue New York's focus on rapid work engagement.
    In 2006, we collected a record $1.558 billion in child 
support. Only 15 percent of our child support caseload is 
currently receiving TANF assistance; 50 percent were former 
TANF recipients; 35 percent never received TANF assistance. 
These numbers suggest that successful child support programs 
keep many children and families from sliding back onto TANF 
assistance.
    However, we fear that our continued ability to help 
individuals move from TANF to employment may be undermined by 
some of the requirements of the DRA and the regulatory 
interpretations of HHS.
    I should first note that some of the DRA child support 
changes will help strengthen our program. Decreasing the amount 
of arrears triggering passport enforcement has made 44,600 more 
child support obligors in New York State subject to this 
enforcement mechanism, which is a good thing. The 
simplification of child support distribution rules, and the 
increased pass-through for TANF families are also important and 
positive changes.
    The elimination of Federal match for earned incentives will 
hurt our child support program. New York typically earns about 
$25 million, at a minimum, each year in incentives. We pass on 
60 percent of them to our counties, which carry out program 
activities on our behalf. Eliminating the Federal match for 
earned incentives will cost New York State and its counties at 
least $17 million, annually.
    In a difficult fiscal environment, as Robin indicated as 
well, the State and our counties are not in a position to fill 
this gap and to meet all the other new costs associated with 
DRA. Staffing reductions in the child support program are 
likely. The elimination of incentives may jeopardize our 
progress in increasing collections, and perhaps our ability to 
take advantage of the other DRA provisions to increase 
distributions to families.
    We are equally concerned about five significant TANF 
provisions in DRA that have undermined our efforts to increase 
participation rates.
    First, the interim TANF regulations prohibit States from 
counting toward the participation rate any time a participant 
spends in job search activities after six weeks in a given 
year, or 4 weeks in a month. Even worse, under HHS's 
interpretation, a single hour of job search constitutes a full 
week of participation.
    We find it counterintuitive that Congress intended to make 
major investments in job skills development and training, and 
then forbid TANF clients to look for work after 6 weeks. I hope 
you will clarify that Congress had no intention to restrict job 
search so drastically, and that job search can continue beyond 
the 6-week period, if combined with at least 20 hours of core 
work activity, or as a component of a more comprehensive 
activity.
    Second, the interim regulations dictate that an individual 
can be absent from work activities no more than 10 days a year 
for any reason, or 2 days in a month. Most of us work in our 
own jobs under far more reasonable allowances for sick time, 
vacation time, and personal leave. Under HHS limitations, if a 
mother needs to care for a child too sick to attend school for 
more than 2 days in a month, she would not meet the 
participation rate.
    Third, the reason many parents require TANF cash assistance 
is that they are temporarily unable to work, for health 
reasons. Under the interim regulations, HHS has permitted 
treatment activities to be considered only as job readiness 
subject to the same 6-week limitation as job search. This 
unnecessarily restricts State discretion to set reasonable 
timeframes for treatment for physical or mental health 
problems, alcohol, or substance abuse.
    Moreover, the HHS regulatory construct would then preclude 
any attempts to look for work following recovery from counting 
toward the participation rate for the remainder of that year.
    Fourth, some TANF parents are unable to meet the full 30-
hour weekly requirement for a variety of reasons, including 
documented medical limitations. Reasonable partial credit for 
significant participation would create incentives for States to 
focus engagement efforts on all parents.
    Partial credit for part-time employment would also let us 
reconcile, in individual cases, the requirements of TANF with 
those of the ADA.
    Fifth, in New York we exempt clients from work for 
disability reasons only when the social services district has 
required them to file a Federal disability application as a 
condition of TANF eligibility. We should not be penalized by 
having to include them in our participate rate while their 
applications are pending.
    I would also like to mention a few areas of welfare reform 
not addressed in the ADA. First, we also strongly support the 
elimination of the 90 percent participation rate for 2-parent 
families, as the President has proposed.
    Second, States should be allowed to exclude cases from the 
rate during the first month of assistance, when we must put 
child care and transportation in place before we can engage 
them in work activities.
    Third, the Senate-passed TANF reauthorization bill would 
have provided $6 billion in additional child care funding over 
5 years. Quality and affordable child care is one of the most 
significant supports that enables low-income parents to work on 
or off TANF. The demand for child care will only grow with 
increases in participation rates, and I urge you to provide 
additional child care funds to meet this need.
    Given that the final regulations are not expected soon, I 
agree with my colleague, we need additional time to implement 
these rules. We would ask that any penalties, in particular, be 
forestalled at least until Federal Fiscal Year 2009.
    Finally, the President's budget includes funding for a new 
TANF quality control program. We appreciate the need for 
accountability, but this proposal is fundamentally inconsistent 
with the concept and goals of a block grant program like TANF, 
which has produced successful results by encouraging State 
creativity and flexibility. It suggests a mistrust of States, 
despite 10 years of success, and inappropriately focuses 
resource on process, rather than outcomes.
    Thank you for the opportunity to testify, and I look 
forward to your questions.
    [The prepared statement of Mr. Hansell follows:]

  Statement of David A. Hansell, Esq., Acting Commissioner, New York 
 St2te Department of Temporary Disability Assistance, Albany, New York

     Good morning, Chairman McDermott and distinguished members of the 
Income Security and Family Support Subcommittee of the Committee on 
Ways and Means. My name is David Hansell and I am Governor Spitzer's 
appointee as Commissioner of the New York State Office of Temporary and 
Disability Assistance (OTDA). Thank you for the opportunity to testify 
on the impact on states of changes affecting low-income families 
contained within the Deficit Reduction Act of 2005 (DRA).
    OTDA is the New York State agency responsible for promoting greater 
self-sufficiency of the State's residents through the delivery of a 
range of economic benefits and supportive services. New York, through a 
combination of these supports and through the State's emphasis on work 
engagement, has had great success in its TANF program, and has seen 
unprecedented declines in the number of families receiving cash 
assistance. The New York State TANF caseload of approximately 280,000 
at the end of 2006 represents a decrease of about 75 percent from the 
historic high of 1.1 million in 1996. We project a further caseload 
decline of 5.6 percent in this current year. In this administration, we 
intend to continue and strengthen New York's focus on rapid work 
engagement.
    We are also proud of New York's accomplishments in the area of 
child support. We collected a record $1.558 billion in 2006. Over 92% 
of these collections were distributed directly to children and 
families, making a critical contribution to economic self-sufficiency 
for many. In 2006, we continued to improve our paternity establishment 
percentage to 91%, our support order establishment percentage to 81%, 
and improved our cost-effectiveness, collecting $4.75 for every 
federal/state/local dollar spent administering our child support 
enforcement program.
    Our overall success rests on a package of work supports that 
complement these programs, including: the recent increase in our state 
minimum wage to $7.15 an hour; our robust state earned income tax 
credit; our increasing number of families who take advantage of federal 
food stamp benefits; and our substantial investments in subsidized 
child care. However, we fear that our continued ability to help 
individuals move from temporary assistance to long-term work engagement 
may be undermined by some of the requirements contained within the DRA 
and the regulatory interpretations of the U.S. Department of Health and 
Human Services (HHS).

Child Support
    Our Division of Child Support Enforcement supervises the child 
support enforcement program, but program activities are carried out by 
our fifty-eight local social services districts, which include the City 
of New York and the fifty-seven other counties. The child support 
enforcement program helps strengthen families and reduce welfare 
spending by placing responsibility for supporting children on those 
parents with the financial resources to provide such support. For 
families receiving public assistance, the establishment and enforcement 
of support obligations provides an important step towards self-
sufficiency. By providing child support enforcement services to 
families not in receipt of public assistance, future dependence on 
public assistance is avoided.
    At the end of 2006, only 15% of our child support caseload was 
receiving TANF assistance, 50% were former assistance clients and 35% 
had never received assistance. These statistics demonstrate that 
successful child support enforcement programs provide significant 
economic support to children and families on the path to greater self-
sufficiency, and keep many children and families from sliding back onto 
TANF assistance.
    The DRA made many child support changes, some of which will assist 
us to further improve the child support enforcement program in New 
York. For example, decreasing the amount of child support arrears 
triggering passport enforcement from $5,000 to $2,500 increased by 
44,600 the number of child support obligors in New York subject to this 
enforcement mechanism. This change holds great potential for increased 
collections. In addition, the DRA provisions to increase child support 
payments to families and simplify child support distribution rules, 
including the pass-through provision for TANF families, are important 
and will be carefully considered by New York.
    However, I would like to share with you our sense of how the 
misdirected DRA elimination of the federal match for earned incentives 
will negatively impact our child support program in New York State.
    Child support is a results-oriented program. Federal child support 
incentives are earned by states for meeting program performance 
requirements in five core areas (paternity establishment, support order 
establishment, current support collected, arrears collected, and cost 
effectiveness). The child support program's strong mission, effective 
management, and demonstration of measurable progress toward meeting 
annual and long--term performance measures earned OMB's recognition as 
``one of the highest rated block/formula grants of all reviewed 
programs government-wide.''
    Over the last several years, New York has earned amounts ranging 
from $25 to $30 million annually in federal incentives based on our 
strong program performance. We pass on sixty percent of our earned 
incentives to our counties, to reward their local performance efforts 
and provide motivation for them to continually improve their efforts. 
Eliminating the federal match of earned incentives will cost New York 
State and its counties at least $17 million annually. Sixty percent (or 
approximately $10 million) of this lost federal support will be borne 
by our county-run child support offices. To put this impact in 
perspective, the vast majority of county child support program costs in 
New York (a full 70% percent) support adequate staffing to:

      Interview child support applicants to determine if 
paternity and support establishment is necessary
      Build our cases through our child support management 
system so automated locate efforts can be initiated
      Develop petition filing packages to obtain paternity, 
support or judicial enforcement orders
      Build, monitor, and update child support accounts on our 
child support management system
      Address custodial and non-custodial parent customer 
service issues
      Conduct local investigation of cases and appear in court 
on behalf of the local department of social services
      Issue and respond to administrative enforcement actions 
and challenges
      Work directly with the Family Court to obtain appropriate 
orders
      Conduct outreach to program participants and local 
community-based organizations involved with custodial and non-custodial 
parents to improve compliance and parental involvement in their 
children's lives
      Report and maintain records for performance audit 
purposes so incentive funds can be earned

    In a difficult fiscal environment, New York and its local districts 
are not in a position to fill the $17 million gap created by this 
pending reduction in federal funds, and staffing reductions are likely 
to result. In fact, we are fearful that the elimination of federal 
match on incentives will jeopardize our steady progress in increasing 
year-to-year collections, and perhaps our ability to take advantage of 
the other DRA provisions to increase distributions to families.
    Because child support payments from parents reinforce parental 
responsibility, increase the incomes of thousands of New York families, 
promote two-parent involvement in their children's lives, and prevent 
the need for other social services spending, we urge you to undo this 
elimination of the federal match on state-earned child support 
incentives. Abundant research has linked strong child support 
enforcement programs to reduced poverty, decreased TANF caseloads and 
improved child outcomes. Retreating from longstanding federal 
commitments in this area--commitments that have supported a successful 
federal-state partnership--seems to us penny-wise and pound-foolish.
TANF
    We are equally concerned about a number of TANF provisions in the 
DRA that work counter to the flexibility Congress had previously 
provided states and, therefore, hinder our efforts to operate effective 
work programs. There are five significant provisions within the DRA, or 
its interpretation by HHS, that undermine New York's efforts to achieve 
high participation rates and our commitment to helping individuals move 
to employment and economic self-sufficiency:

      Rigid limitations on job search and job placement 
activities. In its interim TANF regulations, HHS has determined, based 
on its understanding of statutory requirements, that states are not 
permitted to count toward the federal work participation requirements 
any time a participant spends in job search and job placement 
activities beyond six weeks in any given year (four weeks 
consecutively). Even worse, under HHS's interpretation, a single hour 
of job search constitutes a full week of participation. HHS has taken 
this position by interpreting the six-week statutory limit as applying 
to any job search, rather than just full time, stand-alone job search. 
We find it counterintuitive that Congress intended to make major 
investments in job skills development and training and then forbid TANF 
clients to look for work after six weeks. This simply makes no sense in 
a work-focused program.

    I urge you to clarify for HHS that Congress had no intention to 
restrict job search efforts in this manner, and that job search beyond 
the six-week period is permissible, if combined with at least 20 hours 
of a core work activity, or as an incidental accompanying activity to 
other components of allowable work activities. Many of our engagement 
programs require one day per week of job search as part of a full-time 
program of work experience and training. The ability to count job 
search and job placement efforts throughout the year is critical to 
enabling states to continually help parents enter the workforce, as we 
have successfully done for the past ten years.

      Limitation on excused program absences that may be 
counted toward the work participation rate. Within the DRA rules, HHS 
has established that an individual can be absent from work activities 
no more than 10 days per year for any reason, with no more than two 
absences in any month. This requirement is overly stringent, and fails 
to reflect the reality of a typical workplace. Most of us are provided 
far more allowable absences, including reasonable sick, vacation and 
personal leave. Under the HHS limitations, if a mother were unable to 
participate full time due to her need to care for a child too sick to 
attend school for more than two days in a month, she would not meet the 
federal work participation standard. Additionally, the time parents are 
required to attend agency-mandated appointments, school conferences and 
court-mandated appointments are not countable as excused absences. 
While we are in complete agreement that it is necessary for states to 
enforce a work absence policy, we seek your support in clarifying these 
provisions within the DRA to permit states to count reasonable excused 
absences, especially those that are beyond the participant's control, 
toward federal work participation standards.
      Restrictions on the types of activities that could count 
toward the federal work participation rate requirement. The reason many 
parents require TANF cash assistance is that they are temporarily 
unable to work due to health-related issues that must first be 
addressed. Under the interim regulations, HHS has only permitted 
treatment activities addressing temporary disabilities to be considered 
as job readiness activities, which are subject to the same six-week 
limit as job search. This unnecessarily restricts state discretion in 
determining a reasonable amount of time to permit recovery through 
treatment, whether for overcoming temporary physical or mental health 
issues or alcohol or substance abuse. Moreover, the HHS regulatory 
construct would then preclude any attempts to look for work following 
recovery from counting toward the participation standard within a year.
      Lack of partial credit for engaging individuals in work 
activities, even if such participation is not full time. Some TANF 
parents may be unable to participate for the full 30-hour weekly 
requirement for a variety of reasons, including documented medical 
limitations, the availability of only part-time work, or the 
assessment-based need for participation in activities not counting 
toward the federal work requirement. Providing reasonable partial 
credit for significant participation short of the 30-hour standard 
would create incentives for states to focus engagement efforts on all 
parents. Additionally, partial credit for part-time employment would 
allow us to reconcile, in individual cases, the potentially conflicting 
requirements of TANF and the Americans with Disabilities Act.
      Exclusion from the work participation rate when the head 
of household has been determined by the state to be medically eligible 
for federal disability benefits. In New York, we exempt clients from 
work for disability reasons only when the social services district has 
required them to file an SSI, SSDI or Veteran's Disability application, 
as a condition of TANF eligibility. We provide necessary income support 
to these disabled individuals as they await determination, and should 
not be penalized by our inability to engage them in work, particularly 
when doing so may jeopardize their eventual eligibility for disability 
benefits. This issue is frustrating to states because the length of 
time these parents remain on TANF assistance is extensive, as it often 
takes a protracted period (generally 12 to 24 months from initial 
application through appeals) for a final decision to be made by the 
federal Social Security Administration.

    We believe that HHS has the authority to address these issues in 
regulation, but whether by regulation or statutory change, we would 
urge you to make sure they are addressed. I would also like to mention 
several key areas of welfare reform that were originally proposed but 
not addressed through the DRA reconciliation process. These are items 
that we believe Congress should reconsider in order to further the 
employment-related goals of the TANF program.

      Repeal the separate 90% work participation requirement 
for two-parent families. We strongly support the elimination of this 
provision, as recommended in the President's 2008 Budget, since a 90% 
participation standard has proven unachievable nationwide, represents a 
diversion from our overall engagement efforts, and works against two-
parent family formation. Even if this is repealed, these parents would 
remain subject to work requirements as part of the All-Families 
participation rate.
      Allow states to exclude cases from the work participation 
rate during the first month of assistance. While New York is a strong 
supporter of rapid engagement and will continue to stress this goal, 
there are significant administrative difficulties associated with 
ensuring a participant is engaged full time immediately. Due to the 
typical need to put child care and transportation services in place 
prior to engagement, it is virtually impossible to engage every 
participant full time as soon as they are found eligible.
      Additional federal funding for child care. The Senate-
passed TANF reauthorization bill would have provided $6 billion in 
additional child care funding over five years, to support efforts to 
engage additional TANF-eligible parents in the labor market. Quality 
and affordable child care is one of the most significant supports 
needed to enable low-income parents to work. Further, the demand for 
child care will only grow with increases in work participation rates. I 
urge you to provide additional child care funds to meet this need.

    States also require additional time to fully implement the work-
related requirements of the DRA and interim final regulations, given 
that the final regulations are not expected to be published for some 
time and that states have not yet received final approval of newly-
required work verification plans. Many of the provisions require states 
to make substantial changes to computer systems, which require time for 
systems development and implementation. In particular, we request that 
any penalties associated with work verification plans be postponed 
until Federal Fiscal Year 2009.
    Finally, I would like to address an item included in the 
President's 2008 Budget proposal that is of great concern to New York 
and other states. The President's Budget includes $11 million for 
efforts to prevent improper payments and establish error rates in the 
TANF program. We strongly appreciate the need for accountability; 
indeed, it is a hallmark of Governor Spitzer's efforts to ensure 
integrity and cost-effectiveness in all state programs. However, New 
York State believes that this proposed form of quality control and 
payment accuracy monitoring is fundamentally inconsistent with the 
concept and goals of a block-grant program like TANF, which has 
produced successful results through encouraging state creativity and 
flexibility. It suggests a mistrust of states despite their ten years 
of clear success in TANF, by focusing more on process than outcomes. 
Given the multiple and varied ways states have invested TANF dollars in 
moving families towards employment and economic self-sufficiency, a 
payment accuracy focus would be almost impossible to measure by any 
equitable and reasonable standard.
    Again, I thank you for the opportunity to testify today and to 
address these very real concerns. I hope that as you review the DRA, 
you will look for opportunities to make changes that respect the 
progress we have collectively made to date in the child support and 
TANF programs, and that will situate us for even better results in the 
future.

                                 

    Chairman MCDERMOTT. Thank you very much. Ms. Ford, I am 
going to give Ms. Berkley a chance to introduce you. So, 
welcome.
    Ms. FORD. Thank you.
    Ms. BERKLEY. Thank you, Mr. Chairman. I would like to 
introduce the Members of our Subcommittee to Ms. Nancy Ford, 
administrator for Nevada's division of welfare and supportive 
services.
    Ms. Ford has served as the administrator since July 30, 
2001. In this role, she oversees programs including TANF, food 
stamps, child support enforcement, child care assistance, 
employment and training for TANF recipients, energy assistance, 
and eligibility for Nevada's Medicare Program. A very daunting 
task.
    Ms. Ford served as the chief deputy attorney general for 
the human resources division of Nevada's attorney general's 
office for 11 years before her appointment. She was in private 
practice before joining the attorney general's office. I would 
like to welcome Ms. Ford to the Subcommittee, and I look 
forward to hearing her comments.
    Welcome. On behalf of my colleague and I, we both welcome 
you.
    Chairman MCDERMOTT. Mr. Porter, if you would like to make--
please don't do it all over again.
    [Laughter.]
    Mr. PORTER. I will be very brief, I promise. Welcome. It is 
good to see you. It was a pleasure to work with you for many 
years while I was in the State senate. Thank you for your work.
    I think a highlight of her background is with the growth 
that we have mentioned in Nevada, it's a serious challenge, but 
Ms. Ford has been on the forefront of technology, in 
transitioning the State into a state of the art--our technology 
is one of the best in the country. So, welcome to Washington. I 
appreciate you being here.
    Ms. FORD. Thank you very much.
    Chairman MCDERMOTT. I see that you had the unusual 
foresight of accepting this job on July 30, 2001, about 3 
months before the real problems hit.
    Ms. FORD. We had a real challenge after September 11, 2001. 
We really did.

 STATEMENT OF NANCY K. FORD, ADMINISTRATOR, NEVADA DIVISION OF 
      WELFARE AND SUPPORTIVE SERVICES, CARSON CITY, NEVADA

    Ms. FORD. Well, I want to thank you very much, Mr. 
Chairman, for having me here. I am very happy to be able to 
present to the Committee.
    One thing I think you need to know. TANF, as we all know, 
was designed to be a block grant so the States would have 
flexibility in designing their own programs, and to be able to 
have their own programs.
    The DRA of 2005 significantly took away that flexibility. 
We no longer have that flexibility. We really design our 
programs to meet the needs of our clients. The focus has 
shifted, as a result of the DRA. The focus is no longer on 
assisting needy families to self-sufficiency. The focus is on 
meeting work participation rates, and avoiding penalties. So, 
it's become a work program, rather than an assistance program.
    Now, one of the major impacts that has happened is the 
removal of the ability of the State to use their State 
maintenance effort dollars to create separate State programs. 
In Nevada, just a couple of years ago, we started to create 
some separate State programs. What we did is we put our 
hardest-to-serve clients that we knew would not be able to 
participate full time--which means 30 hours or more per week in 
strictly defined countable activities--we knew they could not 
meet that.
    So, we took: people that had disabilities under the 
Americans with Disabilities Act, who are pending SSI and 
disability determinations from Social Security, which you know 
can take a significant amount of time; people that met Family 
and Medical Leave Act illness and physical limitations; people 
with substance abuse problems, domestic violence problems, 
mental health issues, and we put them in our separate State 
program.
    In 2006, we were able to make a 43 percent work 
participation rate with the remaining population, 43 percent. 
Everybody talks about 50 percent, and how easy that should be. 
We made 43 percent with the population that did not have 
significant barriers to work. So, by taking in that separate 
State program--they now have to get folded back into our 
participation rate--our rate drops to 27 percent. I don't know 
that we can make 50 percent by wrapping those people in.
    We have had a very good economy. As Mr. Porter pointed out, 
we have had a really good economy in Nevada. Well, what that 
means is that everybody who is capable of work and capable of 
self-sufficiency is out there working. So, the populations that 
is left on our caseload are our most needy, our most barrier-
driven caseload. For Nevada, 38 percent of our work mandatory 
caseload, as defined in the new Federal regulations, have 
significant barriers to work. They cannot meet 30 hours of work 
a week.
    What that means is that 62 percent of our caseload, that 
remaining 62 percent, must carry that 50 percent work 
participation rate. To do that, I don't need to make 50 percent 
with those people. I need to make an 81 percent work 
participation rate with 62 percent of my population. I submit I 
cannot do it. I am going to be facing penalties.
    Now, I think there are ways that we can try and improve 
that, and that's, like, expand eligibility, attract more 
working poor, but is that really the goal? To expand my rolls? 
To get more working poor, so I can count them? Or, is the goal 
to help my most needy citizens to actually get to self-
sufficiency?
    If you do allow us to have separate State programs, then we 
can work with those people. Once they are able to work, and 
able to get into our participation rate, we can transition them 
over into our regular TANF program.
    One of my main concerns is that there may be an unintended 
consequence in the DRA. That is, I am concerned that it will 
actually encourage the break-up of families. The reason for 
that is because if we can't provide the support we need to our 
parents, who are the most needy, and that they can't be 
eligible any more, because they can't meet our requirements, 
they are going to fall off our rolls. They will have nowhere to 
go, and they will have to give their children up to foster care 
or to relatives to raise. So, I am very concerned about 
unintended consequence, as a result of the DRA.
    So, what I would urge is that Congress reinstate the 
ability of States to have flexibility of their State programs. 
I agree, the caseload reduction credit needed to be trued up. 
Like I mentioned, last year in Nevada we made a 43 percent work 
participation rate. We had a 48 percent caseload reduction 
credit. We didn't take advantage of that. We were trying to 
meet that 50-percent rate, and we did everything in our power 
to do that, and we made 43 percent, but like I said, it's now 
down to 27 percent by wrapping those people, those hard-to-
serve people, back in.
    The only other thing I would like to point out is that the 
90 percent 2-parent rate, I think that is universally 
recognized as unachievable. The President has recommended it be 
abolished. We would all concur with that. I also concur with 
the comments made by my colleagues here.
    I would just like to mention the supplemental grant in 
Nevada. We get $3.7 million a year in supplemental grant, in 
recognition of our population growth. That is frozen at the 
2001 level. What that means is that we have had no recognition 
for population growth since 2001. So, we get $3.7 million, but 
it's frozen, so we won't get any more.
    So, I really appreciate the opportunity to speak, and I 
would be happy to answer any questions at the appropriate time.
    [The prepared statement of Ms. Ford follows:]

  Statement of Nancy K. Ford, Administrator, Division of Welfare and 
                Supportive Services, Carson City, Nevada

INTRODUCTION
    Good Morning Chairman McDermott, members of the subcommittee, I am 
Nancy Ford, Administrator of the Division of Welfare and Support 
Services for the State of Nevada. In this position, I am responsible 
for a variety of programs including the Temporary Assistance for Needy 
Families (TANF) Program, Medicaid eligibility, Food Stamps, Child 
Support Enforcement, Energy Assistance, and Child Care Assistance. I am 
also here today as a representative of the American Public Human 
Services Association (APHSA). APHSA is a nonprofit, bipartisan 
organization that has represented state and local human service 
professionals for more than 75 years.
    I would like to thank the subcommittee for allowing me this 
opportunity to share with you Nevada's concerns regarding recent 
changes to TANF as required by the Deficit Reduction Act (DRA) of 2005.

BACKGROUND
    Since the passage of the Personal Responsibility and Work 
Opportunity Reconciliation Act (PRWORA) of 1996, the Division of 
Welfare and Supportive Services as been focused on our mission 
statement ``to provide quality, timely and temporary services enabling 
Nevada families, the disabled and elderly to achieve their highest 
levels of self-sufficiency.'' Through PRWORA, states were provided the 
flexibility to develop and administer programs using the TANF Block 
Grant as long as those programs met the purposes of TANF as defined in 
federal statute. Nevada has demonstrated remarkable success in lowering 
TANF caseloads and moving families to self-sufficiency.
    The number of Nevada TANF clients per capita substantially 
decreased each year after the implementation of PRWORA, until it spiked 
in FFY02 and FFY03 when Nevada experienced an economic disaster related 
to a significant drop in tourism after the tragic events of September 
11, 2001. As Nevada's economy recovered and individuals with job 
experience returned to the work force, the number of clients per capita 
fell significantly each year to present. Please refer to Exhibit # 1. 
Those who were work-ready left our roles; the remaining caseload 
represents the hardest to serve population.

Deficit Reduction Act (DRA) of 2005
    The Deficit Reduction Act (DRA) of 2005 removed state flexibility 
in administering the TANF Block Grant. The DRA made several significant 
changes which negatively impact the states' ability to meet work 
participation requirements (WPR). The Act granted the Secretary 
regulatory authority to define ``work eligible individuals'' who must 
be included in the work participation rate; to define work activities, 
and to establish new work verification and documentation requirements. 
In addition, the DRA removed the states' ability to establish separate 
state programs with maintenance of effort (MOE) dollars and rather 
includes those previously served through separate state programs in 
work participation requirements. Please refer to Exhibit # 2 for a 
comparison of TANF before and after the DRA.
    Nevada estimates more than one-third of our adult work eligible 
TANF clients have significant barriers to employment. These include 
individuals:

      pending Social Security Disability adjudications;
      with disabilities as defined under the Americans with 
Disabilities Act (ADA);
      with mental health issues;
      under a physicians care with temporary work limitations/
waivers that meet the definitions under the Family and Medical Leave 
Act (FMLA);
      in domestic violence situations;
      with unresolved substance abuse issues;
      in their last trimester of pregnancy.

