[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
                        THE ROLE OF TANF PROGRAM
                    PROVIDING ASSISTANCE TO FAMILIES
                         WITH VERY LOW INCOMES

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

                                HEARING

                               before the

                  SUBCOMMITTEE ON INCOME SECURITY AND
                             FAMILY SUPPORT

                                 of the

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

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 11, 2010

                               __________

                           Serial No. 111-42

                               __________

         Printed for the use of the Committee on Ways and Means



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                      COMMITTEE ON WAYS AND MEANS
            INCOME SECURITY AND FAMILY SUPPORT SUBCOMMITTEE

                  JIM MCDERMOTT, Washington, Chairman

FORTNEY PETE STARK, California       JOHN LINDER, Georgia, Ranking 
ARTUR DAVIS, Alabama                 Member
JOHN LEWIS, Georgia                  CHARLES W. BOUSTANY, Jr., 
SHELLEY BERKLEY, Nevada              Louisiana
CHRIS VAN HOLLEN, Maryland           DEAN HELLER, Nevada
KENDRICK B. MEEK, Florida            PETER J. ROSKAM, Illinois
SANDER M. LEVIN, Michigan            PATRICK J. TIBERI, Ohio
DANNY K. DAVIS, Illinois

             Janice Mays, Chief Counsel and Staff Director

                   Jon Traub, Minority Staff Director

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
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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

                               WITNESSES

Advisory as of April 15, 2010 Announcing the Hearing.............     2
The Honorable Gwen Moore, a Representative from the State of 
  Wisconsin......................................................    53

                                 ______

The Honorable Carmen Nazario, Assistant Secretary for Children 
  and Families, U.S. Department of Health and Human Services, 
  Administration for Children and Families.......................    12

                                 ______

Kay E. Brown, Director, Education, Workforce, and Income 
  Security, U.S. Government Accountability Office................    37
Mr. Russell Sykes, Chair Person, National Association of State 
  TANF Administrators Center for Employment and Economic 
  Supports, OTDA, Albany, New York...............................    63
Peter Edelman, J.D., Professor of Law, Georgetown University Law 
  Center.........................................................    82
Mr. Robert Rector, Senior Research Fellow, Domestic Policy, The 
  Heritage Foundation............................................    88

                       SUBMISSIONS FOR THE RECORD

Christina Schnetzer..............................................   132
Danny Flynn, Best Friends Foundation.............................   133
Legal Momentum...................................................   134
Rochelle Jackson, Just Harvest...................................   139
Crystal Agnew, Trinity Church Peacemakers Family Center..........   144
Vikki Finley.....................................................   151
Agnes Zarcaro, Project Corazon...................................   153
Earl Gardner, VFC Fatherhood Program.............................   155
Newton Sanon, OIC of Broward County, INC.........................   157
Richard Albertson, Live the Life.................................   164
James Mason, Beech Acres Parenting Center........................   166
Linda Stacey, The Child Abuse Council, Inc.......................   168
Phyllis Beckman, Operation Us....................................   169
Carol Jones, You&Me.We...........................................   171
Alicia La Hoz, Family Bridges....................................   173
Frank Fincham, Florida State University Family Institute.........   176
Greg Schutte, Marriage Works! Ohio...............................   178
Sherron Parrish, Center for Healthy Marriages and Families.......   181
Deborah Irwin, Operation Us......................................   183
Virginia Datema, Operation Us....................................   185
Catherine Sullivan...............................................   186
Joneen Mackenzie, WAIT Training..................................   188
M.P. Wylie, Relationship Research Foundation, Inc................   190
Lavern Nissley, Marriage Resource Center of Miami Valley.........   195
Dina Kastner, National Association of Social Workers.............   196
Bridget Brennan, St. Louis Healthy Marriage Coalition............   206
Alyce Davis......................................................   208
Jennifer Baker, Center for Professional Solutions................   209
Kevin Aslanian, Coalition of California Welfare Rights 
  Organizations, Inc.............................................   211
Megan Krukonis...................................................   219
John Sciamanna, Child Welfare League of America..................   221
Stephanie Mckeen.................................................   229
Julie Kashen, Single Stop USA....................................   230
Brenda Beal, Community Voices Heard..............................   236
American Association of University Women.........................   238
Donald Roberts, Goodwill Industries Masota, Inc..................   241
Spotlight on Poverty and Opportunity.............................   245
The Honorable Shelly Berkley.....................................   247


                        THE ROLE OF TANF PROGRAM
                    PROVIDING ASSISTANCE TO FAMILIES
                         WITH VERY LOW INCOMES