    For the last few years, Nevada has assisted these families by 
serving them under a State MOE program. It was structured almost 
identical to the standard program but differed due to the clients' 
barriers to participating full time in countable activities. Family 
members were required to participate to their full potential in a 
written plan which supported transition of the family from dependency 
to self-sufficiency. This caseload was primarily managed by social work 
staff who worked aggressively with families to address their barriers 
and stabilize the family situation. Once the individuals' barriers had 
been addressed and they had the potential to meet the standard work 
requirements they were moved back into the standard TANF Program.
    DRA effectively eliminated our ability to use state MOE dollars to 
manage our difficult to serve TANF population by defining parents in 
these programs as `work-eligible' and including them in the 
participation rate. This will have a major impact on our work 
participation rates and our ability to achieve long-lasting self-
sufficiency through the provision of tools and support these families 
require.
    For example: In FY 2006 Nevada's transmitted participation rate was 
43%. If we recalculate the participation rate by taking into 
consideration the individuals who were served in our State MOE Program, 
the rate drops to 27%. If you consider the fact that 38% of our 
caseload has significant barriers to employment, it leaves only 62% of 
our caseload deemed capable of meeting the work requirements. To meet 
the work participation rate, 81% of these households would need to be 
meeting participation in order to meet the All-Family WPR of 50%. 
Please refer to Exhibits # 3 and 4.
    Households who are not considered to have `significant' barriers to 
employment still have a multitude of challenges to address, including: 
educational deficiencies, lack of job skills and job experience, 
transportation issues, child care issues, court ordered conflicts 
(delinquency of a child requiring supervision to retain custody, house 
arrest, community services, etc.), inability to problem solve and an 
absence of a family support system to fall back on when something 
unexpected happens.
    It has been Nevada's observation substantially more TANF clients 
are engaged in program activities than the federal participation rates 
suggest. Many are engaged in activities that are acceptable at the 
state level but do not meet the work activity definition established by 
federal regulation. Many clients are in federally countable activities, 
but for fewer hours than required in the federal participation rate 
calculation, or remain in activities for longer periods of time than 
are countable under the federal limitations. There is no work 
participation credit provided for individuals who miss a few days of 
work and average 29.5 or fewer hours per week in a month.
    DRA mandates a change in the states' focus from assisting families 
to their highest level of self-sufficiency to focusing on meeting work 
participation rates and avoiding penalties. We are currently 
restructuring our programs to meet the work participation rate and we 
are concerned an unintended consequence of DRA may be to encourage the 
break-up of families. Parents may be forced to give their children up 
to foster care or relatives to raise if they are no longer eligible for 
the assistance they need.

CONSIDERATION
    Nevada fully supports the concept of transitioning TANF families 
from dependency to self-sufficiency, but suggests DRA fails to 
recognize the effort required to effectively address barriers and 
effect a permanent life style change in our hardest-to-serve 
population. We ask that you consider the following requests.
    State MOE Funded Programs--The elimination of the state's ability 
to use a state MOE funded program to insulate the hardest-to-serve 
population from strict federal work requirements forces the application 
of a Personal Responsibility Plan which cannot be achieved by the 
family and ultimately will result in a termination of TANF benefits. We 
ask that you consider returning some flexibility to the states and 
allow us to develop programs funded with state MOE dollars so we may 
provide assistance to our neediest families, while continuing to pursue 
the ultimate goal of their self-sufficiency.
    Two Parent 90% Work Participation Rate--We ask that you consider 
elimination of the 90% work participation rate for two-parent families. 
This rate has been recognized as unachievable and is proposed to be 
eliminated in the President's 2008 budget.
    Time Limited Work Activities--Under current statute, work 
activities defined under the Job Search/Job Readiness Category are 
limited to six (6) weeks in a 12-month period with no more than four 
(4) weeks consecutive. As this policy is currently applied, just one 
hour of an activity reported in a week exhausts one full week of this 
time-limited activity, although for work participation only one hour 
can be counted. We ask that you consider converting the limitation into 
hours so all hours of participation can be reported without exhausting 
the limitation with only a few hours of actual participation.
    Vocational Education is limited to no more than 12-months per TANF 
recipient. Currently as this policy is applied, just one hour of a 
reported vocational education activity reported in a month exhausts one 
full month of this time-limited activity although for work 
participation only one hour can be counted. We ask that you define the 
limitation based on hours or part/half/full time participation. Most 
vocational education is not full time and to meet the 30 hour 
requirement participants must also work or participate in other 
countable activities. It seems unfair to exhaust a full month of 
activity if the activity itself does not generate enough hours to meet 
work requirements. Defining this limitation based on part/half/full 
time participation would allow the same number of hours to be counted, 
but would allow the activity to occur over a greater period of time.
    Limitations on Counseling and Rehabilitative Services--The Interim 
Final Regulations defined many activities under the time-limited Job 
Search/Job Readiness category including: developing resumes, completing 
job applications, training in interviewing skills, instruction in work 
place expectations, life skills training, substance abuse treatment, 
mental health treatment, and rehabilitation services.
    By defining so many activities in this time-limited category states 
cannot structure their employment programs in a manner that will both 
be successful in assisting the client achieve self-sufficiency and 
ensure the client will meet the work requirements so the state does not 
face penalties.
    For example, if a client needs substance abuse or mental health 
treatment, the issue will not be resolved in a four (4) week time 
period. A reasonable approach would be to provide some intensive up-
front treatment, then move the client into employment or other 
structured work activity, but continue to require the client to 
participate in ongoing counseling and/or treatment to maintain the 
stability necessary to retain employment. The client should be allowed 
to count these required activities toward meeting their work 
requirement.
    While it has been suggested states are not prohibited from 
requiring clients to participate in ongoing treatment in addition to 
meeting their work requirements, requiring too many hours of activities 
for fragile individuals, who are heading fragile families just taking 
their first steps toward independence has been shown to be overwhelming 
and often results in failure.
    We ask that you consider allowing substance abuse treatment, mental 
health treatment and rehabilitative counseling to be defined in such a 
way as they can be countable for longer periods of time. There are ways 
to ensure states continue to stay focused on employment such as 
limiting the number of hours that are countable each month or changing 
statute to define this as a non-core activity that is only countable 
after the core activity requirements are met. Many of these concerns 
are reflected in the attached letter from the National Association of 
State TANF Administrators.
    These new TANF requirements will also place additional strain on 
our child care budgets. In order to support the efforts of our TANF 
families, child care dollars must be increased. A successful program 
will recognize and meet the real life needs of these families and 
provide realistic support to the expectation of attaining self-
sufficiency.
    The DRA also took away the ability to match incentives in the Child 
Support Enforcement Program with federal dollars. Nevada supports 
reinstatement of these matching funds. Securing regular child support 
payments is another component critical to the success of these families 
attempting to transition from public assistance to independent living.

SUMMARY
    Thank you for providing us with this opportunity to share our 
concerns with you. The move in the Interim Final Regulations toward 
mirroring the real workforce in terms of holiday and excused absences 
as well as the clarification of the Fair Labor Standard Act is seen as 
a positive step. As the regulations currently stand, we often hold our 
recipients to higher work expectations than we hold the work force at 
large. We would like to see the trend to mirror the realities of the 
workforce continue by including reasonable accommodation for disabled 
individuals under the ADA and recognizing the provisions of the FMLA.
    Employment has been established as the primary objective of TANF, 
even for families with major barriers to employment. It has become 
clear that TANF programs have shifted from being a safety net for our 
most economically vulnerable families to a work program for low-income, 
mostly work-ready families. Unless there is flexibility provided in the 
TANF Program regarding state funded MOE programs and work activities 
and verification requirements to enable states to achieve the standards 
set by the WPR, states will be forced to restructure their TANF 
programs to assist only those families with the ability to meet the 
strict requirements or face severe financial penalties. The most needy 
families will fall by the wayside.

EXHIBIT 1
[GRAPHIC] [TIFF OMITTED] T0306A.001


EXHIBIT 2

----------------------------------------------------------------------------------------------------------------
                 TANF Prior to 10/01/06                               Deficit Reduction Act Changes
----------------------------------------------------------------------------------------------------------------
 Caseload reduction credit reduces the required   Caseload reduction credit that reduces the
 work participation rate [WPR] by the percentage          required work participation rate [WPR]is amended to be
 reduction in caseload from 1995 to current year          the percentage reduction from 2005 to current year
----------------------------------------------------------------------------------------------------------------
 States can pay for assistance in cases through   All cases including a ``work eligible
 the required State Maintenance of Effort [ MOE]          individual'' as defined in Federal regulations count
 dollars, and those cases do not count in the WPR.        in the WPR, regardless of whether paid for by TANF
                                                          Block Grant or State MOE
----------------------------------------------------------------------------------------------------------------
 States have flexibility to define activities     Activities within the 12 areas specified in
 within the 12 areas specified in the TANF Federal        the TANF Federal statute are defined by the Federal
 statute.                                                 agency through Federal regulations
----------------------------------------------------------------------------------------------------------------
 States have flexibility on determining how to    How hours are to be counted, what
 count hours in the WPR, how frequently and what          documentation is required and how frequently, and how
 documentation to secure.                                 frequently activities are supervised is defined in
                                                          Federal regulations
----------------------------------------------------------------------------------------------------------------
 States determined whether to have internal       States are required to have an internal review
 review procedures and what those are.                    procedure which verifies work participation,
                                                          documentation, and case status. Failure results in a
                                                          new penalty against the TANF Block Grant.
----------------------------------------------------------------------------------------------------------------


EXHIBIT 3
TANF WORKLOAD STATISTICS IN NEVADA AS OF JANUARY 2007
Total TANF Caseload Containing a Work Eligible Individual: 2,557
Total TANF Caseload Containing a Work Eligible Individual With Barriers 
        * in the Hands of a Social Worker: 975
Percentage of Caseload with Barriers: 975/2,557=38%
Percentage of Caseload ``Work Ready'': 1,582/2,557=62%
Required Work Participation Rate Equals 50%. Therefore, 1,279 cases 
        [2,557/2=1,279] must meet an average of 30 hours or more 
        countable activities in a week.
    62% of the caseload is deemed capable of participating in full-time 
activities, which is an average of 30 hours or more per week.
    To achieve a 50% work participation rate, 62% of the TANF 
population must achieve the 50% rate. Thus, 1,279 of the 1,582 families 
must meet an average of 30 hours or more countable activities each 
week. The State must therefore meet an 81% work participation rate with 
that population to meet 50%: 1,279/1,582=81%
    * Barriers are defined as those families in which the parents have 
obstacles that interfere with or prevent the parents from engaging in 
full-time activities. These barriers may include: Disabilities under 
the Americans with Disabilities Act; temporary disability or chronic 
illness that meets definitions under the Family and Medical Leave Act; 
Parents who are pending a determination of disability by SSI; Mental 
health issues; Domestic violence issues; Substance abuse issues; and 
other situations that severely limit the ability of the parent to 
participate at the level required.

EXHIBIT 4
[GRAPHIC] [TIFF OMITTED] T0306A.005


                                 

    Chairman MCDERMOTT. Thank you very much. Ms. Harvey, you 
are from Georgia, and were singled out by the Federal 
representative as being the poster child of perfection. So, 
this is your moment.
    Mr. Lewis, if you wish to say something about Ms. Harvey, 
please.
    Mr. LEWIS OF GEORGIA. Well, thank you very much, Mr. 
Chairman. Mr. Chairman, I am pleased to introduce and to 
welcome Mary Dean Harvey, director of the Georgia Department of 
Human Resources Division of Family and Children's Services. 
Thank you for coming to Washington to testify today.
    Ms. Harvey spent 17 years as a teacher in Omaha. In 1991, 
she was appointed director of the Nebraska Department of Social 
Services. She was president of the Boys and Girls Club of Omaha 
from 1995 to 2002. Recently, she ran the Omaha Save School 
Health Student program, and now she is with us in the State of 
Georgia, the Peach State, where it's a little warmer.
    Ms. Harvey, I may have some tough questions for you later, 
during the hearing, but that does not change my sincerity, and 
I welcome you here today.
    Ms. HARVEY. Thank you.

STATEMENT OF MARY DEAN HARVEY, DIRECTOR, GEORGIA DEPARTMENT OF 
   HUMAN RESOURCES DIVISION OF FAMILY AND CHILDREN, ATLANTA, 
                            GEORGIA

    Ms. HARVEY. Good afternoon, Chairman McDermott, Congressman 
Weller, and Members of the Subcommittee. I am Mary Dean Harvey, 
as Congressman Lewis indicated, director of the Georgia 
Department of Human Resources and Family, division of family 
and children's services. I do thank you for this opportunity to 
speak to you about recent changes to programs assisting low-
income families.
    For decades, the debate over welfare boiled down to one of 
two positions. Either you thought that the funding, if we had 
the right amount of funding and the right amount of 
enhancements, welfare might finally be good enough for 
families. Or, the other side of that coin was that you thought 
that welfare was too good of a deal, already.
    With the leadership of Congress in the nineties, national 
policy recognized the truth. Welfare was not good enough, is 
not good enough, and never will be good enough for any child, 
parent, or family.
    Our mission in State government is to find, in any given 
policy, opportunities to hammer away at poverty and dependency. 
Georgia has found ample opportunity in the DRA, but even before 
that, our governor, Sonny Purdue, made it clear that Georgia 
could not accept persistent dependence for any of its families.
    In that light, we have found the work participation rates 
to be not only reasonable, but modest. If you take a look and 
see what we have accomplished in Georgia, our participation 
rate has gone from 12.2 percent in 2000 to 68.1 percent today. 
Adult TANF cases are down 88 percent to just over 3,700.
    I would like to say that 37 of Georgia's 159 counties have 
0 adults mandated to work, and an additional 88 counties have 
fewer than 10 folk mandated to work. Georgia is a large State 
with a strong economy, but no State could quickly grow itself 
out of poverty in that short of time. Instead, our strategy has 
been threefold.
    One, the first step was to put the numbers aside, forget 
the goals, and to engage our values. Ask ourselves, ``What did 
we believe was good for families?'' We believe that, in strong 
families, the parents work, that welfare is not good enough for 
any child, and that government should be a resource to family, 
not a substitute. When we put those values front and center, 
the numbers took care of themselves.
    Our second step was to stop treating all TANF families as 
if they were the same. We performed a kind of triage, what we 
call our ``pipeline,'' categorizing adults as either ready to 
work, needing a little help, or being far from ready to work.
    Over time, as people move through the pipeline, the move 
from the far from ready to work to bringing home a paycheck. 
There is no question it was a daunting task. For some of them, 
it--we had to do in 4 years what the mommas, the churches, the 
schools, the communities had not done in 30. That was our task.
    I would submit to you that this daunting task cannot be 
tackled by having recipients awarded work participation credits 
for getting a massage or ready ``The Great Gatsby.'' Rather, 
what ought to count as work is actually working, or gaining the 
ability to do so.
    Our third step was to begin to constantly monitor our 
performance, so that we can guide our work, developing 
performance measures that reflected our values, having weekly 
meetings between supervisors and those case managers that did 
the work actually did pay off.
    We did all of these things without a significant increase 
in staff or budget, new legislation, or major policy changes. 
With this strategy, what we have done is the easy and the 
harder. Now we are working on the impossible, which, once we 
have done the rest, no longer looks so impossible.
    That would be the heart of my advice to any State worried 
about the new regulations under TANF, that they cannot be 
implemented, or what happens in one State can't work for their 
families. We all have got to get beyond the point of saying 
that welfare is good enough for some people.
    A large part of reducing poverty has been making sure that 
both parents are supporting their children. For a mother or a 
father, for instance, who is a single parent raising a child, 
child support can make the difference between independence and 
welfare.
    The DRA has encouraged us to become more efficient. As a 
result, we have reduced the processing time for new cases, as 
was stated by Mr. Weller earlier, from a 71-day time that was 
our history, to same-day service. What that represents for 
families is two-and-a-half months of groceries, utilities, and 
everything else that raising a child entails.
    Our newest fatherhood grant expands an almost--already 
robust program to help parents in 12 rural counties get jobs. 
Even though 83 percent of the participants come with a criminal 
record, and 89 percent with no high school diploma, at the 
beginning of this month 70 percent of those who started the 
process are now employed, and 81 percent of those are paying 
child support.
    As vital as the money is, child support is about far more 
than money. A boy who grows up without a connection to his 
father is 300 percent more likely to become incarcerated. A 
girl is 164 percent more likely to give birth outside of 
marriage. Both are 71 percent more likely to drop out of high 
school.
    State governments have a vested interest in encouraging 
fathers to be fathers, not just to save money, but to save 
children. Both goals are so important that Georgia, in response 
to the DRA, included more State dollars, and most importantly, 
we re-engineered our programs to exceed demand.
    Where in the past we paid for paternity testing and other 
fees, now participants bear some responsibility for those 
tests, allowing us to recover about $7.2 million for the State.
    Our experience in Georgia has been that the DRA requires 
States to do things that we should already have been doing. For 
those of you who say it can't be done, we are doing it. For 
those of you who say it might hurt families, I would simply 
ask, ``What can hurt a family more than persistent dependence 
and low expectations?'' States should stop selling recipients 
and themselves short.
    Thank you for affording me the time to speak today.
    [The prepared statement of Ms. Harvey follows:]

 Statement of Mary Dean Harvey, Director, Georgia Department of Human 
      Resources Division of Family and Children, Atlanta, Georgia

    Good morning, Chairman McDermott, Congressman Weller, and members 
of the subcommittee. I am Mary Dean Harvey, Director of the Georgia 
Department of Human Resources Division of Family and Children Services. 
Thank you for this opportunity to speak with you about recent changes 
to programs assisting low-income families.
    It's a privilege to speak with you today about Georgia's 
experiences under the Deficit Reduction Act of 2005, and our efforts, 
in conjunction with Congress, this Committee, and President Bush, to 
reduce poverty and increase family independence.
    For decades, the debate over welfare boiled down to one of two 
positions: you either thought that with a little more funding and the 
right enhancements, welfare might finally be good enough for families; 
or you thought welfare was too good of a deal already.
    With the leadership of Congress in the 1990's, the established 
policy of our nation changed to recognize the truth: that welfare was 
not good enough, is not good enough, and never will be good enough for 
any child, any parent, or any family.
    By necessity, our definition of poverty relies on household income. 
That's an unfortunate necessity, because income is merely a placeholder 
for the real issues that define poverty, such as whether a family can 
be independent, make its own choices, participate in meaningful work, 
and raise children who have a real opportunity to be better off than 
their parents.
    Our mission as representatives of state government is to take the 
policy agreed upon by our elected leaders and find opportunities to 
address the real defining characteristics of poverty--to hammer away at 
dependency and powerlessness.
    Georgia has found in the Deficit Reduction Act and subsequent 
regulations ample opportunity to effectively reduce poverty and 
increase family independence.
    Long before those policies were put into place, our Governor Sonny 
Perdue made it clear that Georgia could not accept persistent 
dependence for any of its families, and that our efforts under TANF 
should therefore be focused on guaranteeing that fundamental right that 
was once called ``Freedom from Want;'' not by merely providing a check 
and thereby camouflaging the problem, but by putting parents to work to 
end it entirely.
    In that sense, we've found the Federal goals for work participation 
to be not only reasonable, but in our estimation, modest. Further, we 
have rejected the use of various credits that would let us get by with 
a lower work participation rate to instead focus on actual work 
participation.
    We have seen great success. Georgia's work participation rate has 
gone from 12.2% in 2000 to 68.1% today. That kind of engagement with 
parents on welfare has brought our Adult TANF cases down 88% to just 
over 3,700. Thirty-seven of Georgia's 159 counties now have ZERO adults 
mandated to work, and 88 other counties have fewer than ten.
    Georgia is a large state with a strong, dynamic economy--but I 
think anyone would agree that no state could simply grow itself out of 
that much poverty that quickly. Neither did we achieve impressive 
numbers by running off adults, as evidenced by the fact that our child-
only cases have remained relatively steady during that time.
    Instead, our strategy has been three-fold. Our first step was to 
say ``Let's put the numbers aside and, instead, focus on what's good 
for families.'' That's perhaps a surprising first step when those very 
numbers were what we were being asked to improve. But we didn't look at 
it that way. We believed it was lives we were being asked to improve, 
and that the numbers would have to reflect that. And we were right.
    At DHR, we share with Governor Perdue a belief that strong families 
are ones where the parents work, that welfare is not good enough for 
any child, and that government should be a resource for families, not a 
substitute. When we put our values front-and-center, the numbers took 
care of themselves.
    Our second step was to stop treating all TANF families as if they 
were the same. We performed a kind of triage, what we call our 
``pipeline.'' By working closely with them, we categorized adults as 
those who were ready to work, those who needed a little more help, and 
those who were far from being work-ready. Over time, those who were far 
from ready became those who needed a little more help; those who needed 
help became those who were work-ready; and those who were work-ready 
became those who are today bringing home a paycheck to support their 
own families.
    Each of these groups needed different kinds of resources and 
different levels of motivation. Some of them just needed to be pointed 
in the right direction and provided the proper motivation. For some of 
them, we were being asked to do in four years what mamas, schools, 
churches, and communities couldn't do in thirty. There's no question it 
was a daunting task.
    But I would submit, from our experience in Georgia, that this 
daunting task cannot be tackled by having a recipient awarded work 
participation credit for getting a massage or reading a list of 
selected American classics. Rather, what ought to count as work is 
actually working, getting the skills to be actually working, or 
removing some significant barrier to actually working.
    Our third step was to begin constantly monitoring performance so 
that we would have empirical data to know what was working, who was 
getting the job done, and where we had to focus our efforts to get 
better. We came up with performance measures that reflected our values 
and began weekly meetings between supervisors and case workers to talk 
about the status of each case, ask hard questions, and demand answers.
    We did all of these things without a significant increase in staff 
or budget, without new legislation, and with few changes to policy.
    With this three-point strategy, we have not only gathered the low-
hanging fruit, but also that which required us to break out our ladders 
and reach into the higher branches. We've done the easy, the hard, and 
the harder. Now we're working on the impossible. But the funny thing 
about the impossible is that, once you've done the rest, it no longer 
looks so impossible.
    That would be the heart of my advice to any state that would come 
before you and worry that new regulations under TANF cannot be 
implemented as they stand, or that what may work in other states won't 
work for their families.
    Our national policy has finally gotten beyond the concept that 
welfare is good enough for ``some people.'' It's up to us as states to 
do the same.
    A large part of reducing dependence and poverty in all states has 
been an increased focus on child support enforcement. And, indeed, a 
key part of our TANF strategy is to make sure that both parents are 
supporting their children. Quite often, that monthly support makes the 
difference between whether a mother and children are dependent on 
welfare or fully independent.
    In respect to child support, the Deficit Reduction Act has 
presented us with an opportunity that is somewhat foreign to many state 
governments: the need to examine the way we do business to get more 
efficient and to clear away the cobwebs of the past.
    Anyone who's written by committee knows how a five-page document 
becomes a 50-page one: everyone adds; no one takes away. Child support 
policy and practice has worked that way, but with a committee spanning 
generations. We've used the DRA as an opportunity to question those 
practices and eliminate the unnecessary.
    As a result, we've reduced processing time for new cases from an 
average of 71 days to same day service. In case you're keeping score, 
71 days equals two-and-half months of groceries, doctor's bills, 
utilities, and everything else that raising a child entails. That for a 
single mother who may be a week's pay from needing welfare at any given 
time.
    Georgia is using our newest fatherhood grant to help parents in 12 
of our rural southern counties get jobs--or better-paying ones--so they 
can begin paying child support. This represents an enhancement of our 
already robust Fatherhood Program. Even though 83% of participants come 
to us with a criminal record and 89% with no high school diploma, at 
the beginning of this month, 60% of those who started the process were 
employed and 81% of those were paying child support.
    But as vital as that money is, child support is about far more. 
That's why Georgia's fatherhood program also focuses on access and 
visitation for fathers. A boy who grows up without a connection to his 
father is 300% more likely to be incarcerated as a young man. A girl is 
164% more likely to give birth outside of marriage. And both are 200% 
more likely to have emotional problems and 71% more likely to drop out 
of high school.
    State governments have a vested interest in encouraging fathers to 
be fathers--not just to save money, but to save children.
    Both goals are important to Georgia--so important that, in response 
to DRA, we've re-balanced our books and re-engineered our programs to 
include more state dollars. And whereas in the past we picked up the 
tab for costs like paternity testing and processing fees, now we're 
asking participants to bear some of that responsibility--recovering 
$7.2 million for the state. More than simply helping us balance the 
books, these user fees advance a core belief we at DHR hold about good 
government services: that they work best when they're a partnership. By 
actively responding to the requirements of the DRA, rather than merely 
figuring how to ``live under them,'' we have built the capacity to not 
only meet demand, but exceed it.
    The partnership philosophy extends to the relationship between the 
Federal government and the states, requiring an active response from 
both sides. Our experience in Georgia has been that the Deficit 
Reduction Act has asked and required that we do those things we really 
should have been--and were--doing to start with. At the Georgia 
Department of Human Resources, our mission is to be a resource to 
families, not a substitute. Our estimation is that Congress, through 
the DRA, has made that a national policy.
    For those who say it can't be done: we're doing it. For those who 
say it might hurt families, I would ask: what can hurt a family more 
than persistent dependence and low expectations? States should stop 
selling recipients--and themselves--short.
    Thank you for affording me this time to speak with you. I'd be 
happy to answer any questions you may have.

                                 

    Chairman MCDERMOTT. Thank you very much. Mr. Herger, would 
you like to introduce Mr. Wagstaff?
    Mr. HERGER. Sure. Welcome, Mr. Wagstaff. It is good to have 
you. While not a constituent of mine, you are certainly from 
our great State of California, and you're a director of the 
Sacramento County Department of Human Assistance. Welcome.
    Mr. WAGSTAFF. Yes. Mr. Herger, I'm sure you won't remember 
this, but you and I worked together in the mid-eighties on the 
original GAIN bill in California. So, it's a long time ago.
    Mr. HERGER. I do. We were both very young men.
    Mr. WAGSTAFF. Exactly. Still are.
    [Laughter.]

   STATEMENT OF BRUCE WAGSTAFF, DIRECTOR, SACRAMENTO COUNTY 
                 DEPARTMENT OF HUMAN ASSISTANCE

    Mr. WAGSTAFF. Mr. Chairman and Members of the Subcommittee, 
thank you for including counties in today's discussion on 
recent changes to programs assisting low-income families.
    I am Bruce Wagstaff, director of human assistance for 
Sacramento County, California. I am representing the National 
Association of Counties (NACO), as well as the County Welfare 
Directors Association of California. I am also the former TANF 
administrator for the State of California. I have submitted my 
full testimony for the record.
    With respect to the TANF program, the counties that 
administer TANF are proud of how we have implemented the 1996 
Federal welfare reform law. We have changed an entire culture, 
moving our staff from check writers, adhering to strict process 
rules, into counselors who help clients move from welfare to 
work.
    The way in which we use our funding has also shifted from 
cash aid to supportive services. From caseload reductions to 
increases in work, to a decreasing reliance on cash assistance, 
TANF has been a success.
    Against this backdrop of success, States and counties had 
hoped that reauthorization would fix some of the issues that 
had been rightly identified as limiting State flexibility in 
the original law, but when the Department of Health and Human 
Services issued regulations, we were disappointed to see them 
heavily focused on process, rather than outcomes. The 
regulations include narrow definitions of work activities and 
process-heavy requirements for verifying and documenting 
participation.
    I would like to make it very clear that counties are not 
afraid of increasing participation to move recipients into 
work. In California, we began the work to increase 
participation before TANF was reauthorized, because it was the 
right thing to do for families and children. What we want is 
the ability to run our programs in the best way for our 
clients, our business communities, and our local situations.
    A majority of those on our welfare rolls today are engaged 
in some activity, including a mix of work, education, training, 
and treatment. It is important to note, particularly given the 
discussion you have heard today, that the Federal work 
participation rate captures only those families who are 
participating full-time in federally-recognized activities. It 
does not capture the tens of thousands of individuals 
participating part-time and/or in activities not recognized by 
the Federal program, such as mental health and substance abuse 
treatment, and domestic violence services.
    The Federal rate is also a point-in-time snapshot. It does 
not recognize the many people who are engaged, but who are new 
to the program, leaving welfare soon, or in between formal 
activities.
    One additional issue to mention before I get into specific 
recommendations, particularly given the discussion today, is 
child care. These services are absolutely essential. Without 
them, the parents we work with would be unable to participate 
fully in welfare-to-work activities. We believe that, without 
any increases in the child care and development fund, or the 
TANF block grant, it will be harder and harder for States to 
provide child care to all recipients who need it. We would urge 
you to revisit this issue, and consider providing additional 
funds for child care for our participants.
    We understand that you will not be able to completely 
reopen the reauthorization discussion. However, smaller changes 
would increase flexibility, and return us to a system focusing 
on outcomes, putting clients to work, rather than process.
    We propose the following specific changes which are fully 
detailed in my written testimony: give partial credit for 
partial participation; clarify and simplify work verification 
and reporting requirements; allow realistic participation in 
behavioral health activities; allow partial participation for 
persons with disabilities; and count job search, job readiness, 
basic skills in English as a Second Language as a component of 
any work activity.
    Finally, I would echo what Ms. Williams and other have 
said, that the statute be adjusted to adjust the implementation 
schedule and delay the October 1, 2007 deadline for work 
verification plans. As you heard, States are still in the 
process of talking to the Federal Government about those plans. 
All States got them in by September of 2006, as was required, 
but subsequent to that, the Federal Government issued 
guidelines that required every State to resubmit those plans.
    So, we would ask that we get at least a year, from the time 
that our plans are approved, before any penalties are subject 
to imposition.
    I want to also mention some comments on child support in my 
remaining time. Counties urge Congress to restore the DRA cuts 
to the child support program. The cuts will reverse State and 
county progress in establishing child support for families, and 
affect millions of children whose families depend on these 
payments.
    In order to improve child support, Congress established a 
competitive incentive program. Funds must be reinvested in the 
system, and States and counties could use the payments to 
leverage additional Federal funds.
    Effective October 1, 2007, States and counties will be 
prohibited from this practice. Losing the ability to leverage 
Federal dollars is of most concern to my colleagues who 
administer child support. The incentives have enabled States 
and counties to double their collection rate over the past 10 
years.
    Mr. Chairman, I understand you are considering introducing 
legislation on this issue. Just yesterday NACO adopted a 
resolution supporting legislation to restore these cuts.
    Two other provisions I want to make quick reference to, 
with respect to the DRA on child support. First, the imposition 
of a collection fee discourages parents from participating in 
child support, and will increase the likelihood of families 
remaining on, or needing public assistance.
    Second, to encourage paternity establishment, the Federal 
Government provided a 90 percent match for those costs. The DRA 
reduced the match to 66 percent, which will reduce States' 
ability to establish parentage.
    In California, the child support cuts will reduce funding 
by over $90 million a year. You have heard other States talk 
about this. Michigan reports $28 million in lost funds, 
Minnesota $23 million. It is so dire in Wisconsin that Lacrosse 
County is holding a raffle, where the proceeds will help fund 
the child support program. They are actually here today and 
gave me one of their raffle tickets.
    [Laughter.]
    Mr. WAGSTAFF. This concludes my formal remarks. Thank you, 
again, very much for including counties in this hearing today. 
As you consider your next steps in this congress, please do not 
hesitate to contact myself or our Washington, D.C.-based staff 
if you have further questions. Or, if you would like to visit 
local programs when you return to your districts. Thank you 
very much.
    [The prepared statement of Mr. Wagstaff follows:]

Statement of Bruce Wagstaff, Director, Sacramento County Department of 
                Human Assistance, Sacramento, California

    Mr. Chairman and members of the Subcommittee on Income Security and 
Family Support, thank you for including counties in today's hearing on 
recent changes to programs assisting low-income families. I am Bruce 
Wagstaff, Director of Human Assistance for Sacramento County, 
California. I am representing the National Association of Counties 
(NACo) and the County Welfare Directors Association of California 
(CWDA), as its Self-Sufficiency Committee Chairman. I am also the 
former TANF Administrator for the State of California.
    We particularly appreciate the opportunity to testify before you 
today because many of the statutory changes and subsequent regulations 
issued by the Department of Health and Human Services are having a 
devastating effect on our ability to provide effective services to 
families and children in need.
    As background, NACo is the only national organization representing 
all county elected and appointed officials. More than 2,200 of the 
nation's counties are members of NACo. CWDA represents the human 
service directors from each of California's 58 counties. CWDA's mission 
is to promote a human services system that encourages self-sufficiency 
of families and communities and protects vulnerable children and adults 
from abuse and neglect.
    The role of counties in administering federal low-income programs 
varies widely among states, and even within states. In California, for 
example, counties administer all social services programs, with 
oversight from the state. Others, such as Pennsylvania administer some, 
but not all of the programs at the county level, with others 
administered by the state. There are also a few states where some but 
not all of the counties administer one or more of the programs within 
this committee's jurisdiction. With this diversity in mind, NACo asked 
numerous state associations of counties and county human services 
directors to send us their comments on the effect of the TANF 
regulations and the cuts to child support in preparation for this 
hearing.

TANF
    As you are well aware, welfare as we knew it changed forever with 
the passage of the Temporary Assistance to Needy Families program more 
than a decade ago. The counties that administer TANF are proud of how 
we implemented the 1996 federal welfare reform law and our authorizing 
state statutes. We formed strong public-private partnerships, bringing 
together employers, community--and faith-based organizations and the 
other local and state agencies that serve our participants. We changed 
an entire culture, moving our staff from check-writers who adhere to 
strict process rules into counselors who assist clients in moving from 
welfare to work. The way in which we use our state and federal funding 
has shifted from a focus on cash aid to a focus on supportive services 
such as child care, transportation, and skills training. Instead of 
speaking of ``entitlements,'' we speak of ``self-sufficiency.'' From 
caseload reductions, to increases in work, to a decreasing reliance on 
cash aid, TANF has been a success.
    Against this backdrop of success, states and counties had hoped and 
anticipated that TANF reauthorization would fix some of the issues that 
had been broadly identified as limiting state flexibility in the 
original law. For the most part, the Deficit Reduction Act in and of 
itself did not severely limit states' flexibility, nor did it expand 
flexibility as we'd hoped it might. When the Department of Health and 
Human Services issued regulations to implement the DRA changes, 
however, we were disappointed to see them heavily focused on process 
rather than outcomes--something we thought we had moved away from with 
the 1996 TANF statute. The regulations include narrow definitions of 
work activities, add parents who have reached their statutory time 
limits on aid into states' work participation rate calculations, and 
implement process-heavy requirements for verifying and documenting 
participation.
    I would like to make it very clear that counties are not afraid of 
participation. In California, we began the work to increase 
participation before TANF was reauthorized, not just because we felt 
pressure from the federal government but because it was the right thing 
to do for families and children. For example, our state enacted a 
statutory requirement that every welfare-to-work participant have an 
engagement plan in place within 90 days of them entering the program; 
we did this three years ago, when the idea was under discussion in 
Congress. What we do want, however, is the ability to run our programs 
in the best way for our clients, our business communities and our local 
situations.
    Unfortunately, the regulations that have been issued will impede, 
rather than enable, our efforts. I am here today to ask you to be 
enablers, to help us in our work, and to improve upon some of the most 
problematic areas of the regulations.
    You might be surprised to hear that a majority of those on our 
welfare rolls today are engaged in some activity, including a mix of 
work, education, training, and treatment. States generally report lower 
participation numbers than this, however, because the federal work 
participation rate captures only those families who are participating 
full-time in federally recognized activities. It does not capture the 
tens of thousands of individuals participating part-time and/or in 
activities that are not recognized by the federal program, such as 
mental health and substance abuse treatment, domestic violence 
services, English as a Second Language programs, and services to assist 
with learning disabilities. Counting only those in federal activities 
for the minimum number of hours is misleading, because it may lead some 
to conclude that the rest of our participants are sitting around doing 
nothing--and nothing could be further from the truth.
    The federal rate is also a point-in-time look. It does not 
recognize the many people who are engaged in our programs, but who are 
new to the program, leaving welfare soon, or in-between formal 
activities. To illustrate why this matters, think about an emergency 
room. At any given time in the ER, there will be some percentage of 
people waiting and some percentage being served. However, if we observe 
the ER over the course of the entire day, we would hope and expect that 
100 percent of the people are served. The federal work participation 
rate is a snapshot--it essentially looks at that one moment in the ER 
when a relatively small percentage of patients are being served, rather 
the much higher percentage served over the course of time.
    Our programs do face numerous challenges. For California counties, 
as with states and counties across the country, one major challenge is 
to address and remedy the problems of families that are a long way from 
being ready to maintain stable employment and move off welfare. These 
families often struggle with a host of personal issues such as poor 
education, limited skills, little or no work history, behavioral health 
issues, domestic violence, disabilities, and involvement with other 
public systems such as child welfare and law enforcement. Many of these 
families are engaged in work or other activities, but for less than the 
required number of hours. Many include a disabled adult or child, a 
victim of domestic abuse, or other situations that render them exempt 
from participation under California rules and who we believe should be 
exempt under the federal rules as well. This does not mean that we stop 
working with these families to get them engaged in appropriate 
activities; it is a recognition that the barriers for some are so great 
that expecting 32, 35, or 40 hours of work from them, at least at 
certain points in time, is unrealistic.
    Another major challenge is to assist displaced or underemployed 
workers who lost their jobs during the recent recession. In many areas, 
unemployment rates soared during the past few years. Many of those who 
recently entered TANF or returned to the program after losing a job, 
already have marketable skills but need temporary assistance, possible 
retraining, and supportive services to boost them back into the 
workforce.
    We really do have a number of different subgroups within our 
program today, just as we did in 2001 when we first began talking with 
elected officials about TANF reauthorization. There are those who just 
need a quick hand-up to get back into the labor market, and those who 
are longer-term recipients who might have received welfare as children, 
for example, and are now in the program as parents themselves. Finally, 
there are those who are working and participating, but are not yet able 
to earn enough to get off of aid forever. Figuring out how to help all 
of these very different sets of families is extremely important and 
extremely complex.
    One additional issue I would like to mention before I get into a 
few specific recommendations for change relates to supportive services, 
especially child care, that states provide to working TANF families. 
These services are absolutely essential--without support like 
subsidized child care, the parents we work with would be unable to 
participate fully in welfare-to-work activities. These services are 
also costly. Quality child care does not come cheap. Without any 
increases in the Child Care and Development Fund (CCDF) or the TANF 
block grant, it will continue to be harder and harder for states to 
provide child care to all recipients who need it without sacrificing 
other necessary services and supports for families on aid. We urge you 
to revisit this issue and consider providing additional funds for child 
care for our participants.
    The National Association of Counties and CWDA support maximum state 
and county flexibility in implementing the TANF changes. Unfortunately, 
the interim final rule issued last August and subsequent advisories 
issued by the Administration for Children and Families have not only 
reduced flexibility but have also increased program complexity. 
Comments we received from around the country were consistent in 
expressing concerns over the work reporting and verification 
requirements, the work participation rate calculations, and the 
limitations on allowable activities.
    We understand that you will not be able to completely reopen or 
overhaul the Deficit Reduction Act or the subsequent regulations. 
However, several smaller changes would increase state and county 
flexibility in meeting participation rates--returning us to a system 
focusing on the outcome--the participation rate--rather than process. 
Changes can be made without compromising the work participation 
requirements or the focus on moving families toward self-sufficiency. 
We propose the following specific changes:

      Give partial credit for partial participation. Many 
recipients are participating for a portion of the required hours in 
federal activities. However, states receive no credit for partially 
participating individuals. At various times during the TANF 
reauthorization debate, partial credit proposals were on the table. We 
believe these proposals should be revisited, as they help to ensure 
that the efforts of states and counties to engage participants in as 
many hours as possible are recognized and recorded.
      Clarify and simplify the work verification and reporting 
requirements: NACo believes that the documentation requirements for 
many of the allowable activities will pose an administrative burden and 
should be revised. These include daily reporting for job search and 
biweekly reporting for education related to employment, secondary 
school attendance, vocational education, and jobs skills training, 
among others. Simpler methods exist, such as negative reporting systems 
in which participants are presumed to be engaged in their assigned 
activity unless the program supervisor reports otherwise.
      Allow realistic participation in behavioral health 
activities. The interim rules allow for some substance abuse, mental 
health and domestic violence services to be counted toward job search/
job readiness activities for up to 4 to 6 weeks. However, the rules 
essentially force states to count even one day of participation in 
these activities as an entire week. This is counterintuitive, and a 
departure from how such activities would likely be utilized in the 
regular world of work. States and counties should be able to count an 
hour of participation as one hour. Since these activities are limited 
to six weeks, essentially prorating one hour to count as a week of 
participation would short-change individuals with substance abuse or 
other behavioral health problems. States and counties should be able to 
count 240 hours a year of these activities for each individual.
      Allow partial participation for persons with 
disabilities. States and counties should be allowed to count 
participation by individuals with disabilities based on the number of 
hours that their medical professionals deem appropriate for the 
individual, even if it is below 30 hours a week. This is consistent 
with the Federal Rehabilitation Act and Americans with Disabilities 
Act. Count job search, job readiness, basic skills and English as a 
second language as a component of any work activity: Today's economy 
requires a well-trained workforce. Individuals with poor basic skills 
and poor English language skills will not be able to obtain meaningful 
employment. Counties, therefore, suggest that basic skills training, 
remedial education, and English as a Second Language count as job 
readiness activities and be an allowable component of vocational 
education. Job search and job readiness are critical components of 
self-sufficiency plans. The six-week restriction should apply only to 
stand-alone job search as a core activity. The limitation should not 
apply to job search and job readiness activities that are combined with 
other work preparation activities.
      Do not penalize states that help children with a safety 
net. A number of states, including California, have chosen to give a 
reduced grant to children whose parents reach their time limits on aid 
but still meet other eligibility requirements, including having income 
below a certain level. The HHS regulations include the parents of these 
children in states' work participation rates. Please do not put states 
in the position of having to decide whether to eliminate assistance for 
these vulnerable children.
      Two Parent Work Participation Rates. NACo and CWDA would 
like to commend the administration for proposing to eliminate the two-
parent work participation rate as part of their FY 2008 budget 
proposal. The 90-percent rate is unrealistic and will penalize states 
that are otherwise doing a good job of engaging participants.

    Finally, we recommend that statute be enacted to adjust the 
implementation schedule and delay the October 1, 2007 deadline.  States 
submitted work verification plans to the Department of Health and Human 
Services by September 30, 2006 as it requested. However, HHS 
subsequently issued blanket guidance to states and required all states 
to revise and resubmit their initial plans, which are just now being 
sent back to HHS. It is our understanding that states will not receive 
direct feedback from HHS until April at the earliest. States and 
counties will likely have to make various changes at that point and 
work with HHS to secure final approval, giving us five months at most 
to retrain staff. This is a recipe for problems, inconsistencies and 
incomplete implementation. States and counties should be given at least 
one full year from the date that they receive final approval of their 
work verification plan to implement without fear of being penalized in 
the meantime.

Child Support
    Counties urge Congress to restore the cuts to the child support 
program made under the Deficit Reduction Act. The cuts will reverse 
state and county progress in establishing child support for families 
and ultimately will affect millions of children whose families depend 
on the payments to meet daily living expenses.
    In order to improve the administration of the child support 
program, Congress established a competitive incentive program for good 
performance. Funds earned are required to be re-invested in the system. 
Additionally, the law was crafted to allow states and counties to use 
the payments toward leveraging additional federal investments in the 
program. Effective October 1, 2007 states and counties will be 
prohibited from this practice under the child support program.
    Losing that ability to leverage additional dollars is of most 
concern to my colleagues who administer child support. Those efforts 
and incentives have enabled states and counties to double their 
collection rates over the past ten years and thousands of families 
avoid the social service system as a result. Other federal initiatives, 
such as programs supporting marriage, also allow re-investment of 
federal dollars as match.
    Mr. Chairman, I understand that you are considering introducing 
legislation on this issue. This weekend, NACo adopted a resolution 
supporting legislation to restore these cuts.
    Two other provisions in the Deficit Reduction Act are also 
troubling. The imposition of a collection fee discourages parents from 
participating in the child support program and will, coupled with the 
reduced collections, increase the likelihood of families remaining on 
or needing public assistance. When families do not receive child 
support, they need more help from public assistance programs. Some 
states and counties may choose to waive the fee and absorb the costs in 
order to encourage parents to participate and/or because it may be 
cost-effective than the costs of charging the fee.
    To encourage paternity establishment, the federal government has 
provided a 90 percent match for those costs. The DRA reduced the match 
to 66%. This decrease reduces states' ability to establish parentage. 
When children are deprived of the right to two parents, the door to 
Social Security, pension/retirement benefits and health insurance, 
opportunity for extended family ties (especially the critical father/
child relationship) and access to critical medical history and genetic 
information is closed to them.
    In California, the child support cuts will reduce funding to the 
state's program by over $90 million a year. Efforts are underway in 
California to backfill the loss of funds, given the large return on 
every federal dollar invested. A federal restoration would help the 
state invest even more into this successful program.
    While California may backfill the loss, counties from around the 
country have told us that many states will not be able to do so. While 
time does not permit me to provide you with the detailed responses we 
received, here is a sample of what these cuts will mean to county 
programs. These cuts in administrative funding will compound the real 
losses in financial support provided to families.
    Michigan counties face a potential loss of $28 million. The loss in 
Minnesota is estimated at $23 million. Indiana counties face a 
shortfall of over $7 million. New York counties expect to lose $10 
million a year. North Carolina Counties expect to lose $5.3 million in 
revenues. Ohio expects a reduction of $60 million a year. Pennsylvania 
counties may lose over $4 million in two incentive payments. Wisconsin 
will lose about $6 million in FY 2007, $1.7 million of which will be 
attributed to Milwaukee County. When the cuts take full effect next 
year, the projected loss for Wisconsin counties by 2008 is $25 million. 
It is so dire in Wisconsin that LaCrosse County is holding a raffle 
where the proceeds will help fund the child support program.
    These administrative losses will reverse years of progress in the 
collection of support for families by producing a ripple effect due to 
the way the incentive funds have bolstered county staff who pursue and 
enforce support orders. A good illustration is Ohio. The only way to 
compensate for the loss of funds would be to reduce staff by 
approximately 25 percent. Ohio collects almost $600,000 in child 
support per staff member. The Center for Law and Social Policy 
estimated that this would translate to a reduction in child support 
collections of $197 million in the first five years. Clearly, the ones 
who would suffer the most are the children. Similar scenarios are 
projected in counties in many other states. I will submit additional 
information from some of those counties in other states before the 
hearing record closes.
    This concludes my formal remarks. Thank you again for inviting us 
to testify and provide the county perspective. As you consider your 
next steps in this Congress, please do not hesitate to contact me or 
our Washington, D.C.-based staff if you have further questions or if 
any of you would like to visit local programs when you are back in your 
districts. At this time I would be glad to answer any questions you may 
have.

                                 

    Chairman MCDERMOTT. In your testimony, one of the things 
that you posed for the Committee, I think, is the fact that 
we're looking at five different programs. You wonder how in the 
world do people sitting at this dais make decisions about what 
makes sense for all of you. I couldn't help but looking at the 
data, that the Georgia TANF program says that less than one-
third of those people leaving TANF are going to work.
    Now, I--the rest of you--she does it in 1 day. How can 
possibly one State do it in 1 day to evaluate people for TANF, 
and others take as long as you do? I would like to hear what 
the response is, because you are saying that the game is now--I 
think Ms. Ford's testimony was that it's becoming a work, not 
an assistance program. It really is one of games of numbers for 
us. I am not sure that that's necessarily in the best interest 
of the States.
    I would like to hear you talk a little bit about that. Any 
place. Ms. Williams?
    Ms. ARNOLD-WILLIAMS. I would be happy to start. I think a 
couple of things--and you rightfully pointed out you have five 
very different programs here--and for those of us that have 
been involved from the very beginning, that was the whole point 
of welfare reform, via waivers and then statutory changes.
    Let me just talk about in your State, in your home State, 
where I have the privilege of operating the program. First, we 
do do a lot of diversion when people first come in the room. 
So,--to apply for assistance. Talk about what's really going on 
with their family. We don't get credit for that, because they 
never come on assistance, but 75 to 80 percent of those 
individuals don't come on assistance, or stay off for at least 
12 months. We track them.
    So, we do some of that 1-day service, and that first-day 
service. We don't get credit for that, because they're not on 
our rolls. That's one of the things we think we should get 
credit for, if it's for employment.
    Second, we do a very comprehensive assessment and 
evaluation of individuals, because we do want to find their 
barriers. We do want to know if they have substance abuse 
problems. We do want to know what their educational backgrounds 
and skill levels are, so that we can appropriately put them 
into activities for which they can best benefit, and are 
individualized for them.
    So, I will tell you, that takes us 30 days, because we do 
one as a part of ours, our community colleges do a part of the 
assessment, our job service agency does a part of the 
assessment. We want to take a comprehensive look at that. 
That's the decision that the State of Washington has made, and 
we are free to make under the TANF program, to say, ``We want 
to do a comprehensive assessment.''
    Chairman MCDERMOTT. Until the present set of regulations, 
you will have to change it.
    Ms. ARNOLD-WILLIAMS. We are going to continue to do it, and 
we will run the risk that we won't be able to meet all of those 
rates.
    Chairman MCDERMOTT. Mr. Hansell?
    Mr. HANSELL. Yes, thank you. I believe my colleague from 
Georgia said she did 1-day assessment for child support, is 
that correct? Not for TANF. I would be extraordinarily 
impressed if any of my colleagues did a 1-day assessment for 
TANF.
    Certainly, our experience in New York has been that the 
best way to move people from TANF to employment as quickly as 
possible is to do the most comprehensive possible assessment up 
front, which I think is what Robin is saying. What we want to 
do is make sure that we put exactly the right set of services 
in place for each client that is going to give them the skills, 
and overcome whatever deficits or barriers they have, so they 
can first succeed in a work program within TANF, and then 
succeed, hopefully, in working outside of TANF.
    So, it does require some more up front investment, but our 
experience is that, in the long term, it's much more effective, 
in terms of moving people into work programs, and then 
ultimately, off of TANF into full-time employment and self-
sufficiency, off of public assistance.
    Chairman MCDERMOTT. How is it that she made all these 
cuts--or reduced her caseload in the last couple of years? Why 
are you unable to do that?
    Mr. HANSELL. Oh, we have done that. Our caseload has 
dropped, as I said in my testimony, 75 percent since the 
beginning. Just in the past year, our TANF caseload is down 
another 5 or 6 percent. So, our caseload is continuing to 
decline----
    Chairman MCDERMOTT. Still continuing down. Is everybody 
continuing down?
    Ms. ARNOLD-WILLIAMS. Yes.
    Ms. HARVEY. Mm-hmm.
    Chairman MCDERMOTT. Okay.
    Ms. FORD. Thank you, Mr. Chairman. We in Nevada also do 
extensive assessments to make sure that what we are dealing 
with with our clients, that we are providing them with the best 
opportunities for success. What our goal is, is to get them 
into jobs where they can have wage gain, so they're not just 
getting a minimum wage job and going out there, but that they 
have got a job where they can anticipate that they are going to 
have wage gain, and they're going to be self-sufficient into 
the future.
    So, assessments are very, very important. We have social 
workers on staff that actually do----
    Chairman MCDERMOTT. Do you get any more credit for getting 
them into a job where there is a ladder up, or a dead end job?
    Ms. FORD. No.
    Chairman MCDERMOTT. It's the same credit?
    Ms. FORD. It's the same credit, regardless, and they have 
got to be in a full-time activity of 30 hours or more.
    Yes, our caseloads are down. We are at the lowest rate per 
capita--see, that's another thing. The work participation rate 
is based on raw numbers, it's not based upon your per capita 
population. We are at the lowest per capita rate ever. 
Therefore, we have the most hard to serve in our population 
now. We still have to meet a 50 percent work participation 
rate.
    So, the people remaining on our rolls are the people that 
have the most significant barriers, and have the toughest time. 
Even if they don't have barriers like disabilities or medical 
issues, they are not skilled in life skills, they are not 
trained, they are not educated. We have to make them attractive 
to employers. If they're not attractive to employers, they're 
not going to get employed.
    Chairman MCDERMOTT. I guess one of the things--I see my 
time is up, and I don't want to overstep it too far--but one of 
the things that troubles me in listening to your testimonies 
about the participation of people with handicaps, where you're 
waiting for another Federal agency to make a decision, it's 
almost as though the States are caught between a rock and a 
hard place.
    In the one sense, they have come in for assistance, and in 
another place, they are waiting to get assistance or 
adjudication that will allow them some assistance, and you are 
being penalized for keeping them on the roll. You have to count 
them, even though it doesn't make a whole lot of sense. Is that 
a fair assessment of what's going on?
    Mr. WAGSTAFF. Yes, Mr. McDermott, it is. Mr. McDermott, if 
I might add, from a county perspective, I can assure you, in 
terms of these time frames that we are talking about, that in 
my county and every other county colleague I have talked to, 
the interest is in moving recipients into work as quickly as 
possible, and to good jobs.
    The issue is that different clients have different needs, 
have different issues that have to be dealt with. What my 
caseworkers tell me nearly every day is that they need that 
flexibility to address that individual situation, to develop an 
individualized case plan that spells the best future for that 
particular client.
    So, that's why we're concerned when we say job search can 
only be 12 weeks, or behavioral health can only be 4 to 6. In 
many of our counties, we are dealing with methamphetamine 
crises. That treatment takes much longer than that to be dealt 
with, if that client is truly going to be able to get a job and 
keep it.
    Chairman MCDERMOTT. I did not let you speak, Ms. Harvey, or 
I did not give you an opportunity. Please, if you have got 
something you want to say back to these people, I would like to 
hear. Or, in response to what they said.
    Ms. HARVEY. No, I am in full agreement. An assessment is 
essential. Our average length of stay on TANF is 17 months. Our 
view--and I think, if there is a difference, is a philosophical 
one. It's how we frame our house. Our house and our TANF work 
is framed by values. We believe that $264 a month and $267 a 
month is not sufficient. We believe that work is inherently 
good for the person. We believe that people should have a stake 
in their own future, self-determination, if you will. That is 
how we frame our work.
    Therefore, we have always--particularly in the last 2 
years--construed TANF to be a work program, and not an 
assistance program.
    Chairman MCDERMOTT. Mr. Weller?
    Mr. WELLER. Thank you, Mr. Chairman. Ms. Harvey, in your 
testimony, you talked about how you changed the culture of 
welfare in Georgia to focus on what's good for families, 
providing individualized assistance, you monitor performance, 
and you demand accountability.
    When I was here in 1996 and welfare reform was enacted, 
that was a pretty basic philosophy of what was included in 
welfare reform. That was certainly the message I was hearing 
from my own taxpayers back home. They want to help folks, but 
they want accountability, they want personal responsibility, 
and they want to lift people out of poverty.
    It appears you believe that--in leadership, and that 
implementing the vision of leadership is really critical. It's 
my understanding in Georgia the counties administer TANF 
through the program under the State, so each county has an 
office that administers----
    Ms. HARVEY. That is correct.
    Mr. WELLER. I have a performance management report card for 
Fulton County Department of Family and Children's Services from 
the employment services section. I was looking at this, and 
this chart is color-coded, and it shows in November of 2003, it 
looked like, on average, the work participation was 8 to 10 
percent.
    Well, some changes must have occurred. If you look at this 
chart, you will see that changes must have occurred--and 
accountability, essentially--for the caseworkers. Then, over 
time, some went from 8 percent to well over 50 percent. I 
noticed those who achieved that were promoted to supervisor. 
Those who were not successful went on to other things.
    What occurred? What management decision, or management 
change occurred to see these improvements in work participation 
rates by the clients under each of these caseworkers?
    Ms. HARVEY. Principally, it was direct leadership of my 
boss, Commissioner B.J. Walker, who came aboard about 2004, 
hired by Governor Purdue. Commissioner Walker has a 
philosophical belief that work is good, that families matter, 
that the best government is a supportive government, and not a 
substitute family. That drives everything.
    It drove it to the point that a person was put on the 
ground, representing leadership on the ground in counties, 
looking at data, looking at performance, looking at who the 
people are that they are working with, and actually engaging 
the workers in the whole discussion about how do we move these 
folks from where they are to where they can be, and need to be?
    So, our pipeline concept, which grew out of this, was 
actually created by workers themselves. They said, ``A part of 
that assessment, we must do that assessment''----
    Mr. WELLER. The workers, not a caseworker?
    Ms. HARVEY. By the caseworkers. If I could add, Georgia is 
not my first experience with this. In Nebraska, we were a 
forerunner to the Federal Government, with a time clock and a 
cap on birth and all of that, when I served under Governor 
Nelson. I can say to you, the--one of the bigger stumbling 
blocks is the culture of the employees that you have to deal 
with.
    One, we had run a program for decades that was about 
checkwriting, that was about help, that was about assistance, 
but it was a different kind of help. I have seen generations of 
folk grow up on assistance. This is the first time in my life--
and I just racked up 62--it's the first time in my life I can 
imagine that we really are not preparing for generations of 
dependents, but we are actually talking about engaging folk 
meaningfully.
    Now, is there a perfect environment out there to get that 
done? No, there is not, but should that stop us from pursuing? 
I don't think so.
    Mr. WELLER. Mr. Chairman, may I put this chart into the 
record? I ask unanimous consent.
    Chairman MCDERMOTT. Without objection.
    [The provided material follows:]
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    Mr. WELLER. Just to follow up--I realize my time is limited 
here--on child support, Ms. Harvey mentioned--and I think she's 
very proud of that--they reduced from 71 days to 1 day 
processing of child support, and the impact of what that means. 
Can each of the other agencies represented here tell us how 
many days in your particular agency it takes to process child 
support claims?
    [No response.]
    Mr. WELLER. Those who know their answer.
    Mr. WAGSTAFF. Mr. Weller, for California--I have to check 
statewide data on that, and get back to the Committee. I don't 
have statewide data with me.
    Mr. WELLER. Ms. Ford?
    Ms. FORD. I would be happy to provide additional data. I 
know we have child support workers in our TANF offices. So, 
when people come in to apply for TANF, they go over to our 
child support worker, and they get information.
    Mr. WELLER, but you don't know the number of days?
    Ms. FORD. I can't tell you exactly how many days, but I 
would be happy to get the information.
    Mr. WELLER. Thank you.
    Ms. ARNOLD-WILLIAMS. I also don't have that right with me, 
but I would be happy to provide that to you.
    Mr. WELLER. Mr. Hansell?
    Mr. HANSELL. I will do the same. Our child support process 
also includes judicial involvement, so it is somewhat outside 
our control, but we will get you that information.
    [The information follows:]