                              ----------                              


                        THURSDAY, MARCH 11, 2010

             U.S. House of Representatives,
                       Committee on Ways and Means,
        Subcommittee on Income Security and Family Support,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:10 a.m. in 
1100 Longworth House Office Building, the Honorable Jim 
McDermott [chairman of the subcommittee] presiding.
    [The advisory announcing the hearing follows:]

HEARING ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS

 McDermott Announces Hearing on TANF's Role in Providing Assistance to 
                          Struggling Families

March 4, 2010

    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 evaluate 
the role of the Temporary Assistance for Needy Families (TANF) program 
in providing assistance to families with little or no income. The 
hearing will take place on Thursday, March 11, 2010, at 10:00 a.m. in 
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. However, any individual or organization 
not scheduled to appear may submit a written statement for 
consideration by the Subcommittee and for inclusion in the record of 
the hearing.
      

BACKGROUND:

      
    The TANF block grant provides fixed-funding to the States for 
several purposes including to ``provide assistance to needy families so 
that children can be cared for in their own homes or in the homes of 
relatives.'' In 2008 (the most recent data available), fewer than one 
out of every four poor children received cash assistance through the 
TANF program, a steep drop compared to the percentage receiving such 
aid in the mid 1990s. TANF caseloads (nationwide) climbed modestly last 
fiscal year in response to the worst recession in many decades, but 
this small rise significantly lagged the increased participation in 
other programs designed to respond to rising need, such as food stamps 
and unemployment benefits.
      
    The American Recovery and Reinvestment Act provides up to $5 
billion to help States respond to rising TANF caseloads and to 
establish and/or expand subsidized employment programs. Funding for 
this TANF emergency contingency fund currently expires on September 
30th.
      
    In announcing the hearing, Chairman McDermott stated, ``During this 
time of great hardship, it is more important than ever to have a safety 
net that truly protects struggling families. However, our Nation's 
primary program providing financial assistance to very low-income 
families--Temporary Assistance for Needy Families--doesn't provide 
assistance to over three-quarters of America's poor children. That's 
not temporary assistance--it's no help at all for the vast majority of 
our most vulnerable children and families. We need to work on both 
immediate steps and longer-term solutions to ensure a helping hand for 
those who need it most.''
      

FOCUS OF THE HEARING:

      
    The hearing will focus on the role of the TANF program in providing 
assistance to families with very low incomes.
      

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FORMATTING REQUIREMENTS:

      
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    Chairman MCDERMOTT. Good morning. Sorry I am late and for 
those of you who came to testify, I apologize for us moving 
this back an hour. The leadership is about to roll out a health 
care bill, I hear. We have been hearing that for a long time.
    They called what they call a mandatory caucus. For 
Democrats, I do not know what that means. We do not line up 
very well.
    We are here today to start a new conversation about the 
role of TANF in providing assistance to struggling families, 
especially during this time of great hardship for many 
Americans.
    The starting point is this question. Do poor children 
deserve our help as their parents struggle to find and prepare 
themselves for employment.
    I believe that the majority of Americans would say yes to 
that question. It may, therefore, come as unwelcome news to 
them that only 22 percent of poor children receive assistance 
from the TANF program, the Temporary Assistance for Needy 
Families program, in this country.
    Furthermore, they may be concerned to hear that TANF seems 
far less responsive to the growing need than any other safety 
net program, such as food stamps or unemployment insurance.
    If you look at that graph, the top line is food stamps, and 
you can see it is going up. You can see unemployment is going 
up, the yellow line. The flat line at the bottom is the 
caseload nationally in TANF. Very little has happened since the 
recession started in November of 2007, while the other programs 
obviously have been going up.
    The number of households receiving food stamps, which are 
now known as ``SNAP'' benefits, went up close to six million. 
The number of individuals receiving unemployment benefits 
increased by eight million. The number of families receiving 
TANF benefits have increased by less than a quarter of a 
million since the start of the recession.
    We are likely to hear today a host of reasons for this very 
poor and low participation rate, but I believe the main 
underlying cause is the presumption that declining caseloads is 
always a measure of success.
    Specific features of the TANF program such as the caseload 
reduction credit, not to mention over a decade of rhetoric from 
every level of Government, has driven this contention into the 
human consciousness.
    We all want TANF caseloads to go down because more parents 
working and moving into jobs is a good idea, but if caseloads 
go down or stay flat, even as unemployment and poverty go up, 
then that should never be anyone's definition of success. If it 
is, we might as well completely eliminate the TANF program 
right now. We would then have a caseload of zero. That would be 
perfect success.
    Expecting a program for needy families to respond to a huge 
increase in needy families should be a bipartisan expectation. 
Nevertheless, I know some of my colleagues on the other side of 
the aisle may be tempted to say that helping more families 
through TANF will reduce the program's emphasis on work.
    However, the exact opposite is true. There are six people 
out there looking for every job in this country, and providing 
temporary assistance to more families in great need will also 
mean engaging more parents in work related activities and 
services.
    The alternative is to continue to ignore these families as 
they struggle to create a better life for their families and 
perhaps wait for their children in Child Protective Services.
    There are some steps we can take immediately to help more 
families and to help promote better work. The most obvious is 
the need to fund the TANF emergency fund which we put into the 
Recovery Act, and we have now got some money going into it 
shortly, we hope, which provides states money to respond to the 
rising need of this assistance and to establish and expand 
subsidized employment programs.
    Twenty-three states are already using the contingency fund 
money for the establishment of programs of employment.
    A broader discussion is needed on how other features of the 
TANF program affect this issue. Hopefully, this hearing will 
shed some light on all that.
    I now yield to my Ranking Member, Mr. Linder. John.
    [The information referred to follows:]