Honorable Jim McDermott
Chairman, Subcommittee on Income Security & Family Support
Congress of the United States
U.S. House of Representatives
B-317 Rayburn House Office Building
Washington, DC 20515

Dear Representative McDermott:

    Thank you for inviting me to testify on behalf of New York State 
before the Subcommittee on Income Security and Family Support on the 
recent changes to programs assisting low-income families contained 
within the DRA of 2005 (DRA). As promised, I am writing to follow up in 
response to the question you raised at the hearing on March 6th 
regarding the amount of time it takes to put child support in place 
compared to Georgia's ``same day service'' program. Your request for a 
letter from the Governor of each state represented at the hearing 
regarding documentation of citizenship prior to Medicaid eligibility 
for newborns is being sent under separate cover. Additionally, I would 
like to reiterate New York's concerns and recommendations with regard 
to the child support and TANF portions of the DRA.
    Following your Subcommittee's hearing, our child support director 
contacted his colleague in Georgia to obtain more information on 
Georgia's ``same day service'' program. Our understanding of Georgia's 
``same day service'' program is that it is being tested in Carrolton 
County, Georgia and involves providing a walk-in applicant with 
information and services sufficient to build a case, perform locate of 
noncustodial parent and make a referral to a legal office for any 
necessary petition preparation prior to the applicant's leaving the 
office that same day. To the degree that a child support applicant in 
New York is able to provide sufficient information on a noncustodial 
parent through our application/interview process, we too are able to 
provide same day service to the point of petition referral. In fact, 
later this year New York will be piloting an electronic filing 
initiative with our Family Court to bring same day service provision 
from intake through petition filing and court calendaring, so an 
applicant will leave the office having made an application and 
receiving a court petition hearing date the same day. Therefore, as you 
can see, New York also has a very streamlined child support process 
that will only become more efficient as we move forward with electronic 
filing.
    New York has demonstrated a great deal of success in helping 
families and individuals reach self-sufficiency, of which record child 
support collections is one mechanism. As I mentioned in my testimony, 
New York's package of work supports also includes; the recent increase 
in New York's minimum wage to $7.15 an hour; the strong New York State 
earned income tax credit; the increasing number of families who take 
advantage of Federal food stamp benefits; and the substantial 
investments we make in subsidized child care. However, our continued 
ability to help individuals move from temporary assistance to long-term 
work engagement will be undermined by some of the requirements related 
to child support enforcement and the Temporary Assistance for Needy 
Families (TANF) Program contained within the DRA and the regulatory 
interpretations of the U.S. Department of Health and Human Services 
(HHS).
    Thank you for sponsoring H.R. 1386 repealing the DRA provision 
eliminating Federal child support incentive payments earned by states 
and reinvested in child support programs. New York has earned amounts 
ranging from $25 to $30 million annually in Federal incentives and 
sixty percent of these earned incentives are passed on to New York's 
counties to reward their local performance efforts. Consequently, the 
loss of these funds will primarily be borne by New York's county-run 
child support offices, will have a direct impact on the many essential 
services these offices provide, and could also jeopardize New York's 
steady progress in increasing year-to-year collections. Your proposed 
legislation, H.R. 1386, will maintain the longstanding Federal 
commitment to child support enforcement, and is a solid fiscal 
investment in a program that has demonstrated much success over the 
years.
    We are just as concerned about a number of TANF provisions in the 
DRA that hinder our efforts to operate effective work programs. To 
reiterate the five major provisions within the DRA, or its 
interpretation by HHS, that undermine New York's efforts to help 
individuals move to employment and economic self-sufficiency: rigid 
restrictions on job search and job placement activities; unreasonable 
limitations on excused program absences; irrational restrictions on the 
types of activities that could count toward the work participation rate 
requirements; lack of partial credit for engaging individuals in work 
activities; and the failure to exclude from the work participation 
rates the instances when a state has determined the head of household 
to be medically eligible for Federal disability benefits. It is 
imperative that your review of the DRA make changes that respect the 
progress all states have made in engaging individuals in work, and that 
will situate us for even better results in the future. Therefore, we 
urge you to make sure that these very important TANF issues are 
addressed, either through regulation or through statutory change.
    Again, thank you for the opportunity to testify before your 
Committee. As we move more and more individuals to self-sufficiency I 
look forward to working with you and your staff on these issues of 
paramount concern to New York and other states. If you or anyone from 
your staff should require information in addition to what I have 
provided here, please do not hesitate to contact me or the Director of 
Governor Spitzer's New York Office, Derek Douglas.

            Sincerely,
                                                   David A. Hansell
                                                       Commissioner

    Mr. WELLER. If each of you could, share that with the 
Subcommittee. Ms. Harvey, could you explain briefly how you 
were able to reduce it from 71 to 1 day?
    Ms. HARVEY. Absolutely. I said to you we always look for 
opportunities to improve, and that is how we run our 
governmental entity. So, we engaged the university in taking 
our child support enforcement unit through the rapid process 
improvement plan. So, they trained them, they had them looking 
at all of their business processes from beginning to end, 
making critical decisions, to see what can I do better, 
differently, what can be eliminated.
    So, it wasn't business as usual. Voila, the end product, in 
looking at using that one activity, case working with the case, 
we found that we could eliminate the 70 days.
    Mr. WELLER. Well, that is a good point you made, that extra 
70 days of child support will certainly make a difference, 
whether paying for child care or a health care concern, or just 
school books for the child.
    Ms. HARVEY. Correct.
    Mr. WELLER. Thank you, Mr. Chairman, for your generosity of 
time.
    Chairman MCDERMOTT. Mr. Lewis?
    Mr. LEWIS OF GEORGIA. Thank you very much, Mr. Lewis. Ms. 
Harvey, you know the heart of my congressional district is 
Fulton County.
    Ms. HARVEY. Yes, sir.
    Mr. LEWIS OF GEORGIA, but in Fulton County it is just--it 
makes up the city of Atlanta and other surrounding communities. 
There are more homeless people, more people showing up for 
meals. How can you say that the--that Georgia, that Fulton 
County, can be used as a model for the rest of the Nation?
    Ms. HARVEY. First of all, I would never say--I mean, I am 
not in the business of advocating a model, so I want you to 
know that right now. I can only tell you what our experience 
has been.
    In Fulton County, there are a multitude of problems, as 
there are in every metropolitan area, but I would believe that 
many of the homeless folk that you find, no matter where they 
are in the United States, are not the result--they are not 
former either AFDC recipients or TANF recipients, but there are 
some other issues driving that, but, sir, I would support you--
--
    Mr. LEWIS OF GEORGIA. These are families, these are 
children, mothers and fathers.
    Ms. HARVEY. Mm-hmm.
    Mr. LEWIS OF GEORGIA. Are you serving any of those people?
    Ms. HARVEY. Not through TANF, we are not. However, in 
looking at--and that is one of our beauties, is that we have an 
idea, I mean, we are so poised to look at good public policy, 
and I am proud to say our policy impact leader is here today--
but one of the things we are looking at is how we can work with 
municipalities, how we can work with counties to combine what 
we can bring to the table with what they can bring to the 
table, in order to address those problems, many of which, for 
the adults, are mental health and orientation.
    Mr. LEWIS OF GEORGIA. You are saying that welfare is not 
good enough for any child.
    Ms. HARVEY. That is correct.
    Mr. LEWIS OF GEORGIA. I agree with you, that every child 
deserves more, but welfare is certainly better than nothing, 
which is what an increase in the number of poor children in 
Georgia are getting.
    In 2003, only about 1 out of every 4 children living below 
the poverty line in Georgia receive cash assistance from TANF. 
In 2005, that level dropped to less than 1 out of every poor 
kids receiving assistance. How do you account for that?
    Ms. HARVEY. Well, frankly----
    Mr. LEWIS OF GEORGIA. Why do you call it--why are you 
saying it is so successful? If Georgia has been so successful, 
all of this money, all of these resources left over, why can't 
we make someone take the resources and give it to Nevada, if we 
are being so successful?
    Ms. HARVEY. We still have issues in Georgia.
    Mr. LEWIS OF GEORGIA. I hate to come down this way, but 
because poor people are working, does it mean that they are 
better off?
    Ms. HARVEY. I would submit that a working person is better 
off in many respects than a person who is not.
    Mr. LEWIS OF GEORGIA. Down another period in our history, 
the days of slavery, everybody had a job, everybody worked. So, 
I don't understand. You have working poor.
    Ms. HARVEY. Yes.
    Mr. LEWIS OF GEORGIA. People who work every single day.
    Ms. HARVEY. Absolutely.
    Mr. LEWIS OF GEORGIA. They cannot afford child care, they 
cannot afford the basic necessity of life. So, you are going to 
tell us that is better? Every person, make no difference how 
that person might earn?
    Ms. HARVEY. Most people--I would say 99 percent of human 
beings, adults today who become engaged in the work force, will 
earn more than $264 a month. If it's $270, they are financially 
better off.
    Mr. LEWIS OF GEORGIA. Mr. Chairman, I have a report here 
from budget and policy priorities, and it also mention the 
Census Bureau to show that the facts in the State of Georgia is 
different from what the witness is stating, and I would like to 
ask that this report be submitted for the record.
    Chairman MCDERMOTT. Without objection. It is a report dated 
March 6, 2007.
    Mr. LEWIS OF GEORGIA. That is right, Mr. Chairman.
    [The provided material follows:]

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    Mr. LEWIS OF GEORGIA. Let me ask another question. What 
type of groups are receiving these fatherhood grants?
    Ms. HARVEY. In South Georgia, they are principally----
    Mr. LEWIS OF GEORGIA. Are many in metropolitan Atlanta, and 
Fulton County?
    Ms. HARVEY. I am not aware that there are any fatherhood 
grants going on directly through this particular stream of 
funding, but I do know that I have had meetings, along with--
who was here earlier--our State child support director. I have 
had meetings with people in Atlanta, and we are focusing 
principally on prisoners, when they come back into the system. 
There are some reforms that we have made around that, where we 
will put their arrearage in abeyance.
    Mr. LEWIS OF GEORGIA. The resources, to grant directly to 
an organization or groups----
    Ms. HARVEY. No, sir. I didn't have that kind of grant. Our 
child support office got one of those this year, and that's the 
one that went to South Georgia to expand on what was going 
there, but we are working with the existing infrastructure in 
Atlanta.
    Unfortunately--well, not unfortunately--but one of our 
high-profile groups that we are working with are men and/or 
women, but principally men, who are getting to be released from 
prison, and bringing them back. The one thing we know is they 
have come out, and their arrearage has built up while they were 
in.
    So, the whole--the temptation is to go underground, as 
opposed to stand up to the plate and 'fess up. We want to meet 
with them, prior to release, and work with them to say we will 
hold the arrearage in abeyance, and it will not continue to 
accrue. ``Let us work with you to get you employed and engaged 
with your child,'' because we believe that intrinsic occurrence 
is as important as any dime that they can add into that 
household.
    Mr. LEWIS OF GEORGIA. Thank you, Ms. Harvey.
    Chairman MCDERMOTT. Thank you. Mr. Herger?
    Mr. HERGER. Thank you very much. Again, Ms. Harvey, thank 
you for the job you have done. Thank you for the role model you 
are for the rest of us.
    Ms. HARVEY. Thank you.
    Mr. HERGER. I thank Mr. Wagstaff. It does bring back some 
memories back to those early eighties, and really what we were 
doing during that time, building this program, was in this same 
area, which was to look around the States, those who were able 
to go out in some unique programs, and try to model something 
that was working.
    It was very enjoyable, the trips we took--and very 
informative--to Massachusetts, Pennsylvania, and West Virginia; 
very different programs they had--as we modeled ours.
    So, Ms. Harvey, I think back. I have a very small business 
background. As a small business man, we were always looking out 
at who were excelling at what they did. What is it we could 
copy from them, and their good ideas, and then incorporate it 
ourselves? Similar to what we did then.
    I had the privilege of being Chairman of this Committee for 
6 years--incredible time that I value as one of the most 
rewarding times of my political career.
    One of those concerns I had during that period of time is 
how easy it is to be able to see this culture, or a mindset, of 
just because you have people who seem to not be able to make it 
as some others were in society, were not able to find those 
jobs--and they all had different handicaps of one type or 
another--that somehow, having this culture that they couldn't 
do it. Maybe we didn't say that, but that was definitely the 
culture, that somehow they couldn't do it, and we would see 
generations, three and four generations of not being able to do 
it, so to speak, that were locked into this welfare mentality.
    Again, as Mr. Wagstaff and I had the opportunity of trying 
to find those who broke this cycle, and then we heard again, 
``Well, we did the first 50 percent, but the last 50 percent, 
they were really the hard ones. We can't do them, either.''
    Yet, as you go around, you would see these examples of 
programs where they did do it. They did go out and find these 
individuals. Yes, it took analyzing, what was the situation, 
what can we do with them, and preparing them, and just very 
fundamental preparation.
    If I could ask you--because you are, I think, an incredible 
role model, whether it's in Nebraska or here in Georgia--what 
we can try to learn from you somehow. You have that unique 
ability to be able to make it work. For others, what would you 
say would be the first three steps that you would recommend to 
other States to better engage welfare recipients and work?
    I think you already mentioned engaging caseworkers, but if 
you--helping others who would like to have successes like you 
are having, what would you encourage them to do?
    Ms. HARVEY. Well, like with any business, I believe it 
starts from the value frame what is the value system? If the 
value of the leadership is that work is a good thing, then we 
find the ways to make work happen. If the value of the 
leadership is that the best family is a family with an engaged 
parent or two that's employed in the work force, then you work 
to have that happen.
    You may have to throw away the old habits, because--and 
you're not working for a 30 percent or a 20 percent, 50; our 
State goal is 70 percent. So, you're not working for any of 
that, but you're working for strengthening families.
    So, one, let your value system drive it. Then, second, the 
use of data. We consume data in our State government in an 
unbelievable fashion. Folk who never looked at the aftermath of 
what they did, are now having to examine it on a weekly basis 
to say, with our pipeline, where they are moving.
    I have brought with me our most recent pipeline stats, to 
talk about where we are, statewide. We know how many and who is 
in every category. So, this is what our workers must use in 
order for them to move people from not job ready, to almost job 
ready, to job ready. They are evaluated on that particular 
outcome. So, use the data to inform your work.
    Then, thirdly, folk like me should get out of the way of 
people who do the work, actually. Our job is to set the vision. 
Our job is to communicate that vision. Sell it, if you will, 
and then give them the tools that they need to get the work 
done. Let them know how they are doing, cheer them on.
    Mr. HERGER. Thank you very much.
    Chairman MCDERMOTT. Thank you very much. I think it is fair 
to say that the caseload issue is both one end coming in, and 
one end coming out. If you drop your caseload by 80 percent, as 
you did in Georgia, it's not hard to show the kinds of numbers 
that you're not showing. I think that's the thing that--you've 
got to ask yourself, ``Where are all those people?``
    If only one-third of them went to work, where did the other 
60 percent go, or 70 percent go? That's the real question that 
I think is unanswered by this discussion. I think we may not 
get to it today.
    Mr. WELLER. Mr. Chairman?
    Chairman MCDERMOTT. Yes?
    Mr. WELLER. I believe that our guest from human services 
from Washington State noted that their caseloads had dropped by 
60 percent. So, we have seen a drop in caseloads across the 
board, differing in each State.
    So, the question could be, we have seen a case drop in 
caseloads in various States across the board. Some of those 
States have actually provided a significant increase in work 
participation, while others have not, even though they have had 
a drop in work caseload. So, I guess there is a different way 
to look at that question, as well.
    Chairman MCDERMOTT. There is more than one way to skin a 
cat and describe it.
    [Laughter.]
    Chairman MCDERMOTT. Ms. Berkley, please?
    Ms. BERKLEY. Since all politics is local, I am going to 
direct my comments to Ms. Ford.
    Right now, in my congressional district, we have about 
5,000 new residents a month coming into town, and that's down 
from a high of about 7,000. I have a lot of extra people. I 
know that we talked about supplemental money to help the State 
of Nevada out, but it's obviously not enough to cover the 
numbers of people that are coming in.
    Now, I think you do an extraordinary job, and I know that 
you have worked for Republican Governors ever since you took 
this job. I would hardly call either one of them a bleeding 
heart liberal, but I am sitting up here, and have the ability 
to make meaningful changes and help you to do your job well, 
which in turn, will improve the quality of life of the people 
that I represent.
    If you were sitting up here, rather than the questions I 
have for you, what would you be recommending that we do, that I 
do, so that you can do your job better, and help the people of 
Nevada get off welfare--and I don't think there is anybody 
sitting up here that thinks that--that doesn't believe work is 
good, and engaged families are critical to the success of 
future generations of this country--what do I do to help you?
    Ms. FORD. Thank you, Ms. Berkley. If I were sitting up 
there on the panel, I think the single most important thing is 
to give States flexibility on dealing with their most needy 
populations. As I said, that's reinstating the ability to use 
the maintenance of effort dollars to create separate State 
programs, without having them count in the work participation 
rate.
    We all agree, the most important thing is to get people to 
work, but the other thing that nobody has talked about here is 
there is a 5-year time limit on TANF, 5-year lifetime time 
limit across the country. So, some of the caseload reduction 
might be due to people reaching that 5-year limit. I mean, we 
don't know.
    Ms. BERKLEY. What happens to them when they hit that limit?
    Ms. FORD. They may still get food stamps, they may still 
get Medicaid, they may still get certain supportive services, 
but they no longer get TANF. They may not be self-sufficient. 
Nobody has talked about that 5-year time limit. To me, the 5-
year time limit is the most important thing. The work 
participation rate is something artificial and arbitrary that 
has been set so that people can feel like we're meeting--that 
we're actually getting these people to work, and to self-
sufficiency.
    Well, with the 5-year time limit, we have an incentive to 
get people to self-sufficiency, because otherwise, they're 
going to fall on their local governments for support, or 
they're just not going to have support at all, and become 
homeless.
    So, I don't think that has been talked about at all, but 
that is one of my concerns.
    Ms. BERKLEY. I visited, recently visited, Martinez 
Elementary School, and discovered that they had brought a 
trailer on campus, because they have 114 homeless children 
attending Martinez, and they needed a place to get dressed and 
get washed, so that they could go to class.
    How--in a community like Las Vegas, with a booming economy, 
a robust, very robust economy, how do you account for this? 
What can we do, as a Government? Somewhere along the line, 
there is responsibility. I am a great believer in personal 
responsibility, but what can we do to give these people a hand 
up? Not a handout, but a hand up, so that we don't have 114 
kids getting dressed in a trailer in one of the most affluent 
districts in the United States of America?
    Ms. FORD. I am afraid I may not have an answer for that? I 
do not deal with the homeless population, I don't administer 
housing programs, but it's very, very difficult. What we need 
to do is be able to work with these families, and get them to 
self-sufficiency. If I can't provide them the assistance they 
need to be able to coach them, and get them to that level, 
they're just going to fall off my rolls.
    That is why I am saying it has become a work program, 
rather than an assistance program. Some of our neediest 
families and our neediest children can't get our assistance, 
because they can't meet the work participation requirements, 
and there is just no place else for them to go.
    Ms. BERKLEY. Let me ask--I know that some of the 
recommendations you have made is greater flexibility. I agree 
with you, of course. The five-year time limit, to increase that 
limit.
    Now, I know throwing money at a problem isn't always a 
solution. Could you use more money? Would it help you to 
administer your programs?
    Ms. FORD. I would have a hard time saying no.
    [Laughter.]
    Ms. FORD, but--well, see, and that's the other thing that I 
think needs to be recognized is, yes, the block grant is still 
stable-funded, but it has not been re-allocated since it was 
first created. It's the same amount of money as it was back in 
1996.
    Ms. BERKLEY. So, here is my question. In a State like 
Nevada, with a population increasing by 5,000 people a month, 
in my congressional district--and I am only 1 of 3--what does 
static funding do to a State like Nevada?
    Ms. FORD. It prevents us from enhancing our programs, and 
making them really meaningful to our neediest families.
    Ms. BERKLEY. Thank you very much. Mr. Chairman, I don't 
know how--since I am new to this Committee, and new to this 
Subcommittee--but perhaps in the future, the Administration's 
representative would be invited to stay so she could hear what 
we are hearing, because it's very wonderful to sound so 
incredibly sanctimonious, but I don't know how much interaction 
she has with the people that are being affected by these--by 
her budgets, and it might be a very good learning experience 
for her, as well as it is for Members of Congress.
    Chairman MCDERMOTT. We will think about that. I am sure 
there are Members of the Administration staff here, listening. 
Mr. Porter?
    Mr. PORTER. Thank you. We find a lot of witnesses like to 
leave as quickly as possible from different hearings on the 
Hill, but thank you, and thank you all for being here.
    I appreciate my colleague's question on what we can do to 
help. Nevada, if you look where we were in 1996, we had 14,620 
families that were receiving some form of cash assistance. In 
2006, that's somewhere around 6,548. I applaud the State of 
Nevada for its hard work in improving. Again, not to just talk 
statistics, these are real families with real challenges.
    When we look at the Nevada budget, it seems to me that we 
have about 20 million unspent dollars from 2005. Is there 
something we can do to help you be able to use those funds in 
Nevada, if these statistics are correct?
    Ms. FORD. Well, I am a little gun-shy to use that--what we 
call the reserve. After September 11th, our caseloads almost 
doubled. We were the most severely adversely affected State in 
the whole country.
    At that time, we had a $22 million reserve. We burned 
through that within about 6 months. I was then cutting 
programs. I was cutting transfers to counties to assist with 
emergency assistance and their child welfare programs, and I 
had to make quite a few cuts.
    So, we want to maintain at least a $20 million reserve at 
any one time, just to handle those contingencies, because we 
are so tied to the economy in Nevada, due to our tourism, that 
any downturn can really increase my rolls, because we are the 
safety net for those people. They do not have bank accounts and 
investments to fall back on. We are their safety net. So, I am 
very reluctant to spend that money.
    Mr. PORTER. That's good. I want to make sure it was for a 
purpose, not because of some bureaucratic problem we have with 
Washington using the funds. So, I appreciate that.
    Ms. FORD. Oh, no. I am very cautious about that money, 
because of what happened after September 11th.
    Mr. PORTER. Also, you mentioned the problem with the 
extending time. My understanding is that we can extend up to 20 
percent of our current caseload beyond 5 years. Is that 
something that we have a problem in Nevada using, or have we 
used that?
    Ms. FORD. Well, I would like to clarify my comments. I am 
not advocating extending the 5-year time limit. I am just 
saying that there is that time limit out there. So, States have 
a built-in incentive to getting people to self-sufficiency, 
without having a work participation rate. We want to get those 
people out there.
    The 20 percent is for disabled, or hard to serve clients, 
that we can put them in and have them go beyond the 5-year time 
limit. They still count in the work participation rate. So, if 
we have 20 percent of our caseload in that kind of area, then 
we have to make the work participation rate with 80 percent of 
our caseload, which means we have to meet about a 64 percent 
work participation rate with the remaining membership of our 
caseload.
    Mr. PORTER. I bring that up because I think it's an area 
that we will look at, because of your comments. We want to make 
sure that you are able to extend that.
    I guess another question I would have, in looking at cash 
assistance to administrative expenses, in the States that are 
here today and in reality, I know each State has its different 
challenges. Nevada is about--almost 50 percent of our cash 
assistance--of cash assistance of $33 million, we have about 
$16 million in administrative expenses. If we look at 
Washington, it's about 17 percent. New York is about 21 
percent, Georgia 16 percent, California is about 16 percent.
    So, I looked at New Mexico, which is a fast-growing State, 
with about $75 million going out in assistance, their 
administrative expenses are about 7 percent. Is it because of 
our massive growth that your administrative expenses are 
higher, or is there something we can do to help you in that 
area?
    Ms. FORD. Well, I am not clear--I would have to study those 
figures, frankly, to be able to respond, because I really--I 
don't know where those numbers came from. We're limited to 15 
percent for admin in the TANF block grants. It may be you're 
counting some of the program expenses, because program is not 
included in the administrative costs, but I would have to study 
those figures to be able to give you----
    Mr. PORTER. I want to make sure they're accurate, and if we 
can help you. This is why I bring them up. So, we can talk 
about that later.
    Ms. FORD. Absolutely, and I will be happy to look into it, 
and see where those figures come from.
    Mr. PORTER. Thank you. I appreciate you being here.
    Chairman MCDERMOTT. I want to thank all the witnesses. I 
want to ask you to do one more thing for me, though. Yesterday, 
the Governor of Washington filed a lawsuit on the whole 
question of the proof of citizenship before children can 
receive Medicaid.
    I would like to have from all of you a response from your 
agency or your agency director or Governor, whatever, as to 
what impact that requirement will have on your ability to 
provide health care for newborns in this country. I think it's 
a serious issue, and I would like to know if my Governor is 
alone in this, or if there are some others who might have some 
interest in it.
    So, we thank you all for coming, and we will perhaps be 
back in touch with some of you again to come another day. Thank 
you.
    [Whereupon, at 1:28 p.m., the hearing was adjourned.]
    [Questions submitted by the Members to the Witnesses 
follow:]

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[GRAPHIC] [TIFF OMITTED] T0306A.004

    [Submissions for the Record follow:]

               Statement of American Payroll Association

    On behalf of the American Payroll Association (APA), we ask you to 
consider the comments below, which are being provided in response to 
the request for public comment issued in the Federal Register on Jan. 
24, 2007 [72 FR 3093].

About the American Payroll Association
    The APA is a nonprofit professional association representing more 
than 22,000 individuals and their companies in the United States and 
Canada. The APA's central mission is to educate its members about best 
practices associated with paying America's workers, including 
compliance with all relevant federal, state, and local laws. As part of 
this mission, the APA works with legislative and executive branches of 
government to find ways for employers to meet their obligations under 
the law and support public policy initiatives, while minimizing 
administrative burden.
    Approximately 70% of all child support is collected through wage 
withholding, amounting to more than $16 billion annually in the United 
States. Payroll professionals are intimately aware of the impact wage 
withholding has, through all levels of society, on the employees who 
pay this support and on the recipients of this support.

$25 Fee to Be Assessed
    The proposed rule, in accordance with the Deficit Reduction Act of 
2005 (DRA 2005), would require that states impose an annual $25 fee 
during each federal government fiscal year on every case in which a 
child support recipient receives at least $500 in support through the 
IV-D system and the recipient has never received assistance under 
Section IV-A (Temporary Aid to Needy Families). The fees would be 
reported by the state IV-D agencies as program income. DRA 2005 
provides four options for the states in imposing the fee:

    1. The state may retain the fee from the support it collects on 
behalf of the recipient.
    2. The state may recover the fee from the individual applying for 
services.
    3. The state may recover the fee from the absent parent.
    4. The state may pay the fee out of its own funds.

    While most states report that they will collect these fees without 
the assistance of employers, the APA is concerned that states seeking 
to recover the fees from certain custodial and noncustodial parents 
will do so through wage withholding not connected to a support order. 
If so, it raises a number of issues that we would like OCSE to clarify.

    1. Child support orders are subject to higher withholding limits 
than creditor garnishments (up to 65% vs. 25% of disposable earnings). 
Various fees that are collected as part of a withholding order enjoy 
the same higher withholding limit. Would an order to collect only the 
fee be subject to this same limit? No doubt, employers receiving such 
orders will come to varying conclusions.
    2. Will the standard Income Withholding Order (which is currently 
being revised) be amended to include a line for the fee?
    3. What priority will the fee have against current support, medical 
support, and arrearages?
    4. Many employers do business in more than one state, and some 30% 
of wage withholding orders cross state lines. To prevent employer 
confusion over whether it should follow the rules of the state issuing 
the order or those of the employee's (noncustodial parent's) primary 
work state with regard to this fee, we would like OCSE to clarify that 
the employer should follow the rules of the state issuing the order. 
This seems to follow the provision of the Uniform Interstate Family 
Support Act that says the employer must follow the rules as stated on 
the order that specify (among other items) the amount of periodic 
payment of fees and costs for a support enforcement agency.

APA Concern Over Lack of Outreach to Employers
    In addition to the confusion that the fee will cause employers, the 
APA is concerned that the fee may actually be detrimental to employers' 
relationships with state child support agencies. We understand that 
certain states will choose to pay the fees themselves because they 
believe that charging fees to support recipients is contrary to their 
mission. These fees cannot be considered operational expenses, which 
means they will be an additional burden on the states' already burdened 
budgets. APA is concerned that employer outreach will suffer as a 
result.
    Even the states that do pass on their fees to their residents 
appear to be facing great expenses to develop computer systems to 
account for the fees, and they will pass on the lion's share of those 
fees to the federal government. In conversations APA has had with child 
support officials, accounting for this fee has been described as ``a 
nightmare.''
    The cuts imposed by the Deficit Reduction Act are likely to tax the 
state child support agencies to such an extent that services to 
employers cannot help but suffer, as states are forced to reduce staff 
yet continue to meet federally imposed levels of service (such as a 90% 
paternity identification). This fee appears to add to that burden 
rather than alleviate it.
    APA and child support agencies at both the state and federal levels 
have spent years developing relationships that have proven mutually 
beneficial and beneficial to society. We are quite committed to 
maintaining this relationship but worry that states will find 
themselves unable to provide employers the level of service to which 
they have been accustomed.
    We appreciate your consideration of the issues we raise and look 
forward to your response. If you have any questions or would like 
clarification on our comments, please contact William Dunn at the 
address below.

                                 

                                           Child Support Officer II
                                                 Commerce, Ca 90040

Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington D.C. 20515

Dear Sir/Madam,

    My name is Shoushan Baghboudarian, I am a Child Support Officer in 
County of Los Angeles, my Department's moto is to ``better the lives of 
the Children of Los Angeles County'', that is exactly what we work for, 
day in and day out, we deal with many cases where we get emotionally 
and physically drained due to the hardships that our case participants 
deal with, we do go that extra mile to reach out to the little ones, to 
make their lives a little better, to give them hope and to show them 
that there is light at the end of the tunnel and to never give up on 
their future.
    Los Angeles County is very short of Child Support Staff as it is, 
we can not afford further cuts in our budget, we are already extremely 
heavy on case loads as it is.
    You must understand the importance of our work, our vital work 
which families benefit from, financially and morally, their self esteem 
is at risk if they have to go to financial assistance programs, their 
dignity will be crushed, as well as their dreams for a better future, 
they are barley making ends meet now, they (Custodial Parents) have 
trusted us to locate and enforce Court orders against the non paying 
parents, these people can not and will not request assistance from the 
Welfare department, which is what will happen if you decide to cut our 
Budget.
    We have been helping our Custodial parents for years, they feel 
proud that they have done good, they have finally become self 
sufficient, they have their jobs and also depend on support checks due 
to financial hardships. The department will not be able to function as 
we have been, if more staff is laid off, we have been successful in 
locating delinquent parents and forcing them to take responsibility to 
support their children, in some cases, we have assisted in exchanging 
mail between non custodial parent, custodial parent and the children, 
we do try to go that extra mile when needed, but if our budget is cut, 
we will be over whelmed, which will result the case participants to 
have no choice but request family assistance as their payments will not 
come in timely manner due to shortage of staff, staff who monitor where 
delinquent parents work or have assets, generate wage garnishments, 
suspend government issues ID's/Passports, etc.
    Our daily function is as important to Los Angeles County Children 
as air is for breathing, these facts might not be as important to some 
who do not have to depend on our departments daily function due to 
comfortable lives that God has blessed them with, but for the regular 
citizen, who's lives will be altered, this is their lifeline, don't cut 
that last string of hope that is left in their hearts, which is exactly 
what will happen if your bill goes through.
    I am urging you to reconsider, and I must insist to all those who 
wrote this unethical bill to take a moment and look at your children, 
it could be your child or someone you know, who might need this 
departments assistance some day.
    I, whole heartedly support legislation that would rescind the 
scheduled cuts to the department that I work so hard for, in the 
Deficit Reduction Act.
    My Special thanks to Chairman McDermott and Senator Rockefeller for 
all of their efforts. God Bless you.
    Thank you for your time,

            Sincerely,

                                             Shoushan Baghboudarian

                                 

                       Statement of RaeLynn Block

    Further budget cuts would result in further reduction of an already 
understaffed Los Angeles county child support agency. The staff is 
already overwhelmed and working at a pace that is exhausting and almost 
unmanageable. Due to this continual pace the people who are suffering 
most are the clients were are supposed to serve. Staff is unable to 
provide the sufficient time and attention to each specific case/client 
that is truly deserved to service them best. Staff are carrying entire 
workloads by themselves when to truly and efficiently work them the 
load should be split between two to three people or more, but due to 
shortage of workers one person must find the time to handle the entire 
workload.
    The enforcement of child support and health insurance orders are 
vital to the children and families that this agency serves. There are 
families struggling to keep afloat on one income and stay off of the 
welfare system and without our office collecting their child support 
that is exactly where they would end up. Children deserve the right to 
grow up in a home that is above the lowest of poverty levels and know 
that they will not struggle to make ends meet. This agency helps reduce 
the stress that a single parent feels not knowing if they will be able 
to pay their bills month to month by knowing that their child support 
will be coming in. Obviously not all parents pay their support like 
they should but if they did then there wouldn't be a need for the 
services our agency provides.
    Our office has the means to locate non-custodial parents and their 
income to obtain the needed child support orders and subsequently 
enforce the collection of those debts. Our office has a client whose 
daughter is extremely ill and in and out of the hospital on a frequent 
basis. The father of that child has not paid support since the baby was 
born and she is now 3yrs old and the mother is not receiving public 
assistance. The mother works when she can but is unable to do so for 
the most part as the child requires full time attention. The non-
custodial parent owns his own business and resides in a very expensive 
home. Our office was able to get a substantial child support order for 
the mother and set an arrears amount. The non-custodial parent is now 
paying his support regularly and made a lump sum payment to pay off his 
back-owed arrears of which the custodial parent received a large which 
she greatly needed.
    The children and families of Los Angeles County depend on the 
services our agency provides, as it may be the only chance they ever 
have of receiving any kind of support. Parents want to provide for 
their children and live a life that will make them proud and lead the 
children to a productive life as an adult. By reducing the budget and 
making further cuts to the child support enforcement agencies you would 
be reducing the efforts the staff will be able to make in collecting 
support for these families. This would have a negative affect on their 
life and possibly end up with them having to apply for and receive 
public assistance to make ends meet. The welfare system was put in 
place to help people who needed a hand up when they were down on their 
luck, but it seems grossly inappropriate for people to be ``down on 
their luck'' due to the fact that their government won't fund the 
needed agencies to help them. It doesn't seem that the answer to the 
question `` Why did you apply for welfare?'' should be `` Because the 
child support office doesn't have enough staff to collect my child 
support.''
    We support legislation that would rescind the schedule cuts to 
Child Support in the Deficit Reduction Act and thank both Chairman 
McDermott and Senator Rockefeller for their efforts.
                                 

                         American Association of Community Colleges
                                                     March 20, 2007

The Honorable Jim McDermott, Chairman
Subcommittee on Income Security and Family Support
Ways and Means Committee
U.S. House of Representatives
Washington, DC 20515

Dear Chairman McDermott:

    On behalf of the American Association of Community Colleges (AACC) 
and the 1,202 community colleges it represents, I am writing to share 
our concerns about proposed regulatory changes for the Temporary 
Assistance for Needy Families (TANF) program, pursuant to the 
subcommittee hearing on March 6, 2007. Community colleges are deeply 
involved in providing education and job training as well as other 
services to individuals receiving TANF assistance. Community colleges 
can do much to help these individuals not only to secure jobs but to 
become economically self-sufficient. Therefore, we appreciate this 
opportunity to provide comments on these important rules.
    Policies limiting access to postsecondary education and training 
are counter-productive since there is a strong, positive correlation 
between educational attainment and income. According to the Bureau of 
Labor Statistics, in 2004 the average holder of an associate degree 
earned $6,983 more annually than did a high school graduate. This fact 
should be reflected in TANF policy.
    AACC recognizes that the Deficit Reduction Act of 2005 (DRA) 
imposes new requirements on the Temporary Assistance for Needy Families 
(TANF) program. Our comments below are focused on the interim final 
rule published in June, 2006, and how that rule and the pending final 
regulations will impact postsecondary students.
    The interim final rule promulgated by the Department of Health and 
Human Services imposes unacceptable new requirements on providers of 
vocational education and job training. It requires that vocational 
education be ``supervised on an ongoing basis,'' no less frequently 
than daily. Most individuals enrolled in vocational education courses 
are not attending classes every day nor are many courses even offered 
every day.
    If HHS intends to require that attendance be taken everyday on 
every vocational education course that a college offers, it would be 
imposing a major new regulatory burden on institutions that will not 
provide commensurate gains. Colleges currently monitor students to 
ensure that they are making ``satisfactory progress'' in their programs 
in accordance with the regulations established pursuant to the Higher 
Education Act. Since community colleges do not single out TANF 
recipients who enroll in classes, this new provision would force our 
faculty and staff to take the time before each class to take attendance 
on every student, whether or not any of the students were currently 
receiving TANF funds. Community colleges enroll more than eleven 
million students annually. Thus, this would translate to an extremely 
costly new requirement for the colleges. Surely the regulations 
promulgated by the Department of Education that govern the federal 
student assistance programs should be sufficient to ensure careful 
oversight and responsible monitoring of students by the colleges 
without imposing another cumbersome layer of reporting requirements.
    Currently, many students enrolled in postsecondary education 
certificate and degree programs take a combination of classroom and 
distance education courses. Some courses utilize both classroom and 
online instruction. Based on preliminary information, AACC is concerned 
that some states may interpret the new HHS regulations so narrowly that 
they may refuse to accept online instruction courses (or portions of 
courses) as countable toward the participation requirements, and that a 
significant percentage of recipients could therefore lose their 
eligibility. The Department of Health and Human Services should be 
directed to clarify the regulations to explicitly include online 
vocational education courses as countable activities.
    The preamble to the interim final regulations specifically 
prohibits counting as ``work'' any time spent in preparation for 
vocational education classes. Preparation time is indispensable in 
order for a student to progress successfully through a college program. 
Although the regulation allows for counting monitored study sessions, 
this approach is impractical since it would entail significant 
additional institutional costs and would involve substantially 
increased child care costs for most TANF participants.
    This approach to micromanaging study time stands in stark and 
disappointing contrast to the federal student aid program regulations. 
Under the latter regulations, undergraduate students who are taking as 
few as 12 credit hours per semester are deemed to be ``full time'' 
students for purposes of calculating eligibility for student financial 
assistance, including Pell Grants, Federal Work-Study, and student 
loans. This reflects the widely accepted standard that for every hour 
of class time, a student is expected to spend at least two hours 
preparing. Preparation time is essential for vocational education 
students and we urge HHS to reconsider this policy to allow for at 
least one hour of preparation for every hour spent in class. In light 
of the fact that virtually all TANF recipients engaging in 
postsecondary education are working and raising children at the same 
time, this proposal to count at least one hour of preparation time as 
an allowable activity is a reasonable compromise.
    AACC supports the expansion of opportunities for adult basic 
education to help individuals acquire the necessary prerequisites to 
successfully matriculate in and complete vocational education programs. 
While the interim final rule for TANF recognizes the need for basic 
skills education, it limits its inclusion as an eligible work activity 
to ``temporary'' instances. More flexibility should be permitted to 
allow concurrent or consecutive enrollment in vocational education and 
basic skills education classes. Similarly, the interim final rule omits 
English Language Learners (formerly, English as a Second Language) 
programs from the definition of ``vocational education.'' English 
language classes, like adult basic education, are an integral part of, 
or precursor to, many vocational education programs. It would be 
helpful if TANF recipients were able to access these programs in 
advance of enrolling in more targeted vocational education programs. 
The same standards could be used for determining eligibility for these 
programs--the institution could certify that the English Language 
Learners (ELL) or adult basic education classes were necessary for the 
TANF recipient to complete a vocational education program.
    The timing of the new regulations poses a particular challenge for 
community colleges. It is our understanding that HHS intends to publish 
final regulations this summer and that the regulations will become 
effective October 1, 2007. Implementation of any significant computer 
systems modifications by the colleges, whether to collect additional 
attendance records or other reports, would require months of systems 
development and beta testing before they could become operational. And, 
systems changes required during an academic year, in contrast to t the 
beginning of a new academic year, are particularly disruptive and 
costly. Given the timing and the enormity of the task, colleges will 
struggle to be in compliance with this requirement, and unfortunately, 
it may result in denying access to critical vocational education 
programs for a large number of TANF recipients.
    Thank you for your attention to our comments on the TANF rules. If 
you have any questions about them, please contact David Baime, VP of 
Government Relations; or Laurie Quarles, Legislative Associate.

            Sincerely,

                                                    George R. Boggs
                                                  President and CEO

                                 

                    Statement of Vera Borsa-Valadez

    It is known, if Congress cut the budget for the Departments in 
Child Support Service, the workload for officers and workers will 
increase tremendously, which is already extremely intense. Los Angeles 
County Call Center, for example, receives an average of 3,500 calls per 
day, and cutting the budget will compromise the quality of the costumer 
service and put a big burden to workers that already are under huge 
pressure.
    It is important that all levels of society understand that the 
Departments in Child Support Service help to lift children out of 
poverty and make available health care to them. Through the Departments 
in Child Support Service non custodian parents as pressed to provide 
support to their children and this can make all difference in a child's 
life and its family. Our work provides financial benefits for families 
that are already suffering from low income. Families depend completely 
on child support from a free service agency to put food on their table.
    Departments in Child Support Service are exceptionally important 
tools to locate non custodian parents, delinquent parents and forcing 
them to provide support to their children. It is astonishing the number 
of non custodian parents that simply deny the right of their own 
children to have a dignified life. They refuse to pay any support and 
make it very hard for custodian parties to receive any aid.
    It is a very rewarding job. I am very proud to work for such 
important department, which makes a difference in a child's life. 
Countless times custodian parties express their gratitude for the 
services received from our Department. Many times they wait for their 
support with extreme anxiety as this will be the single monies that the 
family will collect that month.
    It is not fair, that children in California, have to suffer and 
have their lives compromised with an unfair cut on the budget. 
Californians deserve a free service for Child Support, especially in 
low income families.
    I support the legislation that would repeal the scheduled cuts to 
Child Support in Deficit Reduction Act, and I thank Chairman McDermott 
and Senator Rockefeller for their efforts to keep Child Support 
Services Departments working for low income families.

                                 

                        Statement of Li-Wen Chen

    Our work enrichs children's life and helps them get out of poverty. 
Our work also provides the healthcare they would not otherwise receive.
    The budget cuts will increase our workload. Our office stops hiring 
temporary clerk this year. Our team with 11 case workers only has one 
clerical. If we don't have enough staff to work on our cases, it will 
directly affect their life, their health, and their education.
    We need more budget to do better job for our children.

                                 

Statement of Buncombe County Department of Social Services, Asheville, 
                                   NC

    The Deficit Reduction Act of 2005 (P.L. 109-171) included a 
reduction in federal funding for child support enforcement 
administration that will adversely affect child support collections, 
increase the nation's welfare burdens, and undermine one of the most 
effective federal/state programs. The mechanism for the cut is to deny 
States the option of matching federal administrative funds with federal 
incentive funds they have received as a reward for effective 
performance. This change reduces total administrative funding for child 
support by an estimated 15 percent across the next five years. On 
behalf of the Buncombe County Department of Social Services in 
Asheville, NC, we urge the Congress to reverse or substantially 
mitigate this funding reduction to avert the adverse effects of these 
cuts on custodial parents and their children in all parts of the 
nation.
    Here are our major concerns about the impact of these cuts.
    1. Reduced child support collections across the nation. The federal 
cuts are deep, and they will result in a major reduction in child 
support collections relative to what would have been collected 
otherwise.
    2.  Harm well-being of children. Reducing federal funding for child 
support will have a direct and adverse impact on the economic and 
social well-being of millions of dependent children. A growing body of 
research has documented the positive effects of child support payments 
on child well-being. Children in families that receive child support 
have better academic achievement, drop out of school less, have higher 
levels of emotional health, and are less likely to engage in delinquent 
activities. Moreover, non-custodial parents that regularly pay child 
support are more likely to remain actively and responsibly involved in 
their children's lives.
    3.  Increase welfare dependency. Based on the most credible 
research, the $4.8 billion in five-year federal savings from the cuts 
will be offset by $1.67 billion in higher costs for the Medicaid, TANF, 
Food Stamps, SSI, and Public Housing Programs (Urban Institute, 2004). 
These higher welfare costs would negate more than a third of the 
apparent value of eliminating the administrative match for incentives.
    4.  Undermine child support program improvement. Much of the steady 
improvement obtained in the child support program has resulted directly 
from the uniform federal performance standards and the substantial 
financial incentives provided to states. Eliminating the incentive 
match will reduce these financial incentives by two-thirds. This will 
greatly weaken a powerful mechanism for program improvement.
    5.  Severely affect locally funded programs. The cuts will have a 
significant impact on our local county Child Support Program funding. 
We leverage incentive funds against administrative matching funds, 
which then together provide the bulk of our program funding. While, on 
average, elimination of the incentive match will reduce total federal/
state/local child support program funds by an estimated 15 percent, 
this significantly under-states the impact on local funding in many 
states. If we are unable to secure local funding to make up for the 
anticipated federal cut, our program performance will be severely 
compromised.
    6.  Interfere with effective pursuit of interstate child support 
cases. If the DRA cuts are allowed to stand, enforcement of interstate 
obligations will be impaired, along with enforcement of obligations 
where both parents reside in the same state. Indeed, because some 
jurisdictions afford lower priority to interstate cases when their 
administrative resources are inadequate, it seems likely that 
enforcement of interstate cases may suffer disproportionately if the 
DRA cut is not reversed.
    For these reasons, we hope that Congress will act to reverse these 
cuts so that the sustained record of improved child support performance 
can be continued. This would avoid the potential for significant harm 
to the large number of our nation's children whose economic and 
emotional support may otherwise be disrupted by non-marriage, 
separation, or divorce.

                                 

                     Domestic Relations Association of Pennsylvania
                                                      March 6, 2007

Representative Phil English
United States House of Representaitives
2332 Rayburn HOB
Washington, DC 20515

Dear Sir/Madam:

    I write this letter in my capacity as president of the Domestic 
Relations Association of Pennsylvania and on behalf of the nearly 3000 
child support professionals in the Commonwealth of Pennsylvania. It is 
written in the hope that Congress will reconsider and reinstate the 
funding cuts imposed by the Deficit Reduction Act (DRA) if 2005 on the 
nation's child support enforcement program.
    In March 2004 Dr. Sherri Heller, then Commissioner of Office of 
Child Support Enforcement, praised both the efficiency and the 
effectiveness of this program. Again in 2006 the federal budget cited 
the child support enforcement program as ``one of the highest rated 
block/formula grants of all reviewed programs government wide''. In 
Pennsylvania nearly seven dollars in support is collected for every 
federal dollar spent on the program. It strikes me as odd that Congress 
would choose to endanger a program whose effectiveness and cost 
efficiency has been proven over time and whose work impacts the most 
needy of its constituents, our children.
    As I am sure you are aware Pennsylvania's Child Support program, 
based on performance measures initiated by HHS, is one of the highest 
performing states in the nation and certainly is the highest performing 
of the so-called ``Big8'' states. Child support enforcement in 
Pennsylvania is a county run, state administered program. That is to 
say the greatest impact of the proposed DRA reductions will be felt at 
that county level by those workers who provide direct services to our 
clients.
    Because the child support enforcement programs are run by 67 
different counties it is extremely difficult to quantify the impact of 
these reductions. The economic impact of the DRA in Pennsylvania has 
been estimated to be between $18 million--$54 million dollars most of 
which will be seen at the local level and which will definitely have a 
negative impact on our ability to maintain staff and our level of 
service. These cuts come at a particularly critical time as we work to 
fulfill the federal mandate to broaden our focus to the provision of 
medical coverage and medical support for our clientele.
    Accordingly, I would respectfully request your consideration in 
this matter and reinstatement of funding to the child support 
enforcement program.

            Sincerely,

                                          Larry R. Wolfe, President
                     Domestic Relations Association of Pennsylvania
                                 

                      Statement of Brenda Gilreath

    Thank you for the opportunity to submit testimony on the impact to 
programs assisting low-income families as a result of changes made by 
the Deficit Reduction Act. My name is Brenda Gilreath and I am the 
Deputy Director of the Child Support Program in Clermont County, Ohio. 
Clermont County's population is estimated to be around 194,410. During 
Federal Fiscal Year 2006 this office served 42,663 individuals (27,704 
adults and 14,959 children) associated with a caseload of 13,500 which 
is considered to be a medium caseload size in the State of Ohio. It is 
important to note that within our 13,500 cases we are not only 
responsible for establishment and enforcement of child support orders, 
we administer medical insurance orders on 10,500 cases. Our Child 
Support Program has received national and state recognition for 
innovation and effectiveness. The National Child Support Enforcement 
Association (NCSEA) has honored our program with Most Improved Program, 
Outstanding Program, and Program Awareness Excellence Awards. In 
addition, our program has been recognized by our state office and by 
various associations with performance awards for best practices, 
innovation and program awareness. We are proud of our overall 
accomplishments and the purpose of this program which benefits children 
and society while reducing costs associated with public assistance 
programs. The following County information is submitted:

Calendar Year 2006




Child Support Collections                                 $36,601,225.38
Tax Intercept Collections                                  $1,447,868.78
Criminal Non Support Collections                           $1,079,528.72
Lump Sum Intercepts                                          $138,108.13
Drivers License Reinstatement Collections                    $308,463.07



Federal Fiscal Year 2006




Reimbursement to Public Assistance                           $370,194.18
Collections on Former Assistance Cases                     $6,432,430.57
IVE Collections (Children Services)                          $111,162.44
Former IVE                                                    $46,447.55
Medicaid Assistance                                        $2,486,752.75
Never Assistance Cases                                    $23,962,008.64



    My testimony revolves around the impact of our ability to use 
performance incentives as local match. The impact is as follows:

    For Federal Fiscal Year 06 Clermont County earned $508,948 in 
performance incentives. Elimination of the federal match states receive 
on reinvestment of incentive payments in the program equates to a 
$987,958 loss in our spending authority. As of October 2006, our 
expenditures were exceeding our revenue. Since 2002, we have not filled 
11 positions on our table of organization. Three of these positions 
have not been filled since October. The reason behind the overspending 
is a result of many years of stagnant funding coupled with increases in 
employee benefits including pay raises. Our program was already hurting 
financially prior to these cuts but we were dealing with it. The DRA 
cuts which equate to approximately of 20% of our revenue will result in 
drastic and devastating changes to our operations. The only way we will 
be able to balance our budget will be through staff reductions which 
will impact our performance and unravel a successful program that took 
many years to establish.
    I wish to take the opportunity to highlight some of our successes 
and ask that you take into account that these achievements are at risk 
due to the DRA cuts.
    A local partnership between Child Support Enforcement, the 
Prosecutors Office and the Court of Common Pleas was established in 
1989 for the purpose of criminal prosecution for non support of 
dependents. Statistical tracking was developed in 1996 which reflects 
160 criminal cases and annual collections of $188,469.14 for that year. 
As of December 2006 month end our County has 488 criminal non support 
cases assigned to two community control officers who work solely on 
these criminal cases. Our collections in 2006 totaled $1,079,528.72. 
Efforts to enforce these child support orders through the civil 
judicial process and/or through the administrative remedies available 
through the child support program all failed until such time as these 
cases were pursued for criminal non support of dependents. These 
families would not have received these collections without this 
collaboration.
    Several years ago, Clermont County Child Support Enforcement and 
Juvenile Court established workflows which enabled immediate 
establishment and enforcement of Children Services IVE Caretaker cases. 
Clermont County is unique in Ohio and likely nationally on the 
administration of these difficult cases. Child Support attorneys attend 
all neglect, dependency and unruly hearings to provide testimony and to 
obtain immediate orders. For Federal Fiscal Year 06, Clermont County 
Ranked 3rd in the State of Ohio on IVE collections providing 
reimbursement for children removed from the physical custody of their 
parent (s) thereby reducing child placement costs for the state of 
Ohio. At present, the financial benefit to Clermont County as a result 
of exceptional IVE collections is unknown. IVE costs are unquestionably 
reduced by the offset of the collections but these collections are 
disbursed to the State of Ohio and thereby reduce State costs; not 
local costs. This collaborative effort involving Child Support 
Enforcement, Children's Protective Services and Juvenile Court has been 
recognized as a model collaboration.
    Each year Clermont County sponsors a child support amnesty and a 
Most Wanted Roundup Campaign. During 2006, $69,281.19 was collected on 
Amnesty and $86,326.40 was collected on the Most Wanted Roundup. For 
those cases granted amnesty the agency saves in costs associated with 
pursuing enforcement. Both of these non mandated initiatives are at 
stake.
    In July of 2002, Clermont County Child Support Enforcement 
implemented a Career Opportunities Program, currently funded with TANF, 
to provide services to individuals who are unemployed or under employed 
and who were in contempt for failure to pay their child support. During 
civil contempt proceedings, individuals unemployed or underemployed are 
Court ordered to this program. Since inception, the program averages 
750 Court ordered referrals per year with annual collections exceeding 
1 million dollars. This program is non mandated and is jeopardized by 
the Deficit Reduction Act.
    To summarize my testimony, I have supplied statistical information 
for a medium size county; one which has been recognized for innovation 
and effectiveness; I have referenced only a few of our successes; and I 
will now expand further upon the impact of these cuts to our program. 
If the cuts to the child support program with the DRA become reality, 
we are looking at reducing staff and eliminating all non mandated 
activity. This will result in a bare bones operation. If these cuts 
become reality, we will experience reduced collections which will 
result in a reduction in reimbursement of Medicaid, TANF, and IVE Child 
Welfare. These cuts could increase costs for Medicaid, food stamps, day 
care, home heating subsidies and Temporary Assistance for Needy 
Families.
    Reduced collections--this is money right out of the budgets of 
families who need the child support owed to them to meet their 
children's needs. The child support program ensures that both parents 
support their children--so that taxpayers do not need to.
    The Child Support Program is one of the only federal programs that 
actually generates income and mandates personal responsibility. In the 
President's 2006 Budget, the child support program is cited as ``one of 
the highest rated block/formula grants of all reviewed programs 
government-wide.'' The child support program is a cost avoidance and 
cost recovery program. An effective child support program recovers 
public money and provides services which reduce reliance on other 
public dollars.
    The child support program is administered differently throughout 
the nation and the impact of the DRA varies among states and 
specifically among counties such as Clermont that are responsible for 
delivering the services to our customers.
    Ohio's child support program plays a key role in the lives of over 
one million families. In fact, our program is the second largest public 
program in Ohio. Only public education serves more children and 
families.
    Chairman McDermott and Subcommittee members--I urge you to take 
action now to repeal the cuts to the Child Support Program. The 
children we serve deserve the financial and medical support they are 
entitled to.
                                 

                                    Goodwill/Easter Seals Minnesota
                                          St. Paul, Minnesota 55104
                                                     March 19, 2007

Congressman Jim McDermott,
Chair Subcommittee on Income Security & Family Support
U.S. House of Representatives
1102 Longworth House Office Building
Washington D.C. 20515

Dear Congressman McDermott,

    I write to you today on behalf of Goodwill/Easter Seals Minnesota 
in strong support of your efforts to re-examine the Deficit Reduction 
Act of 2005 (DRA) and the detrimental effects it will have on low-
income families across the nation.
    Goodwill/Easter Seals Minnesota serves thousands of low-income 
people every year who are struggling to make ends meet and keep their 
families afloat financially. We work with families who are on the 
Temporary Assistance for Needy Families (TANF) program as well as 
families impacted by the collection of child support.
    Our FATHER Project assists young, inner-city dads in overcoming the 
barriers that prevent them from supporting their children, economically 
and emotionally. We have worked closely with Hennepin County Child 
Enforcement staff to form a creative partnership that helps these young 
fathers establish paternity, address child support payment issues, and 
become better providers for their children. The modification of the DRA 
to prohibit States from receiving federal matching payments for 
incentives earned will have serious repercussions for counties 
throughout our state but especially our largest, Hennepin County, which 
includes the city of Minneapolis. The result will mean a $4.3 million 
loss in federal funding to Hennepin County in the coming year which 
will mean a severely diminished capacity to continue innovative 
programming at such locations as the FATHER Project in Minneapolis. In 
addition, the revenue lost from decreased child support collections 
will negatively impact children and will increase the reliance of 
families on other federal programs such as Medicaid, TANF, and Food 
Stamps.
    Goodwill/Easter Seals also has serious reservations regarding the 
changes to TANF and the new rules which restrict States from counting 
certain activities, such as education and training, toward work 
participation requirements. As a provider of employment training 
services, we know that training and education are important components 
of helping to not only place people into jobs, but help raise them out 
of poverty.
    I encourage you to look at these two components of the DRA and 
consider making changes that will help, rather than hurt, our most 
vulnerable families.

            Sincerely,

                                                Michael Wirth-Davis
                                                    President & CEO

                                 

                                             Wisconsin, Legislature
                                                  Madison, WI 53707
                                                      March 5, 2007

Hon. Congressman Jim McDermott, Chairman
Subcommittee on Income Security and Family Support
Committee on Ways and Means
1035 Longworth HOB
Washington DC, 20515

Dear Representative McDermott,

    Thank you for holding a hearing today to understand the impact of 
the Deficit Reduction Act of 2005 (DRA) on child support enforcement 
programs throughout the country.
    Wisconsin's share of child support enforcement allocations from the 
federal incentive payments and matching funds for 2006 was $38,225,900. 
As a result of DRA, Wisconsin stands to lose nearly $6.4 million in 
2007 and over $25 million in 2008. The Wisconsin Department of 
Workforce Development estimates reductions in over $143 million in 
Wisconsin over the next 5 years as a result of these cuts.
    These cuts would be devastating to families across Wisconsin. 
County Child Support agencies throughout the state are instrumental in 
establishing paternity and in ensuring that those parents are 
responsible for their children. Without the dedicated men and women who 
work in these agencies, families will go without economic support, 
children will go without health care and demand for public assistance 
dollars will skyrocket. The services performed and the money collected 
for child support are invaluable to the health and stabilization of 
Wisconsin's families.
    We ask the committee to consider repealing the portion of DRA that 
cuts child support enforcement dollars to the states. Thank you for 
your consideration.

            Sincerely,

                                                        Dave Hansen

                                 

               Statement of Lawrence Hill, Los Angeles,CA

    The Budget Reduction Act would create stress and pressure for 
families already on the poverty boarder line to make ends meet in food, 
clothing and health care. Many families would be forced to receive some 
kind of government subsidy such as welfare, food stamps and medical 
coverage.
    The funding cuts for the Child support program from the DRA would 
force the layoffs of many workers.
    The funding cuts from the DRA would create an already unmanageable 
caseload for the employees remaining.
    Los Angeles County child support program would suffer tremendously 
since it is now under funded and caseloads are unmanageable as 
documented in its collection rate. Enforcing and collecting child 
support from Non Custodial parents who earn a living in an under ground 
economy would become non-existent.
    I support legislation that would rescind the scheduled cuts to 
Child Support in the Deficit Reduction act and thank Chairman McDermott 
and Senator Rockefeller for their efforts

                                 

   Statement of Illinois Department of Healthcare and Family Services

    I am pleased to present this testimony in support of H.R. 1386 on 
behalf of the State of Illinois' Department of Healthcare and Family 
Services.
    Recent Congressional legislation has resulted in a dramatic impact 
on the functioning of the child support program, with some key changes 
adversely affecting low-income families. The State of Illinois supports 
House Bill 1386, The Child Support Protection Act of 2007, restoring 
lost funding for a universally-acclaimed, cost-effective program that 
indisputably keeps thousands of families from slipping into greater 
poverty. We believe it is crucial for Congress to repeal the three 
child-support funding provisions of the Deficit Reduction Act of 2005 
(DRA) in order to maintain the program's unparalleled success as a key 
poverty-fighting program.
    Congress' 2006 passage of the DRA provided important new tools to 
assist state and local government agencies improve their collection 
rate, such as lowering the passport denial threshold, adding tax 
offsets for older children, simplifying distribution of support, and 
expanding medical support options. However, three funding provisions in 
DRA unmistakably undercut the IV-D program, offsetting much of the 
recent gains made by the child support agencies in the country:

      Disallowing the match of state-earned incentive dollars 
with Federal Financial Participation (FFP) undercut a covenant between 
the federal government and states to promote efficiency and success.
      Imposing a $25 fee for never-TANF cases in which annual 
collections are $500 or greater created added difficulty for many 
parents living on the cusp of poverty and is requiring costly systems 
changes and added bureaucracy.
      Reducing the genetic testing FFP for parentage testing 
from 90% to 66% sent the wrong message to families and states that 
parentage determination was not a top priority, and further financially 
burdened states reeling from the incentive-match loss.

Loss of Incentive Match

    The Congressional Budget Office (CBO) estimated that the DRA 
incentive match loss alone would reduce families' income dependent on 
child support by $8.4 billion over 10 years. The CBO estimate assumes 
state legislatures and county governments will make up half of the lost 
federal funds, which was overly optimistic for Illinois, as for other 
states. With few states currently reporting legislative initiatives to 
replace all or most of the $937 million in lost FFY08 funding, the 
actual loss to families over ten years may be much more than the $8.4 
billion that CBO forecast if one forecasts $4.58 collected for each 
dollar spent on the child support program, based on the average cost-
effectiveness ratio found in FY05 preliminary data from the Federal 
Office of Child Support Enforcement.
    When Congress passed the Child Support Performance and Incentive 
Act of 1998 (CSPIA), Congress replaced an incentive program that 
emphasized TANF recovery by capping non-TANF collection incentives with 
a program that rewards efficient, results-oriented IV-D program 
efforts. Between the incentive and its match, about one in four dollars 
from all funding sources originate in the incentive performance. The 
match alone constitutes about one of six program dollars. CSPIA has led 
to remarkable improvements in performance as states compete for their 
fair share of the incentive pie.
    In Illinois alone, the CSPIA has contributed to dramatically 
increased performance. With comparative data available on outcome 
measures and matchable incentive funding based on performance, 
Illinois' collections for IV-D families has grown from $393 million in 
federal fiscal year 2000 to $702 million in federal fiscal year 2006. 
During the same time period, cost effectiveness improved from $2.28 to 
$3.84. For Illinois' 601,908 families served by the child support 
program, these performance improvements directly contribute to economic 
security and self-sufficiency.
    By imposing such drastic and draconian cuts on the child support 
program, IV-D programs will not provide the level of child support 
services poor and near-poor parents and children deserve. The cuts mean 
a rollback in everyday services, and fewer dollars available for 
initiatives involving automation improvements, hard-to-collect cases 
and cases with large arrearages, customer service and employer 
outreach. The negative impact could possibly extend to the millions of 
employers who interact with the child support program and 17.2 million 
children who live apart from their non-custodial parent.
    Today, over 60,000 child support professionals assist families. The 
DRA cut in federal support by disallowing the incentive match will very 
likely lead to a dramatic down-sizing of the workforce, which will 
result in much higher caseloads per worker and fewer tough cases being 
worked successfully. Illinois is not contemplating a workforce 
reduction, but will be affected by workforce reductions in other 
states. States must work together to establish and enforce support 
across state borders. The DRA cut not only diminishes the potential for 
collections for each state, but diminishes potential collections across 
state lines for interstate cases.

Imposing the $25 Fee

    The imposition of the $25 fee on families who have never received 
TANF benefits and who receive $5 00 or more in collections in a year 
may result in hardship for many of the persons the program is currently 
designed to help, the near-poor who need the program's support to 
maintain independence from means-tested programs. As custodial parents 
will likely bear the cost of the fee in most states, many borderline-
poor parents trying to stay afloat will have to manage without some 
necessities to pay a fee minimal in fiscal impact to the federal 
government but much larger in impact to the affected parent.
    State IV-D programs will have to spend considerable sums developing 
plans to impose the fee, explaining the fee to parents and making 
adjustments to their systems, as the impact of the fee ripples through 
the distribution algorithms that support the disbursement technology. 
The cost of this change and its associated questionable policy 
implications make the $25 fee a poor mandate on states.

Reducing the Genetic Testing FFP

    By reducing the genetic testing FFP from 90% to 66%, Congress is 
downgrading the priority status of efforts to provide legally-
recognized fathers for children born out-of-wedlock. About 1.5 million 
children or 37% of live births in 2005 were born to parents not married 
to one another. Genetic testing is the key evidence to provide legal 
fatherhood status for an alleged or putative father, introducing a 
formal relationship between parent and child that will last a lifetime, 
including rights and responsibilities. To promote family stability, 
permanent two-parent contributions to the life of a child, and 
certainty regarding relationships and duties, Congress should repeal 
the reduction in FFP for genetic testing.

Unprecedented Unanimity in the Child Support Community

    The DRA's IV-D changes and subsequent legislative efforts to repeal 
the DRA's provisions that hurt families have united the child support 
community as never before. The State of Illinois is united with 
representatives of national, regional, state and tribal child support 
associations in support of H.R. 1386's repeal of the incentive-match 
disallowance, and the repeal of the $25 fee and genetic testing FFP 
reduction as well. We strongly believe that to prevent major disruption 
in collection efforts and to keep families out of poverty, Congress 
needs to make these changes.

                                 

             Statement of Gregg Keesling, Indianapolis, IN

    I am writing to ask that Congress restore the child support funding 
cut by the Deficit Reduction Act in 2006.
    These cuts will negatively impact the ability of child support 
programs to work with low income fathers and undermine the progress of 
the last few years.
    In my work with formally incarcerated low-income fathers it has 
become quite apparent that many non-custodial parents require 
significant assistance. It is very difficult in my state to find work 
with a felony record. A recent Indiana University Purdue University 
Indianapolis study found that 70% of all jobs were cut off to felons, 
some jobs through legislation, others because of liability concerns. If 
we expect parents to support their children, they should at least have 
a fighting chance of obtaining work.
    Child support funding helps play an important role in assisting 
these parents to find work in the dwindling job market for felons. It 
should be noted more than 55% of all those incarcerated in the United 
States also have minor children under 18. Some 10 million children will 
have a parent incarcerated in their formative years.
    In the State of Indiana, our Supreme Court has recently handed down 
a far reaching decision related to how child support is imputed during 
incarceration. The court opined that ``the child support system is not 
meant to serve a punitive purpose. Rather, the system is an economic 
one, designed to measure the relative contribution each parent should 
make--and is capable of making--to share fairly the economic burdens of 
child rearing.'' The full Indiana Supreme Court decision is available 
at http://www.in.gov/judiciary/opinions/pdf/02220701rts.pdf
    In order to administer a child support system effectively and 
fairly, it requires resources without which, systems often become 
ineffectual and punitive. When parents are connected to work and 
family, they are less likely to return to prison. Child support 
policies should support legitimate employment, strengthen parental 
ties, increase the reliability of payments and reduce recidivism. The 
challenge of policy makers is to find solutions that are efficient, 
balance the equities and policies that reinforce the message that 
parents are responsible for their children--but that also deal with the 
reality of poor men's lives and the critical importance of bringing 
them out of the underground economy, into civil society and to keep 
them out of prison.
    I am aware that both Senators Richard Lugar and Evan Bayh support 
restoration of child support funding. Senator Lugar informed me in a 
letter dated November 8, 2005 that he voted to support a Sense of the 
Senate resolution in opposition to cuts in the child support matching 
funds program.
    In the final analysis poor child support enforcement policy and 
policy implementation hurts children and families. Further it hurts 
taxpayers. In Indiana it costs over $25,000 per year to incarcerate an 
individual. Spending a little to help a parent secure a job and manage 
their child support obligations is a better use of taxpayer dollars 
than incarceration.

                                 

                       Statement of Ann Kochakji

    The Child Support Program provides a vital service in Los Angeles 
County that families depend on. Without adequate funding, we will be 
unable to continue aggressively collecting child support from parents, 
many of whom are well able to support their children but prefer to pass 
their responsibility on to their partner or the rest of society.
    Unfortunately, the honor system will not work with many of these 
parents and the families and ultimately the children bear the brunt of 
thousands of dollars uncollected support.
    Since our children are our greatest investment, funding for child 
support should be a priority and we urge you to consider this when you 
cast your vote.
    We support legislation, which would rescind the scheduled cuts to 
child support in the Deficit Reduction Act and thank Chairman McDermott 
and Senator Rockefeller for their efforts.

                                 

   Statement of Los Angeles County Child Support Services Department

                            (To Be Provided)

                                 
       Statement of Marathon County Department of Social Services

    I am submitting this letter on behalf of the Marathon County 
Department of Social Services and the Marathon County Social Services 
Board, on the adverse effects the DRA cuts will have on residents of 
Marathon County.
    The Deficit Reduction Act of 2005 (DRA) (P.L.109-171) includes a 
number of significant changes to programs serving low-income families, 
especially TANF and child support enforcement. The DRA also modifies 
federal funding for various aspects of the child support enforcement 
program.
    The impact of the DRA's elimination of Federal incentive match is 
listed below:
National Level:
    The Congressional Budget Office estimates that child support 
collections will decrease by $8.4 billion over the next ten years.
    More than 17 million children participate in the child support. 
Fewer children will receive child support from their non-custodial 
parents as state and local governments reduce staff.
    Federal costs for Medicaid, Food Stamps and other means-tested 
programs will increase because more families will use public assistance 
when non-custodial parents do not pay child support.
    A reduction in the amount of collections that states pay to the 
federal government to reimburse TANF grants can be expected.
State and Local Level:
    Last year Marathon County Child Support collected over $19,000,000. 
for children and families, this amount would be reduced drastically.
    Marathon County will lose $325,740. in federal funding to support 
critical activities of the child support program, as well as severely 
diminish capacity to continue innovative programs.
    If the funding gap is not filled by state government, state and 
local child support agencies will be forced to reduce staff thereby 
reducing their ability to establish paternity, locate non-custodial 
parents and establish/enforce child and medical support orders for the 
7,537 families served by Marathon County.
    Increased local, state and federal government spending in Medicaid, 
TANF, Food Stamps, and other means-tested social service programs will 
results.
    The imposition of a mandated $25 collection fee discourages parents 
from participating in the child support program. When families do not 
receive child support, they need more help from public assistance 
programs. The reduction in federal match for genetic testing would 
deprive children of the right to two parents, the door to Social 
Security, pension/retirement benefits and health insurance, opportunity 
for extended family ties and access to critical medical history and 
genetic information is closed to them.
    The child support enforcement program's goal is to ensure that 
children benefit from a reliable source of financial and medical 
support from both parents. Very few programs serve more children and 
families than does the Nation's child support enforcement program. 
Throughout its history, the child support enforcement program has 
enjoyed wide bi-partisan Congressional support for enhanced enforcement 
tools and funding at the federal and state level. This support is based 
on their alignment with the program's anti-poverty/self-sufficiency 
philosophy and its success.
    In summary we asking for:
    Restoration of the authority to use incentive funds as match will 
ensure that child support enforcement services to more than 17 million 
children are not jeopardized.
    Repeal of the $25 annual collection fee will encourage parents to 
participate in the child support program and reduce the need to turn 
for help to public assistance programs.
    Restoration of the 90% federal match for genetic testing will 
ensure children the rights and benefits associated with having two 
parents.

                                 

            Statement of Minnesota Inter County Association

    Mr. Chair, members of the committee, this testimony is submitted on 
behalf of MICA--The Minnesota Inter County Association, AMC--the 
Association of Minnesota Counties and MACSSA--the Minnesota Association 
of County Social Service

Administrators. These three Minnesota county associations support 
rescinding the child support cuts made in the 2005 Federal Deficit 
Reduction Act.
Importance of Child Support
    Minnesota supports the right of every child to receive basic 
financial support. We believe that every parent has an obligation to 
support his or her child. To ensure that children receive the basic 
financial, medical and childcare support they deserve, the Federal 
government established a national child support program that mandates 
state-administered collection programs. Minnesota is one of a handful 
of states that have child support systems that are state supervised and 
county administered. The federal government, state and the counties 
fund our system. Minnesota is proud to be rated as a high performing 
child support state. (Attached is a Minnesota Child Support Fact 
Sheet.)
    The Federal Deficit Reduction Act enacted last year changes the way 
Minnesota draws down federal matching funds for the operation of our 
state and county child support program. Effective October 2007, the new 
federal regulations prohibit the state from using their federal 
incentive funds as a match for federal child support funding.
    Prior to the passage of this Act, Minnesota counties routinely 
earned federal incentives for their efficient and effective delivery of 
child support collection services that help many low, moderate and some 
higher income families. These federal incentives have been reinvested 
in the child support program to earn additional federal participation 
dollars. Minnesota earned about $12 million in incentives for good 
child support performance. Minnesota reinvested that $12 million in the 
child support program and the federal government, which matches every 
county/state dollar spent on child support with almost $2 additional 
dollars, gave us an additional 24 million for the program.
    So, that means that the $8 million cut in federal funding to 
Minnesota multiplies into an annual cut of $24 million to counties to 
operate their child support systems.
    How will the loss of $24 million in federal funding impact 
Minnesota's Child Support program

      The counties will have to cut $24 million in child 
support expenses.
      Statewide, we estimate that counties will have to cut 
37.5% of their child support workforce. That's 442 workers throughout 
Minnesota's 87 counties. (To be more precise, the $24 million is 
equivalent to the cost of 442 child support workers.)
      Fewer child support staff means fewer families will be 
helped in collecting child support dollars they can consistently count 
on receiving each month.
      Fewer child support staff also means that fewer dollars 
will be collected.
      Since 60% of families using child support are former 
public assistance recipients, counties anticipate that a significant 
number of families will lose their hard-won self-sufficiency. More 
Minnesota children will live in households in poverty. More families 
will have to rely on public assistance programs. Some children will 
lose their private health insurance coverage, and more families will 
not be able to purchase quality childcare.
      Counties and the state have been instituting 
efficiencies. However, we anticipate a 37.5 % reduction in staff will 
result to a reduction in collections of 19% to 25%, which amounts to 
$66 to $150 million less in child support collections statewide. ($66 
million is based on the CBO estimate that the loss of collections is 
equal to half the percentage of the administrative funding reduction. 
Taking the loss of the incentive FFP as a percentage of FFY 2005 county 
administrative costs, yields a 22 percent reduction. The CBO would 
estimate a resulting loss of 11 percent in collections. Some may regard 
this estimate as conservative, but it is from a relatively credible 
independent source.)
      Expect more complaints from the employers as understaffed 
child support agencies fail to update the income withholding system in 
a timely manner.
      Expect the $24 million federal cut to multiply even 
further as Minnesota's performance declines, resulting in the loss of 
federal performance incentives. If our performance fails to meet the 
95% data integrity standard set by the federal government, our 
performance incentives will disappear entirely. Parents currently pay 
either a 1% fee on the amount collected or on the amount owed. Fewer 
collections equal less fee revenue.The Best Solution for Minnesota 
Families

The Best Solution for Minnesota Families
    The Federal government rescinds the provision of the 2005 Federal 
Deficit Reduction Act that eliminates the match incentive dollars and 
thereby Minnesota continues to receive the $24 million in additional 
federal participation dollars. This would enable Minnesota to continue 
running a quality child support program and continue to earn about $12 
million in child support Federal program performance Incentives.
    Minnesota will use the Federal funding to ensure that Minnesota 
Families continue to receive quality services for:

      Locating parents.
      Establishing paternity. Establishing and enforcing court 
orders for basic support, medical support, and child care support.
      Reviewing and modifying orders for support.
      Working with other states to enforce support when one 
parent does not live in Minnesota.
      Collecting and processing payments.

                                 

Statement of National Association for State Community Services Programs

    Over the past several years and once again this year, the President 
has zeroed out the Community Services Block Grant (CSBG) program in his 
budget. However, recognizing the importance of the numerous self-
sufficiency services provided by the CSBG Network, Congress has 
continued to support the program in word and in action by providing the 
CSBG program with funding. The National Association for State Community 
Services Programs (NASCSP), the national association representing state 
administrators of the Department of Health and Human Services' 
Community Services Block Grant (CSBG) and state directors of the 
Department of Energy's Low-Income Weatherization Assistance Program, 
would like to thank Congress for its continued support of the Community 
Services Block Grant (CSBG) and requests an appropriation of $700 
million for the state grant portion of the CSBG. We are requesting $700 
million in CSBG funding this year in order for the CSBG Network to 
continue addressing the long-term needs of those families affected by 
Hurricanes Katrina and Rita, those families transitioning from welfare 
to work, and to assist low-income workers in remaining at work through 
supportive services such as transportation and child care. It is 
essential that the CSBG funding be increased for FY 2008. The across 
the board cuts to the CSBG funding over the past several years has 
decreased the ability of the CSBG Network to provide essential services 
to low-income Americans.

BACKGROUND
    The states believe the CSBG is a unique block grant that has 
successfully devolved decision-making to the local level. Federally 
funded with oversight at the state level, the CSBG has maintained a 
local network of nearly 1,100 agencies which coordinate nearly $9.9 
billion in federal, state, local and private resources each year. 
Operating in 99% of counties in the nation and serving nearly 15 
million low-income individuals, members of more than 6 million low-
income families, CSBG eligible entities, largely local Community Action 
Agencies (CAAs), provide states with a stable and guaranteed network of 
designated entities which are mandated to change the conditions that 
perpetuate poverty for individuals, families, and communities. There is 
no other program in the U.S. mandated by federal statute to respond to 
poverty. To fulfill that mandate, CAAs provide services based on the 
characteristics of poverty in their communities. For one community, 
this might mean providing job placement and retention services; for 
another, developing affordable housing. In rural areas, it might mean 
providing access to health services or developing a rural 
transportation system.
    Since its inception, the CSBG has shown how partnerships between 
states and local agencies benefit citizens in each state. We believe it 
should be viewed as a model of how the federal government can best 
promote self-sufficiency for low-income persons in a flexible, 
decentralized, non-bureaucratic and accountable way.
    Long before the creation of the Temporary Assistance for Needy 
Families (TANF) block grant, the CSBG set the standard for private-
public partnerships that work to revitalize local communities and 
address the needs of low-income residents. Family oriented, while 
promoting economic development and individual self-sufficiency, the 
CSBG relies on an existing and experienced community-based service 
delivery system of CAAs and other non-profit organizations to produce 
results for its clients.

WHAT DO LOCAL CSBG AGENCIES DO?
    Since CAAs operate in rural areas as well as in urban areas, it is 
difficult to describe a typical Community Action Agency. However, one 
thing that is common to all is the goal of self-sufficiency for all of 
their clients. Reaching this goal may mean providing day care for a 
struggling single mother as she completes her General Equivalency 
Diploma (GED) certificate, moves through a community college course and 
finally is on her own supporting her family without federal assistance. 
Many CAAs administer the Head Start Program which helps meet the 
educational needs of low-income families. It may mean assisting a 
recovering substance abuser as he seeks employment. Many of the 
Community Action Agencies' clients are persons who are experiencing a 
one-time emergency. Others have lives of chaos brought about by many 
overlapping forces--a divorce, sudden death of a wage earner, illness, 
lack of a high school education, closing of a local factory or the loss 
of family farms.
    CAAs provide access to a variety of opportunities for their 
clients. Although they are not identical, most will provide some, if 
not all, of the services listed below:

      a variety of crisis and emergency safety net services
      employment and training programs
      transportation and child care for low-income workers
      individual development accounts
      micro business development help for low-income 
entrepreneurs
      local community and economic development projects
      housing, transitional housing, and weatherization 
services
      Head Start
      energy assistance programs
      nutrition programs
      family development programs
      senior services

    CSBG is the core funding which holds together a local delivery 
system able to respond effectively and efficiently, without a lot of 
red tape, to the needs of individual low-income households as well as 
to broader community needs. In addition, CSBG funds many of these 
services directly. Without the CSBG, local agencies would not have the 
capacity to work in their communities developing local funding, private 
donations and volunteer services and running programs of far greater 
size and value than the actual CSBG dollars they receive.
    CAAs manage a host of other federal, state and local programs which 
makes it possible to provide a one-stop location for persons whose 
problems are usually multi-faceted. Over half (52%) of the CAAs manage 
the Head Start program in their community. Using their unique position 
in the community, CAAs recruit additional volunteers, bring in local 
school department personnel, tap into faith-based organizations for 
additional help, coordinate child care and bring needed health care 
services to Head Start centers. In many states they also manage the Low 
Income Home Energy Assistance Program (LIHEAP), raising additional 
funds from utilities for this vital program. CAAs may also administer 
the Weatherization Assistance Program and are able to mobilize funds 
for additional work on residences not directly related to energy 
savings that, for example, may keep a low-income elderly couple in 
their home. CAAs also coordinate their programs with the Community 
Development Block Grant program to stretch federal dollars and provide 
a greater return for tax dollars invested. They also administer the 
Women, Infants and Children (WIC) nutrition program as well as job 
training programs, substance abuse programs, transportation programs, 
domestic violence and homeless shelters, as well as food pantries.
    For every CSBG dollar they receive, CAAs leverage $5.40 in non-
federal resources (state, local, and private) to coordinate efforts 
that improve the self-sufficiency of low-income persons and lead to the 
development of thriving communities.

WHO DOES THE CSBG SERVE?
    National data compiled by NASCSP show that the CSBG serves a broad 
spectrum of low-income persons, particularly those who are not being 
reached by other programs and are not being served by welfare programs. 
Based on the most recently reported data, from fiscal year 2005 CSBG 
serves:

      More than 2.9 million families with incomes at or below 
the poverty level; of these customer families, 30% are severely poor as 
they have incomes at or below 50% of the poverty guidelines. In 2005, 
the poverty level for a family of three was $8,046.
      More than 1.3 million families headed by single mothers.
      More than 1.7 million ``working poor'' families with 
wages or unemployment benefits as income; collectively, they make up 
40% of all program participants.
      More than 370,000 TANF participant families, 19% of the 
average monthly TANF caseload.
      More than 3.7 million children.
      More than 2.8 million people without health insurance.
      Almost 1.8 million adults who had not completed high 
school.

MAJOR CHARACTERISTICS OF THE CSBG NETWORK
    Due to the unique structure of the CSBG, the CSBG Network has 
earned a reputation for its:

EMERGENCY RESPONSE: CAAs are utilized by federal and state emergency 
        personnel as a frontline resource to deal with emergency 
        situations such as floods, hurricanes and economic downturns. 
        They are also relied on by citizens in their community to deal 
        with individual family hardships, such as house fires or other 
        emergencies.
    In fact, during and after Hurricanes Katrina and Rita, the state 
CSBG offices and local CAAs quickly mobilized to provide immediate and 
long-term assistance to over 355,000 evacuees. This immediate 
assistance included, but was not limited to, transportation, food, 
medical check-ups, housing, utility deposits, job placement, and 
clothing. State CSBG offices and CAAs across the country coordinated 
their relief efforts with other agencies providing disaster relief 
assistance such as FEMA, Red Cross, and other faith-based and 
community-based organizations.
    State CSBG offices, through their local network of CAAs, continue 
to provide the long-term assistance evacuees will need as they relocate 
and re-establish themselves through self-sufficiency and family 
development programs. These programs offer comprehensive approaches to 
selecting and offering supportive services that promote, empower and 
nurture the individuals and families seeking economic self-sufficiency. 
At a minimum, these approaches include:

      A comprehensive assessment of the issues facing the 
family or family members and of the resources the family brings to 
address these issues;
      A written plan for becoming more financially independent 
and self-supporting;
      A comprehensive mix of services that are selected to help 
the participant implement the plan;
      Professional staff members who are flexible and can 
establish trusting, long-term relationships with program participants; 
and
      A formal methodology used to track and evaluate progress 
as well as to adjust the plan as needed.

LEVERAGING CAPACITY: For every CSBG dollar they receive, CAAs leverage 
        $5.40 in non-federal resources (state, local, and private) to 
        coordinate efforts that improve the self-sufficiency of low-
        income persons and lead to the development of thriving 
        communities. In FY 2005, every CSBG dollar was matched by 
        $15.90 from all other sources.

VOLUNTEER MOBILIZATION: CAAs mobilize volunteers in large numbers. In 
        FY 2005, the most recent year for which data are available, the 
        CAAs elicited more than 51 million hours of volunteer efforts, 
        the equivalent of almost 24,880 full-time employees. Using just 
        the minimum wage, these volunteer hours are valued at nearly 
        $266 million.

ADAPTABILITY: CAAs provide a flexible local presence that governors 
        have mobilized to deal with emerging poverty issues.
    Moreover, the CSBG Network has also earned a reputation for being:

ACCOUNTABLE: The federal Office of Community Services, state CSBG 
        offices, and CAAs have worked closely to develop a results-
        oriented management and accountability (ROMA) system. Through 
        this system, individual agencies determine local priorities 
        within six common national goals for CSBG and report on the 
        outcomes that they achieved in their communities.

LOCALLY DIRECTED: Tri-partite boards of directors guide CAAs. These 
        boards consist of one-third elected officials, one-third 
        representatives from the private sector, and not less than one-
        third of the members are representative of the low-income 
        persons in the neighborhoods served by the CAA. The boards are 
        responsible for establishing policy and approving business 
        plans of the local agencies. Since these boards represent a 
        cross-section of the local community, they guarantee that CAAs 
        will be responsive to the needs of their community.
    The statutory goal of the CSBG is to ameliorate the effects of 
poverty while at the same time working within the community to 
eliminate the causes of poverty. The primary goal of every CAA is self-
sufficiency for its clients. Helping families become self-sufficient is 
a long-term process that requires multiple resources. This is why the 
partnership of federal, state, local and private enterprise has been so 
vital to the successes of the CAAs.

EXAMPLES OD CSGB AT WORK
    Since 1994, CSBG has implemented a Results-Oriented Management and 
Accountability (ROMA) system. Through ROMA, the effectiveness of 
programs is captured through the use of goals and outcomes measures. 
Below you will find the network's nationally aggregated outcomes 
achieved by individuals, families and communities as a result of their 
participation in innovative CSBG programs during FY 2005:

      3,870,900 low-income individuals, families, and 
communities experienced reduced poverty conditions
      92,804 participants gained employment with the help of 
community action
      20,160 participants obtained ``living wage'' employment 
with benefits
      113,646 low-income participants obtained safe and 
affordable housing in support of employment stability
      601,961 low-income households achieved an increase in 
non-employment financial assets, including tax credits, child support 
payments, and utility savings, as a result of community action ($100.4 
million in aggregated savings)
      2,355 families achieved home ownership as a result of 
community action assistance
      143,793 low-income people obtained pre-employment skills 
and received training program certificates or diplomas, completed Adult 
Basic Education or GED coursework and received certificates or 
diplomas, and/or completed post-secondary education and obtained a 
certificate or diploma
      3,864,234 new community opportunities and resources were 
created for low-income families as a result of community action work or 
advocacy, including ``living wage'' jobs, affordable and expanded 
public and private transportation, medical care, child care and 
development, new community centers, youth programs, increased business 
opportunity, food, and retail shopping in low-income neighborhoods

    At the end of the day, the CSBG Network represents our abiding 
national commitment to care for the less fortunate and in recognition 
that we are stronger when we do so. The CSBG and CSBG Network, in 
addition to other non-profit faith-based and community-based 
organizations, are a critical complement to the public sector's efforts 
towards helping to lift low-income Americans and their communities out 
of poverty and into self-sufficiency.
    In fiscal year 2005, the CSBG Network assisted approximately 21% of 
the persons in poverty that year and almost 15 million low-income 
individuals who are members of more than 6 million low-income families. 
Renewed funding for the CSBG Network is one of the best ways to ensure 
that America has an experienced, guaranteed and trusted network to 
assist its most vulnerable families in achieving and maintaining self-
sufficiency.

                                 

      Statement of National Child Support Enforcement Association

    Recent Congressional legislation has resulted in a dramatic impact 
on the functioning of the child support program, with some key changes 
adversely affecting low-income families.
    As representatives of national, regional, state, local child 
support associations listed below, we stand united in support of House 
Bill 1386, The Child Support Protection Act of 2007. HR 1386 will 
restore lost funding for a universally-acclaimed, cost-effective 
program that indisputably keeps thousands of families from slipping 
into greater poverty. We believe that repealing the provision of the 
Deficit Reduction Act (DRA) of 2005 that would end the ability of 
states to use performance incentives as match for federal funds is 
critical. We would like to take this opportunity to discuss the 
performance incentive match and two other child support funding 
provisions of the DRA. We hope that our response to your invitation to 
testify will provide information to allow you to make changes that will 
maintain the program's unparalleled success as a key poverty-fighting 
program.
    In December 1974, Congress passed Title IV-D of the Social Security 
Act, creating the federal/state/tribal child support program (IV-D 
program). Since then, Congress has nurtured this bipartisan program 
through the passage of numerous bills that strengthened the tools 
needed to establish legally-recognized fathers for children born out of 
wedlock and to ensure that children receive the support to which they 
are entitled. Last year, Congress severely jeopardized the continuing 
success of the nation's Title
    IV-D agencies by legislating funding changes that irreparably harm 
the program.
    Congress' 2006 passage of the DRA provided important new tools to 
assist state and local government agencies to improve their collection 
rate, such as lowering the passport denial threshold, adding tax 
offsets for older children, simplifying distribution of support, and 
expanding medical support options. However, three funding provisions in 
DRA unmistakably undercut the IV-D program, offsetting much of the 
recent gains made by the child support agencies in the country:

    1.  Disallowing the match of state-earned incentive dollars with 
Federal Financial Participation (FFP) undercuts a covenant between the 
federal government and states to promote efficiency and success.
    2.  Imposing a $25 fee for never-TANF cases in which annual 
collections are $500 or greater hurts many parents living on the cusp 
of poverty and requires costly automated systems changes and added 
bureaucracy to administer.
    3.  Reducing the genetic testing FFP for parentage testing from 90% 
to 66% sends the wrong message to families and states that parentage 
determination is not a top priority, and further financially burdens 
states reeling from the incentive-match loss.
Loss of Incentive Match
    The Congressional Budget Office (CBO) estimates that the DRA 
incentive match loss alone would reduce families' income from child 
support by $11 billion over 10 years. The CBO estimate assumed state 
legislatures and county governments would make up half of the lost 
federal funds. This projection now seems overly optimistic, since no 
state has secured the budget authority to replace the estimated $937 
million in lost FFY08 funding. This will have devastating impacts on 
many local child support offices as well as state-level IV-D offices
    When Congress passed the Child Support Performance and Incentive 
Act of 1998 (CSPIA), it created an innovative incentive program that 
rewards efficient, results-oriented IV-D program efforts. About one in 
four dollars that are currently used to fund the child support program 
come from CSPIA incentives and matched FFP dollars. The match alone 
represents about one of six program dollars. To suddenly reduce federal 
support for the program while maintaining all of the current state 
program requirements constitutes an unfunded mandate. Congress made a 
pact with state and local child support agencies when it passed CSPIA: 
Congress agreed to invest in efficient, successful programs and in 
return the states agreed to accept a cap on annual incentive dollars, 
which did not exist before CSPIA. CSPIA has led to remarkable 
improvements in performance as states compete for their fair share of 
the incentive pie. In fact, the Office of Management and Budget 
recently recognized the IV-D program as the highest-rated social 
services and block-grant formula program, awarding the child support 
program a 90% score through its Program Assessment Rating Tool (PART). 
The great strides made in the years since Congress passed CSPIA are 
jeopardized by the DRA incentive match loss.
    Because of the drastic cuts mandated by the DRA, state and local 
agencies will no longer be able to provide the level of child support 
services that poor and near-poor parents and children deserve. The cuts 
mean a rollback in everyday services, and fewer dollars available for 
initiatives involving automation improvements, hard-to-collect and 
large-arrearage cases, customer service and employer outreach. For the 
17.2 million children who live apart from their non-custodial parents, 
the negative impacts will be enormous.
    Today, over 60,000 child support professionals assist families. The 
DRA mandated cut in federal support for the child support program will 
very likely lead to a dramatic down-sizing of the workforce, resulting 
in much higher caseloads per worker and fewer cases being worked 
successfully.

Imposing the $25 Fee
    The imposition of the $25 fee on families who have never received 
TANF benefits and who receive $500 or more in collections in a year may 
result in hardship for many of the persons the program is currently 
designed to help: the near-poor who need the program's support to 
maintain independence from means-tested programs. Custodial parents 
will likely bear the cost of the fee in most states. This means that 
many poor parents trying to stay afloat will have to manage without 
some necessities to pay a fee that provides minimal upside benefit to 
the federal government while imposing downside harm on struggling 
families.
    State IV-D programs will expend considerable resources developing 
plans to impose the fee and explaining the fee to parents. Still 
greater expenditures may be required to make adjustments to their 
automated systems, as the impact of the fee ripples through the 
distribution algorithms that support the disbursement technology. The 
cost of this change and its associated questionable policy implications 
make the $25 fee a counterproductive mandate on states.

Reducing the Genetic Testing FFP
    By reducing the genetic testing FFP from 90% to 66%, Congress is 
downgrading the priority status of efforts to provide legally-
recognized fathers for children born out-of-wedlock. In 2005, about 1.5 
million children, or 37% of live births, were born to parents not 
married to one another. Genetic testing is the key evidence to provide 
legal fatherhood status for an alleged or putative father, introducing 
a formal relationship between parent and child that will last a 
lifetime, including rights and responsibilities. To promote family 
stability, permanent two-parent contributions to the life of a child, 
and certainty regarding relationships and duties, Congress should 
repeal the reduction in FFP for genetic testing.
Unprecedented Unanimity in the Child Support Community
    Opposition to the DRA's IV-D funding changes and support for 
subsequent legislative efforts to repeal the DRA's provisions that hurt 
families have united the child support community as never before. The 
undersigned representatives of national, regional, state, and local 
child support associations support H.R. 1386's repeal of the incentive-
match disallowance, and the repeal of the $25 fee and genetic testing 
FFP reduction as well. We strongly believe that Congress must make 
these changes to prevent major disruption in collection efforts and to 
keep families out of poverty.

                                 

                           Statement of NCSL

Reauthorization of TANF
    The Deficit Reduction Act (DRA) accomplished a long-sought 
reauthorization of the Temporary Assistance to Needy Families (TANF) 
program. However, the types of changes made to TANF in the DRA could 
easily compromise very successful state programs. Since its creation in 
1996, the TANF program has moved families from welfare dependency to 
self-sufficiency. The 1996 law, which NCSL supported, established a 
model bipartisan state-federal partnership, the hallmark of which was 
flexibility that enabled each state to design a welfare program 
tailored to the needs of its TANF recipients and local conditions. 
State legislators were involved with reforming welfare even before the 
passage of the original 1996 law, and they share your commitment to 
seeing all recipients fully engaged in productive activities that will 
help them achieve self-sufficiency. However, states need the 
flexibility to decide which services will help the families on its 
caseload become self-sufficient. Unfortunately, the DRA and the 
subsequent Interim Final Rule made the TANF program less flexible.

Work Requirements
Two Parent Families
    One of the biggest concerns of states was not addressed in 
reauthorization, despite the fact that it was included in congressional 
and administration proposals. This is a technical fix that Congress 
must make. Ninety percent of the two parent families on a state's 
caseload must be working, as compared to 50 percent of families headed 
by single parents. HHS officials have stated that they do not believe 
this is a reasonable standard. Two parent families on welfare are 
typically families with multiple barriers to self-sufficiency--for 
example, refugee families, or a parent caring for a disabled family 
member. A legislative change to the work requirements for two parent 
families is the only way to ensure that these requirements are not 
counterproductive to our efforts to strengthen families. NCSL would 
strongly support such action.

What Counts As Work
    The way that work activities are defined in the Interim Final Rule 
directly affects the ability of states to offer services that are 
tailored to help each family or recipient on the TANF program. NCSL is 
very concerned that mental health treatment, substance abuse treatment, 
and rehabilitation activities are countable only under the six weeks of 
job search/job readiness. Given that these barriers to work are so 
prevalent in the welfare population, recipients need to have adequate 
time to deal with them. Such activities represent an important part of 
an effective engagement strategy for recipients. Hours spent in such 
activities beyond the narrow time frame of job search and job readiness 
should also count, and should be allowed in other categories such as 
community service, job skills training related to employment or 
education directly related to employment. If such activities are 
counted under the job search and job readiness category, given the 
strict limitations on job search and job readiness, states should not 
have to consider a few hours or day of such activity as an entire week.

Education
    Despite successful state programs that allow TANF recipients to 
work towards a B.A., HHS chose to use a very limited definition of 
education that would not allow states to count recipients in such 
programs in the work rate. We are pleased to hear that HHS may 
reconsider the definition of education leading to employment. Many 
states have successfully used a very focused post-secondary education 
in a programs focused on employment that lead to degrees that allowed 
recipients to access high paying jobs. Education is already limited to 
12 months, and there is no reason to further restrict state flexibility 
in this manner.

Basic Skills Education
    The definitions in the regulations limit basic skills education and 
English as a Second Language (ESL) to tightly integrated components of 
on-the-job and vocational education, making it very difficult for 
states to offer such programs in combination with other activities or 
on a stand alone basis. Many participants require substantial basic 
education or ESL participation if they are to prepare adequately for 
employment and have a chance to move toward self-sufficiency through 
work. For example, better English skills might make a recipient 
employable in a trade he or she is otherwise qualified to pursue. In 
such cases, it makes sense for that training to be available to the 
recipient--and it should be a countable activity. Work place basic 
skills, computer training, and ESL should be part of on the job 
training where they are deemed necessary to prepare the participation 
for the job.

Individuals With Disabilities
    Even when states work hard to engage people with disabilities in 
productive activities and employment, the effort of these participants 
may not count under the rules of the TANF program. States receive no 
credit for the work effort of these recipients. Because of Americans 
with Disabilities Act (ADA) concerns and because a state may have 
determined either through state statute or the federal SSI or SSDI 
application process that a recipient is disabled, a state may not want 
to sanction that recipient. States need the option, on a case by case 
basis, to exclude adults from the work rate they have determined to be 
disabled or who are awaiting determination of their SSI or SSDI claim. 
And those recipients who are pending SSI/SSDI cases should be taken 
into consideration as a factor in the ``degree of noncompliance'' 
determination by HHS when states are penalized for not meeting the work 
rate. In addition, while we appreciate the provision that if an SSI 
applicant is approved a state can retroactively remove them from the 
rolls up until December 31st, NCSL has asked HHS to either extend that 
retroactivity to the final determination of the state's work 
participation rates by HHS to allow for the lengthy SSI application and 
decision-making process, or extend retroactivity for two quarters, 
until March 31st, to better align with wage data released at the 
beginning of the new year. We urge Congress to ensure that states have 
flexibility to work with individuals with disabilities.

State Legislative Calendars
    NCSL urges Congress to delay the effective date of new TANF 
requirements. States need to have time to carefully consider changes to 
their programs in order to comply with the law, including reallocating 
funding and changing state statutes. Making changes to increase work 
participation rates is not a straightforward matter of implementing 
administrative changes. Instead, it requires state policymakers to 
reconsider state TANF goals and fit continued achievement of these 
goals with the new federal requirements. State officials can then make 
statutory, budget and administrative changes that would enable them to 
meet the federal requirements. For example, Vermont's TANF program is 
in state statute. Vermont must modify its Reach Up program by modifying 
that statute (33 V.S.A. section 1101 et seq), which specifies the work 
hours required, deferments from participation, and separate state 
programs. Ohio also has a fairly specific TANF statute that includes 
some definitions of work activities, as does North Dakota. In several 
states, two parent families cannot be moved into programs supported by 
state general funds without legislative action. When the Interim Final 
Rule was released in August, only 11 state legislatures were still in 
session, and most of those legislatures had already completed work on 
their budgets. They were unable to immediately address changes to their 
program that require legislative actions. Even though states are now in 
their 2007 legislative session, almost all of them will again be out of 
session in September, when the Final Rule is expected. And additional 
guidance on the work plans is not expected until next month, when 
states legislatures are well on the path toward adjournment. States are 
faced with having to make changes in their program that may not reflect 
final requirements. NCSL urges Congress to delay date for 
implementation of new requirements for a year after the publication of 
final regulations.

Child Support Incentive Funding
    NCSL strongly supports legislation introduced in the House and the 
Senate repealing the provision in the Deficit Reduction Act of 2005 
that prohibits states from using child support incentive funds to match 
federal funds for the program. When this action was taken, the 
Congressional Budget Office identified the cut as an intergovernmental 
mandate that exceeds the threshold of the Unfunded Mandate Reform Act.
    States have used incentive funds to draw down federal funds used 
for integral parts of the child support enforcement program. The funds 
have allowed states to establish and enforce child support obligations, 
obtain health care coverage for children, and link low-income fathers 
to job programs. The cut ignored the fact that funds for child support 
enforcement are used effectively and responsibly. In fact, the child 
support enforcement program received a Program Assessment Rating Tool 
(PART) rating of ``effective,'' and continues to be one of the highest 
rated block or formula grants of all federal programs.
    Consistent child support helps save children from being raised in 
poverty. Reductions in child support administrative funds inevitably 
lead to lower child support collections, leaving families less able to 
achieve self-sufficiency. We urge you to undo this ill-considered 
action.

Conclusion
    NCSL urges you to take steps to preserve state flexibility in the 
critically needed programs that serve low-income children and families. 
State legislators believe that states have made good use of federal 
child support and TANF funding, and that states will continue to work 
to help families escape poverty. A copy of our letter supporting 
repealing the DRA provision that prohibits states from using child 
support incentive funds to match federal funds is attached. If you wish 
to discuss NCSL's comments, please contact Sheri Steisel 
([email protected]) or Lee Posey ([email protected]).
                                 

Statement of New Jersey Department of Human Services, Trenton, NJ 08625

    I want to thank Chairman McDermott and distinguished members of the 
Income Security and Family Support Subcommittee of the Committee of 
Ways and Means for allowing me the opportunity to provide testimony on 
New Jersey's concerns with the Deficit Reduction Act (DRA) of 2005.

BACKGROUND
    The remarkable success of the Work First New Jersey program in 
placing thousands of adults in jobs that have resulted in their self-
sufficiency has largely been a result of the State's ability to design 
work activities that fit the individuals we are serving and the types 
of jobs that are available in our State. New Jersey's TANF caseload has 
dropped from 112,000 families in 1995 to 42,000 families at this time. 
While I support increased work, training, and educational opportunities 
for adults on TANF, it is very important that the State be granted 
sufficient flexibility to meet the new challenges presented in the DRA.
    New Jersey also recently transferred the administration of its work 
activities to the New Jersey Department of Labor and Workforce 
Development in order to marshal the resources that are available under 
the Workforce Investment Act (WIA). These resources will be especially 
important to meet the higher work participation rate, but this will be 
difficult unless we have the flexibility to match the work activities 
of TANF with WIA to create a seamless system.
    Another key to New Jersey's success in moving families from welfare 
to work has been the provision of support services to adults with 
multiple challenges. In New Jersey, almost 800 TANF clients are 
currently participating in a substance abuse treatment program. Another 
200 clients are receiving mental health services in combination with a 
supported work program. Currently, these individuals do not count as 
part of the federal participation rate; however, the caseload reduction 
credit has allowed New Jersey to continue providing these vital 
services.
    With regard to the Child Support Program, I want to express my 
concern about the devastating effects of the funding reductions within 
DRA which, if not restored in the FY 2008 budget, would greatly impede 
our ability to ensure the well being of New Jersey's children and 
families. The federal incentive match and reimbursement for genetic 
testing costs are key components in New Jersey's effort to expand and 
improve the child support enforcement program. Our mission to provide 
for the well-being of children and families, while simultaneously 
reducing federal and state public assistance costs, will be undermined 
by the cuts. This will diminish the New Jersey's ability to deliver 
public value and provide effective child support enforcement services 
to its citizens. As a result, fewer New Jersey children will receive 
child support from their non-custodial parents as our agency will be 
forced to reduce staff and eliminate innovative programs.
    Research shows that the gains made in reducing families' dependence 
on government programs such as Medicaid, TANF, and Food Stamps through 
increased collections of child support have decreased government 
spending in these programs. Conversely, this reduction in funding for 
the child support program will lead to greater numbers of families 
having to turn to government assistance.
    As a result of the enactment of the DRA in 2006, New Jersey 
incurred unfunded mandates in TANF totaling $13 million annually to 
increase the number of adult clients required to participate in work 
activities, $10 million in child care annually to expand the 
availability of child care slots for adults enrolled in a mandated work 
activities, and $5 million in client work verification mandates. These 
unfunded mandates come at a time when New Jersey has seen both its TANF 
and Child Care and Development Fund (CCDF) block grants frozen since 
their inception in 1997 under the landmark Personal Responsibility and 
Work Opportunity Reconciliation Act (PRWORA) legislation and we are 
finding it extremely difficult to accommodate the aforementioned 
federal mandates given New Jersey's budgetary constraints. Since 1997, 
New Jersey has lost $114 million in spending power under our TANF block 
grant total of $404 million after adjusting for inflation.

TANF PROGRAM
    I request your consideration of the following suggestions that will 
allow the states the best opportunity to meet the required work 
participation rate and help individuals move to employment and economic 
self-sufficiency.

      Two-Parent Households--The work participation rate for 
two parent households should be reduced from 90% to 50%. We believe 
that the 50% rate is a more realistic percentage for this group that 
has many challenges. Based on New Jersey's experience, most two parent 
households have multiple barriers (i.e., mental health, substance 
abuse) that would make the 90% percent participation rate virtually 
unobtainable.
      Penalty Free Phase-in Period--It is suggested that the 
requirements for states to meet the 50% participation rate and to 
verify participation in work activities be phased-in. New Jersey will 
need additional time to amend state statutes and to put systems in 
place to meet the new mandates.
      Work Activities for Persons with Disabilities--Many of 
our participants with disabilities may only be able to work part-time. 
We believe that if a person is deemed to be participating in an 
authorized vocational rehabilitation program, then they should be 
considered as meeting the full 30 hours of TANF participation.
      Job Referral and Placement--Job placement is the main 
goal of all work activities under TANF and needs to be integrated 
within all activities. The regulations restrict the use of the job 
search full-time activity to four consecutive weeks, or up to six weeks 
in a year. NJ believes Job Referral and Placement should not be counted 
as Job Search and should be an integral part of all work activities, 
e.g., vocational education, leading toward gainful employment.
      Job Search and Job Readiness Assistance--The regulations 
stress that these activities can only be counted as weeks. Since job 
readiness, substance abuse treatment, rehabilitation services and 
mental health treatments often could be beneficial if combined with 
other work activities, we recommend that states be given the option to 
count these activities in hours instead of weeks.
      Vocational Education--New Jersey recommends that the 
federal definition be broadened to include higher education activities 
on a limited basis for TANF recipients who need one-year or less of 
college level courses to complete the requirements for a baccalaureate 
or associates degree.
      Education directly related to employment in the case of a 
recipient who has not received a high school diploma or a certificate 
of high school equivalency--We believe that this definition should be 
broadened to include students who have a high school diploma or a 
certificate of high school equivalency, but who are assessed in reading 
or math to be below the 8th grade level.
      New Supervision, Documentation, and Verification 
Requirements--The requirement to report attendance/participation 
information ``biweekly'' is logically inconsistent with the ``monthly'' 
timeframe of the primary data reporting requirement. We suggest that 
references to attendance reporting requirements as ``biweekly'' be 
recast in terms equivalent to ``no less frequently than semi-monthly.''
      Exemption for Veterans or Social Security Disability 
Applicants--States should be allowed to exempt individuals who are 
applying for veterans or Social Security disability benefits from work 
participation requirements, without taking a penalty against the 
calculation of the state's TANF work participation rate. As these 
individuals await determinations of their eligibility for disability 
benefits, they should be able to receive TANF benefits without being 
required to participate in work activities, especially since such work 
participation might jeopardize their eventual eligibility for 
disability benefits.
      Medically Determined Disability--States should be allowed 
to take partial credit for individuals who are fulfilling some, but not 
all, of the 30 hours of work requirements for the work participation 
rate, if these individuals are medically determined to have a 
disability that limits their work ability.
      Counting adult basic education as a work activity--States 
should be allowed to count adult basic education, including English as 
a Second Language classes, as an allowable work activity.

CHILD SUPPORT PROGRAM
    With regard to the child support enforcement program, there are 
three vital areas to which we request attention:

      Restore the authority to use incentive funds as State 
funds, eligible for federal financial participation matching, which 
will ensure that child support enforcement services to more than one 
million New Jersey children will not be jeopardized.
      Repeal the $25 annual collection fee, which will 
encourage parents to participate in the child support program and 
reduce their need to turn to public assistance programs.
      Restore the 90% federal match for genetic testing, which 
will ensure children the rights and benefits associated with having two 
parents.

Elimination of the Federal Incentive Match

    As a result of the elimination of the federal incentive match, New 
Jersey will lose over $34 million in federal funding to support 
critical activities of the child support program, which will also 
severely diminish capacity to continue innovative programs that enable 
us to increase our performance, address fatherhood issues and work with 
the Departments of Labor and Workforce Development and Corrections to 
develop additional means to assist individuals in meeting their child 
support obligations.
    If the funding gap is not filled by state government funds, state 
and local child support agencies will be forced to reduce staff, 
thereby reducing their ability to establish paternity, locate non-
custodial parents and establish/enforce child and medical support 
orders for the one million children and families served annually by the 
New Jersey Child Support program. Collections to New Jersey's children 
and families will be significantly reduced. This will 
disproportionately affect low income and working poor families.

Imposition of Mandatory $25 Annual Collection Fee

    The imposition of a collection fee on never-TANF cases acts as a 
disincentive to parents from participating in the child support program 
and will especially impact the working poor and highly vulnerable 
families who are barely managing to stay off of public assistance. When 
families do not receive child support, they are more likely to seek 
assistance from state public benefit programs. As a result, state costs 
for Medicaid, Food Stamps and other means-tested programs will likely 
increase, thereby undermining the goals of welfare reform to help 
families achieve economic self-sufficiency.

Elimination of the Federal Match for Genetic Testing

    Since the use of genetic testing began in the child support 
program, the federal financial participation rate has been 90%, due to 
the importance of paternity establishment to children. Proper 
identification of a child's father is vital not only to enable the 
establishment of a positive relationship, but also to ensure access to 
Social Security benefits, inheritance rights and medical information. 
In fact, paternity establishment is the bedrock upon which child 
support and child welfare rest--a legal obligation to support a child 
can not be imposed until the child's paternity has been established.
    This reduction of the matching rate for paternity establishment is 
contrary to Congressional interest in establishment of paternity and 
the resulting responsibilities and rights flowing from the 
relationship.
    Thank you for allowing me the opportunity to share with you New 
Jersey's concerns with some of the provisions of the DRA. We agree that 
self-sufficiency should be the primary objective of the TANF program, 
and that states should attempt to have as many individuals as possible 
participating in work activities. However, the program should not be 
perceived by the states as just trying to meet the work participation 
rate requirement rather than trying to help as many individuals as 
possible receive the necessary training and supports that will give 
them the best opportunity to succeed. It is important to consider our 
suggestions which will provide us with more flexibility so that we can 
continue to improve in what we believe has been a very successful 
program for nearly 10 years. Also, please consider our suggestions 
regarding the Child Support Program. The program has been a great 
success, as the statistics bear out. Now, however, the DRA threatens to 
diminish some of that success and make the children, already one of the 
most vulnerable of our society, even more vulnerable to poverty and its 
attendant problems. I believe that this Congress must re-emphasize its 
commitment to our children by taking action to repeal the provisions 
that threaten the health of the child support program.

                                 

  Statement of Ohio Child Support Enforcement Agency, Columbus, Ohio 
                                 43215

    The Ohio CSEA Directors' Association is a member organization of 
the 88 County Child Support Enforcement Agencies in Ohio. The County 
Agencies provide direct services to over 1.3 million children and their 
families. We wish to express our very strong support of House Bill 
1386, The Child Support Protection Act of 2007, restoring lost funding 
for a universally-acclaimed, cost-effective program that indisputably 
keeps thousands of families from slipping into greater poverty. We 
believe it is crucial for Congress to repeal the inability to utilize 
earned incentives as local match.
    In 2005, nationally, the program collected $23 billion to serve 16 
million children and families. There is a return of $4.58 on the 
national investment. The Congressional Budget Office estimates that the 
inability to use earned incentives as local match will result in an 
$8.3 billion drop in collections for children. This projection is based 
upon the premise that states and counties will fill at least one half 
of the funding loss created by the Deficit Reduction Act of 2006. 
Therefore, the actual loss in collections could be much greater.
    In Ohio, we collected over $2 billion for more than one million 
children. Our return on investment was $5.66. It is estimated that 
collections for Ohio families will be reduced by over $197 million in 
the first five years after the reduction in funding takes place. This 
will lead to added expenses in many other social service programs such 
as day care assistance, food stamps, housing and utility assistance, 
TANF and many others. This will add to the vulnerability of over one 
half of our cases in Ohio. Currently, 13% are receiving TANF and 40% 
have received TANF assistance in the past. Child support collections 
and medical support enforcement assist these families in maintaining 
self sufficiency, which is the goal of all of us.
    In the mid 1990's Ohio's program was struggling to improve 
performance and to implement an automated system. Currently, our 
program is performing at a very high level and has completed 
implementing our automated system. We continue to strive to improve 
even further. Additionally, we are working very hard to incorporate new 
initiatives which will result in better services and outcomes for 
Ohio's families and other key partners that assist with our program. 
Ohio's total collection ranks 3rd nationally and our performance under 
the incentive allocation has also been 3rd. Therefore, the recent 
decision by Congress to disallow the usage of earned incentives as 
local match has a critical impact on Ohio's families.
    While our performance has improved tremendously, our current 
funding sources have either stagnated or been reduced. As you are 
aware, Ohio's economy is struggling as many manufacturing operations 
are closing or moving elsewhere. Therefore, placing expectations on the 
State and/or County Governments to fill the gap is very unrealistic. If 
funds are available, it would be wonderful to utilize them to provide 
new and additional initiatives and services, rather than replace 
existing funding sources. Additionally, any funds used to replace lost 
federal funding will be taken from other local critical programs that 
help children, families and the elderly.
    In Ohio, the total potential loss in funding availability if not 
filled by local funds within the State is $60 million. This funding has 
been utilized 99% at the County level that provides the direct services 
to our families. $60 million represents approximately 28% of our total 
county expenditures in FFY2005. Ohio collects approximately $600,000 
per staff member. A reduction in funding of 28% will result in a very 
large loss of available staff to establish parentage, cash and medical 
support orders and enforce these orders, let alone the impact on 
answering phones and pursuing new initiatives to continue improving our 
program.
    A study conducted by the Urban Institute found that the child 
support program cost $4 billion in 1999, but saved more than $4.9 
billion in direct budgetary reductions in federal and state outlays in 
the public assistance programs, including TANF, Medicaid, Food Stamps, 
SSI and subsidized housing. In addition, the child support program 
recouped $2.3 billion in TANF and Foster Care costs. The Child Support 
Program in Ohio and Nationally is receiving very positive recognition 
due to its cost effectiveness, goal oriented status and accountability. 
In fact, the program received a Program Assessment Rating Tool (PART) 
rating of ``effective'' and continues to be one of the highest rated 
block or formula grants of all federal programs. With all of the very 
positive aspects of this program outlined, it is difficult to 
understand why Congress would cut funding and negatively impact 
children in Ohio and Nationally.
    We request that Congress support HR 1386 and continue providing 
opportunities for Ohio to improve our program and outcomes for over one 
million families. Thank you in advance for your consideration and 
support on this critical issue.
    Please feel free to contact Kim Newsom Bridges, our Executive 
Director, for more information regarding this testimony and Ohio's 
Program. She can be reached at: e-mail [email protected]

                                 

    Statement of Racine County Child Support Department, Racine, WI

    I am writing this letter to ask you to use your office to restore 
federal funding for the national child support program. As part of the 
Deficit Reduction Act of 2005, $1.5 billion dollars in federal funds 
were cut from the national child support program. For our county this 
means a reduction of $490,169.00 for the County 2008 budget.
    The child support budget funds child support workers and court 
personnel to hear child support cases. According to new estimates that 
I have seen, the reduction set forth above means that one-third to one-
half of the county child support staff, inclusive of court staff, will 
be reduced. Quite frankly, this means the end of the child support 
program in Racine County. The caseloads for the remaining staff will be 
too large (approximately 4,300 per worker) to handle properly. Federal 
incentive goals and mandates for child support establishment and 
enforcement will not be met.
    For every $1.00 spent on the child support program, Racine County 
collected $9.87 in child support and child support arrears. The money 
collected either went directly to a child's caregiver or back to 
government as compensation for public assistance. The import here is 
that for every dollar collected, either less public assistance was 
needed or it was not necessary at all or the government offset the cost 
of public assistance by recouping those costs through direct 
compensation. Given the proposed federal funding cuts for the child 
support program, I expect the state will experience an increase in 
demand for public assistance and a decrease in the money collected to 
recoup public assistance expenditures.
    Below is a fact sheet for your review showing benefits of the child 
support program and the impact the budget reduction will have on the 
Racine County Child Support Department. If you have any questions about 
this correspondence you may contact me directly at 262-636-3247.

    WISCONSIN CHILD SUPPORT ENFORCEMENT ASSOCIATION

    DEFICIT REDUCTION ACT TALKING POINTS

    January, 2007

1.  Deficit Reduction Act of 2005 creates major cuts to the Child 
        Support program

      County child support allocations from Federal Incentive 
Payments and Matching Funds in Calendar Year 2006 was $38,225,900 
statewide; as a result of DRA, these funding sources will decrease:

                i. By $6,360,800 in CY 2007, a 16.6% decrease
                ii. By $25,250,900 in CY 2008, a 66.1% decrease [i]

      DWD estimates reductions in child support collections of 
over $143 million in Wisconsin over the next 5 years as a result of the 
cuts [ii]

    [County option: Racine County faces a decrease in federal funding 
of $0 in CY 2007, and $490,169 in CY 2008. In terms of staffing, this 
translates to a loss of 0 positions in 2007, and 21 positions in 2008. 
As a result, caseloads per FTE could be as high as 4300 cases in 2008.]
2.  It makes financial sense to invest in the Child Support Program

      County Child Support Agencies establish legal fatherhood 
for children born outside of marriage; until paternity is established, 
putative fathers have no legal obligation to support their children.

    In 2006, county agencies established paternity for over 15,000 
children in the State of Wisconsin.[iii] Potential staff cuts and the 
resulting increase in caseloads will have a serious impact on the 
counties' ability to timely effect paternity establishment.
    [County option: Racine County established paternity for approx 1300 
children in 2006.]

      The program in Wisconsin handles over 457,000 support 
cases per year; in 2006 payments of $940,153,416.00 were made through 
the Wisconsin Support Collection Trust Fund [iv]

    [County option: The Racine County Child Support Agency has a 
caseload of 18,811 cases]

      Statewide, approximately $6 are collected for every $1 
spent on the program [v]

    [County option: Racine County Child Support collects $9.87 for 
every dollar spent on the program] $31,247,241.04 WI $3,166,421 2007 
Budget expenses

      Consistent collection of support stabilizes families, 
reducing demand on--and the cost of--public assistance programs

    A study by the Urban Institute, commissioned by the Federal Office 
of Child Support Enforcement, concludes that for every dollar of child 
support that is distributed for TANF cases, there is a forty-cent cost 
avoidance ratio that offsets other federal benefit program expenses, 
such as Food Stamps, TANF, Medicaid, SSI and Housing. The ratio is 
nineteen-cents for every dollar collected in non-TANF cases. Child 
support collections produce a cost avoidance that results in increased 
family self-sufficiency. [vi]

      Child Support is the only program in the State 
systematically enforcing health insurance orders for children, reducing 
the cost of medical assistance programs

    There are over 350,000 children in the Child Support Program's 
caseload in Wisconsin, for whom the county and tribal child support 
agencies are the health insurance watchdog: establishing and enforcing 
parents' legal obligation to provide health insurance when it is 
available from their employers at a reasonable cost.
3.     DWD's Bureau of Child Support and County Child Support Agencies 
        are taking steps to mitigate the effects of DRA

      Child Support Summit--WCSEA and its members committed to 
increasing efficiency and effectiveness through centralization, 
regionalization and standardization
      Problems: despite mitigation, there is a real potential 
for a downward spiral in performance: reduced funding leads to 
decreases in program performance, which reduces performance funding, 
further decreasing performance, etc. Additionally, failure by the State 
to meet the federally required maintenance of effort reinvestment in 
the child support program may result in both federal incentive 
reductions and TANF penalties [vii]

4.     WCSEA seeks support from Wisconsin's Legislators

      Support federal legislation to reverse the child support 
cuts in the DRA
      Support Governor Doyle's proposal to invest $2.9 million 
in FY2008 and $5.5 million in FY2009 to backfill the federal cuts while 
we pursue reinstatement of the federal funding; these funds qualify for 
the 66% federal match, so they will yield an additional $16 million in 
federal matching dollars over the biennium. This investment is 
appropriate because:
      ``For two biennia, the state has relied on federal 
incentive funds in lieu of GPR for state operations, and as the 
exclusive source of state funding for counties under s.49.24. This 
arrangement is no longer sustainable. . . .'' [viii]
      The State will receive GPR from the DRA-imposed $25 
annual collection fee on non-aid CPs for collections over $500
      The State will obtain additional revenue from the 
Governor's proposed increase from $35 to $65 in the annual receiving 
and disbursing fee

    [i] Legislative Fiscal Bureau Analysis of Federal Child Support 
Matching Funds for Child Support Incentive Payments Under the Federal 
Deficit Reduction Act of 2005, 8/28/06

    [ii] DWD Secretary Roberta Gassman's 3/27/06 letter to Wisconsin's 
Congressional Delegation

    [iii] BCS 2006 statistics from Kids Information Data System (KIDS)

    [iv] BCS 2006 statistics for WiSCTF

    [v] Secretary Gassman's 3/27/06 letter.

    [vi] This study can be found at http://www.acf.dhhs.gov/programs/
cse/pubs/2003/reports/cost_avoidance/. Applying the findings of this 
study to Wisconsin's support collection numbers from 2006, significant 
cost avoidance savings result:



                                                                                               Cost Avoidance
            2006 Collections                Dollars Distributed       Savings per $1.00            Savings

Present Assistance cases                  $20,316,408              x .40                              $8,126,563
Former Assistance cases                  $220,863,260              x .19                             $41,964,019
Never assistance cases                   $361,752,320              x .19                             $68,732,940
                                         $602,931,988                                               $118,823,522



    The Urban Institute study attributes the following percentages of 
total cost avoidance savings by program *:






Food Stamps 37%                                 x $118,823,522                                     = $43,964,703
TANF 29%                                        x $118,823,522                                     = $34,458,821
Medicaid 23%                                    x $118,823,522                                     = $27,329,410
SSI 6%                                          x $118,823,522                                      = $7,129,411
Housing 6%                                      x $118,823,522                                      = $7,129,411


    *Percentages are rounded, so they total 101%

    [vii] DWD 2007-2009 Biennial Budget, Re-Estimate Child Support 
Funding, p. 271

    [viii] DWD 2007-2009 Biennial Budget, Re-Estimate Child Support 
Funding, p. 267

                                 

                Statement of Leah Ross, Culver City, CA

    I have heard about the plan to reduce federal funding for child 
support enforcement and am writing to protest this action. I am a Child 
Support Officer for the County of Los Angeles, California. Our 
department is a powerful and effective tool for keeping families out of 
poverty, and helping them to get off government aid. I work in the Call 
Center for Child Support and talk to moms and dads every day who have 
opened a case with us. With our enforcement tools and their help, we 
track down non-custodial parents and manage to keep a tremendous amount 
of money coming in to help them raise their families.
    I have talked to parents who are on the edge of poverty, living 
from one paycheck to another. Our help keeps them from going over the 
edge.
    I have talked to parents who say they just got off welfare because 
we found out where the non-custodial parent works and attached his or 
her wages. Our help gets them off welfare.
    I have helped track down health benefits for a distraught parent 
whose child needed medical care and was turned away at the doctor's 
office. Our help gets those children coverage and help gets them off 
government-sponsored health insurance.
    Also, I am there to help the non-custodial parent. When he doesn't 
understand his bill or has problems with paying, we let him know his 
options so that he can pay a reasonable amount.
    When we get his attention with one of our enforcement methods, such 
as drivers license suspension, we help him figure out the best way to 
get it back and start paying his obligation.
    We get calls every day from parents, employers, escrow companies, 
other agencies or people who just called our number because they didn't 
know where else to turn. We help each and every one of our callers in a 
professional and caring manner. Don't make our job even harder, or 
worse yet, impossible, by cutting funding to this valuable agency. We 
are an agency that brings in the dough. What is the saying? ``Show me 
the money.'' Well, we do it every day, sending checks to families so 
they don't fall into homelessness and penury. We are an agency that 
saves you money. Do not hobble this valuable resource. Keep us funded. 
I support legislation that would rescind the scheduled cuts to Child 
Support in the Deficit Reduction Act, and thank Chairman McDermott and 
Senator Rockefeller for their efforts.

                                 

                      Statement of Faredeh Samuels

    I, Faredeh Samuels, employee of the Los Angeles County Child 
Support Services Department, am opposed to the scheduled budget cuts to 
the Child Support in the Deficit Reduction Act. These cuts will 
increase the already extremely heavy workload that the department is 
experiencing. The CSSD helps improve the lives of children by providing 
them with financial and healthcare needs. CSSD has been more successful 
then ever before in locating delinquent parents and forcing them to 
support their children. If these budget cuts are approved, it will 
cause a negative impact the lives of children in Los Angeles County.
    I support legislation that would rescind the scheduled cuts to 
Child Support in the Deficit Reduction Act, and thank Chairman 
McDermott and Senator Rockefeller for their support.

                                 

               Statement of Washington County, Wisconsin
Support for Adequate Funding of Wisconsin COunties for the Provision of 
                         Child Support Services

    WHEREAS, Wisconsin Counties are mandated to administer Child 
Support Enforcement Programs on behalf of the State and Federal 
Government; and
    WHEREAS, Washington County, along with the 71 other Wisconsin 
Counties, provides child support services to its residents, including 
paternity establishment, obtaining, enforcing and modifying child 
support orders and locating non-custodial parents; and
    WHEREAS, the State of Wisconsin traditionally ranks high in its 
collection and enforcement of child support orders due in part to the 
quality performance of Wisconsin Counties; and
    WHEREAS, Federal Aid covers 66% of all administrative costs of the 
enforcement programs, which means that the Federal Government matches 
local expenditures at a rate of roughly $2 for every $3 spent; and
    WHEREAS, the Federal Deficit Reduction Act of 2005, approved by 
Congress and signed by the President in February, 2006, reduces Child 
Support Enforcement funding by no longer allowing counties to use 
Federal Performance Incentive Funding as local match to offset the cost 
of operating their Child Support Agencies; and
    WHEREAS, this change goes into effect with the beginning of the 
Federal Fiscal Year on October 1, 2007; and
    WHEREAS, the full impact of this change takes place in 2008 when 
Washington County would have to either make substantial program cuts to 
make up for the inability to claim incentive matching funds, or find 
local funding of approximately $95,000 to maintain programs at 2007 
levels; and
    WHEREAS, Washington County believes it is the State's 
responsibility to fully fund its mandated programs, especially if it 
continues to place local governments under levy limits; and
    WHEREAS, decreased Federal funding may mean reductions in Child 
Support Enforcement staff, less child support collections made on 
behalf of single-parent families, and greater reliance on Income 
Maintenance Programs;
    NOW, THEREFORE, BE IT RESOLVED by the Washington County Board of 
Supervisors that this Board requests that the Governor and the State 
Legislature recognize that it is in the best interest of Wisconsin 
residents to have the Governor and the Legislature work cooperatively 
to ensure that adequate state funding is included in the State Budget 
for distribution to Wisconsin Counties to offset the reduction in 
Federal revenue;
    BE IT FURTHER RESOLVED that Congress is urged to re-evaluate the 
impact of the Deficit Reduction Act and restore funding for child 
support services.
    BE IT FURTHER RESOLVED that the County Clerk is directed to provide 
a copy of this resolution to the Governor of the State of Wisconsin, 
Senators Herb Kohl and Russ Feingold, each legislator in the State 
Senate and Assembly representing Washington County constituents and 
Michael Morgan, State Department of Administration.

                               __________

    VOTE REQUIREMENT FOR PASSAGE:  Majority

APPROVED:
/s/ Kimberly A. Nass
    Kimberly A. Nass, County Attorney
Dated 02/14/07

Introduced by members of the EXECUTIVE COMMITTEE as filed with the 
County Clerk.
/s/ Thomas J. Sackett
    Thomas J. Sackett, Chairperson

Considered 02/13/07
Adopted 02/13/07
    Voice Vote: Ayes 28    Noes 0    Absent 2

    (Advisory resolution to provide adquqte funding for child support 
services.)

                                 

                                                     March 23, 2007

Honorable Jim McDermott, Chair
Subcommittee on Income Security and Family Support

Dear Congressman McDermott and Honorable Members of the Subcommittee:

    We appreciate the opportunity to submit a written statement for 
consideration by the Subcommittee and for inclusion in the printed 
record of the above referenced hearing.
    YoungWilliams PC is a Mississippi corporation in the business of 
partnering with public sector child support agencies. Our clients are 
state and local governments. We operate child support projects in a 
number of states including Mississippi, Kansas, Missouri, Nebraska, and 
North Carolina. Our company is very actively engaged in the child 
support community, and has membership in several organizations 
including the National Child Support Enforcement Association (NCSEA), 
the Eastern Regional Interstate Child Support Association (ERICSA), and 
the Western Interstate Child Support Enforcement Council (WICSEC). 
Several of our employees serve on the board or committees of these 
associations and many of our staff members are involved in state and 
local child support organizations. Three members of our management team 
have served as state child support directors in Florida, Montana and 
Nebraska. We are passionate about the child support enforcement 
program, and committed to its mission of enforcing parental 
responsibility and collecting support on behalf of children.
    We know first hand the benefits of the program to the children and 
families who depend upon it. Many of these families are former or 
borderline welfare recipients. Over the last ten years, child support 
collections have skyrocketed, and more families than ever are receiving 
regular support payments. This has enabled families to become self-
sufficient rather than welfare dependent. One often overlooked aspect 
of the program is that it also establishes and enforces private medical 
support coverage, diverting many children from Medicaid and SCHIP 
programs funded by taxpayers. The total amount of savings and 
reimbursement to Medicaid has not yet been quantified, but it saves 
millions and millions of dollars. No other program does so much good 
while reducing the burden on other government programs.
    The Deficit Reduction Act will seriously impede further progress of 
the program. In fact, it may cause the program to backslide especially 
when performance incentives may no longer be used for federal match 
after October 1, 2007. Even though some states might be able to 
partially or completely fill this funding void over the short term, the 
health of the system as a whole is dependent upon the health of each 
and every state and territorial Title IV-D (child support) program. 
This is because the program has a large interstate component. In 
today's society, a substantial number of children have parents who live 
in two different states. Over 17 million children are served by the 
national IV-D program. When compared to the 2000 U.S. Census Report, 
approximately one quarter of the nation's children are in the child 
support caseload. Many of these children can only be served through 
interstate cooperation. When one state IV-D agency becomes backlogged, 
the whole system is affected. In the recent past, there have been 
``black holes'' in the system, where cases were referred from one state 
to another, and languished there. Without adequate and steady program 
funding, this could happen again.
    Federal match on incentives has long been a part of this program, 
and in fact, it was a deliberate decision of Congress to match 
incentives with federal financial participation. Reinvestment of this 
match into programs has significantly contributed to the progress IV-D 
programs have made. This has created better outcomes for children in 
terms of regular financial support and improved access to medical care. 
The program has also become more holistic in the services it provides. 
New programs that reach out to fathers and incarcerated parents have 
been developed to help these populations find work, reintegrate and 
become better able to financially and emotionally support their 
children. The child support community has developed strong partnerships 
with employers, like YoungWilliams, who are legally bound to 
participate in income withholding and new hire reporting. Employers are 
a crucial part of the national child support system, and through 
withholding income of employees owing child support, contributed to 70% 
of the total national child support collections. Employers also 
withhold medical insurance premiums when employees are ordered to 
provide medical support, and insurance is available through the 
employer. The child support community has also forged effective 
relationships with hospitals to provide unwed parents of newborns the 
opportunity to acknowledge paternity at birth. Many of these efforts 
and others would be jeopardized if funding is reduced.
    The IV-D program is not only socially responsible, but fiscally 
accountable. The national IV-D program received an OMB Program 
Assessment Rating Tool (PART) score of 90 percent, representing the 
highest rating among all social services and block grant/formula 
programs. This tool was developed to assess program performance and 
accountability. In federal fiscal year 2005, the program collected over 
$23 billion. For every $1.00 invested in the program, $4.58 was 
collected for families. States are financially rewarded or penalized 
based on their performance in five key areas: paternity establishment, 
support order establishment, current support collections, arrears 
collections and cost effectiveness. This approach is working.
    For the reasons mentioned above, we strongly urge the Subcommittee 
and Congress to support restoration of funding to the IV-D program by 
repealing the cuts in the Deficit Reduction Act of 2005. These cuts 
include the reduction of federal financial participation for paternity 
(DNA) testing from 90% to 66%; the implementation of a $25.00 fee for 
collections; and the most devastating one of all, elimination of 
federal match for incentives.
    Thank you for your consideration. I hope that I have adequately 
conveyed the adverse impact the DRA budget reductions will have upon 
the IV-D program's ability to serve current and future generations. I'd 
be pleased to respond to any requests for additional information 
regarding our company's perspective on this important issue.

            Sincerely,

                                                          Rob Wells
                                                          President

                                 

      Statement of Wisconsin Child Support Enforcement Association

    The WCSEA represents Wisconsin's county and tribal child support 
agencies in their mission to efficiently and effectively establish 
paternity and establish and enforce support orders for Wisconsin's 
families. We present this testimony to illustrate the devastating 
impact that the Deficit Reduction Act of 2005 will have upon our 
agencies and the children we serve.

1.  Deficit Reduction Act of 2005 creates major cuts to Wisconsin's 
        Child Support program

    County child support allocations from Federal Incentive Payments 
and Matching Funds in Calendar Year 2006 was $38,225,900 statewide; as 
a result of DRA, these funding sources will decrease:

          By $6,360,800 in CY 2007, a 16.6% decrease
          By $25,250,900 in CY 2008, a 66.1% decrease\1\

    \1\ Wisconsin's Legislative Fiscal Bureau Analysis of Federal Child 
Support Matching Funds for Child Support Incentive Payments Under the 
Federal Deficit Reduction Act of 2005, 8/28/06

    Wisconsin estimates reductions in child support collections of over 
$143 million in Wisconsin over the next 5 years as a result of the 
cuts.\2\
---------------------------------------------------------------------------
    \2\ Wisconsin Department of Workforce Development (DWD) Secretary 
Roberta Gassman's 3/27/06 letter to Wisconsin's Congressional 
Delegation
---------------------------------------------------------------------------
2.  It makes financial sense to invest in the Child Support Program
    County Child Support Agencies establish legal fatherhood for 
children born outside of marriage; until paternity is established, 
putative fathers have no legal obligation to support their children. In 
2006, county agencies established paternity for over 15,000 children in 
the State of Wisconsin.\3\ Potential staff cuts and the resulting 
increase in caseloads will have a serious impact on the counties' 
ability to timely establish paternity for these children.
---------------------------------------------------------------------------
    \3\ Wisconsin's Bureau of Child Support (BCS) 2006 statistics from 
Kids Information Data System (KIDS)
---------------------------------------------------------------------------
    The program in Wisconsin handles over 457,000 support cases per 
year; in 2006 payments of $940,153,416.00 were made through the 
Wisconsin Support Collection Trust Fund.\4\ Statewide, approximately $6 
are collected for every $1 spent on the program.\5\ This is a highly 
cost-effective program for the families who rely upon it.
---------------------------------------------------------------------------
    \4\ BCS 2006 statistics for Wisconsin Support Collection Trust Fund 
(WI SCTF)
    \5\ DWD Secretary Gassman's 3/27/06 letter to Congressional 
Delegation.
---------------------------------------------------------------------------
    Consistent collection of support stabilizes families, reducing 
demand on--and the cost of--public assistance programs. A study by the 
Urban Institute, commissioned by the Federal Office of Child Support 
Enforcement, concludes that for every dollar of child support that is 
distributed for TANF cases, there is a forty-cent cost avoidance ratio 
that offsets other federal benefit program expenses, such as Food 
Stamps, TANF, Medicaid, SSI and Housing. The ratio is nineteen-cents 
for every dollar collected in non-TANF cases. Child support collections 
produce a cost avoidance that results in significantly increased family 
self-sufficiency.\6\
---------------------------------------------------------------------------
    \6\ This study can be found at http://www.acf.dhhs.gov/programs/
cse/pubs/2003/reports/cost_avoidance/. Applying the findings of this 
study to Wisconsin's support collection numbers from 2006, significant 
cost avoidance savings result:
---------------------------------------------------------------------------
    Child Support is the only national program that systematically 
enforces health insurance orders for children, reducing the cost of 
medical assistance programs. In Wisconsin alone, there are over 350,000 
children for whom the county and tribal child support agencies are the 
health insurance watchdog: establishing and enforcing parents' legal 
obligation to provide health insurance when it is available from their 
employers at a reasonable cost.

3.  We are taking steps to mitigate the effects of DRA, but despite 
        mitigation there is a real potential for a downwad sprial in 
        proformance
    Reduced funding leads to decreases in program performance, which 
reduces performance funding, further decreasing performance, etc. 
Additionally, failure by a state to meet the federally required 
maintenance of effort reinvestment in the child support program may 
result in both federal incentive reductions and TANF penalties.\7\ The 
impact of hits against both programs would compound the devastating 
effects of DRA on low-income families.
---------------------------------------------------------------------------
    \7\ Wisconsin's Department of Workforce Development 2007-2009 
Biennial Budget, Re-Estimate Child Support Funding, p. 271
---------------------------------------------------------------------------
4.  WCSEA encourages you to support legislation to reverse DRA's child 
        support cuts
    The child support program directly impacts thousands of families--
reducing poverty and reliance on welfare, and supporting personal 
responsibility and self-sufficiency. We encourage you to support 
legislation to reverse the devastating cuts imposed by DRA, and allow 
us to continue to fulfill the critical role we play in the lives of 
Wisconsin's children and families.





2006 Collections                         Dollars Distributed       Savings per $1.00              Cost Avoidance
                                                                                                         Savings

Present Assistance cases                  $20,316,408               x .40                             $8,126,563
Former Assistance cases                  $220,863,260               x .19                            $41,964,019
Never assistance cases                   $361,752,320               x .19                            $68,732,940
                                         $602,931,988                                               $118,823,522



    The Urban Institute study attributes the following percentages of 
total cost avoidance savings by program*:




Food Stamps 37%                                 x $118,823,522                                     = $43,964,703
TANF 29%                                        x $118,823,522                                     = $34,458,821
Medicaid 23%                                    x $118,823,522                                     = $27,329,410
SSI 6%                                          x $118,823,522                                      = $7,129,411
Housing 6%                                      x $118,823,522                                      = $7,129,411



     *Percentages are rounded, so they total 101%

                                 