    [GRAPHIC] [TIFF OMITTED] T3034A.001
    
    [The prepared statement of Mr. McDermott follows:]

              Prepared Statement of Chairman Jim McDermott

    We are here today to start a new conversation about the role of the 
TANF program in providing assistance to struggling families, especially 
during this time of great hardship for many Americans.
    The starting point is this question: do poor children deserve our 
help as their parents struggle to find or prepare themselves for 
employment?
    I believe the vast majority of Americans would say yes to that 
question. It may therefore come as unwelcome news to them that only 22% 
of poor children receive assistance from the Temporary Assistance for 
Needy Families or TANF program.
    Furthermore, they may be concerned to hear that TANF seems far less 
responsive to the growing need than other safety net programs, such as 
Food Stamps or Unemployment Insurance.
    As you can see by the chart in front of you, the TANF program has 
moved very little since the recession started in December of 2007, 
while other programs have been much more responsive.
    The number of households receiving food stamps, which are now known 
as SNAP benefits, went up by close to 6 million. The number of 
individuals receiving unemployment benefits increased by nearly 8 
million.
    But the number of families receiving TANF has increased by less 
than one-quarter of a million since the start of the recession.
    We will likely hear today a host of reasons for this very low 
participation rate, but I believe the main underlying cause is the 
presumption that declining caseloads always equal success.
    Specific features of the TANF program, such as the caseload 
reduction credit, not to mention over a decade of rhetoric from every 
level of government, have driven this contention.
    We all want TANF caseloads to go down because more parents are 
moving into good jobs. But if caseloads go down or stay flat, even as 
unemployment and poverty go way up, that should never be anyone's 
definition of success.
    If it is, we might as well completely eliminate the TANF program 
right now. We would then have a caseload of zero--a perfect success.
    Expecting a program for needy families to respond to a huge 
increase in needy families should be a bipartisan expectation.
    Nevertheless, I know some of my colleagues on the other side of the 
aisle will be tempted to say that helping more families through TANF 
will reduce the program's emphasis on work.
    However, the exact opposite is true.
    Providing temporary assistance to more families in great need will 
also mean engaging more parents in work-related services and 
activities.
    The alternative is to continue to ignore these families as they 
struggle to create a better life for their children.
    There are some steps we can take immediately to help more families 
and to better promote work.
    The most obvious is to continue the TANF Emergency Fund, which now 
provides funds to help States respond to the rising need for assistance 
and to establish or expand subsidized employment programs.
    A broader discussion is needed on how other features of the TANF 
program affect this issue. Hopefully today's hearing will begin to shed 
light on that topic.
    I now yield to the Ranking Member, Mr. Linder.

                                 

    Mr. LINDER. Thank you, Mr. Chairman. Thank you for calling 
this hearing today.
    This subcommittee has had five solo hearings in the last 
year. The first was last March entitled ``Protecting Low Income 
Families While Fighting Global Warming.''
    Our Democrat colleagues discussed their plan to create the 
largest welfare program in American history, called ``Energy 
Stamps.'' The policy found its way into the House-passed energy 
tax hike, and thankfully has appeared to have died in the 
Senate. Since then, 2.5 million more jobs disappeared.
    Our second hearing on the Democrats' 2009 stimulus law was 
in April. That was a bill promising to create 3.7 million jobs. 
It was about jobs, jobs, jobs, as the Speaker said. Since then, 
the number of unemployed workers has soared 21 percent to a 
record 16 million.
    Our third hearing last June was on a new $8 billion 
entitlement program that was stuffed into their trillion dollar 
health bill. Since then, an unprecedented six million people 
gave up trying to find a job and dropped out of the labor 
force.
    Our fourth hearing last September was on foster care and 
adoption changes. A worthy task, but presumably foster and 
adoptive youth will want jobs as they become adults, too. Since 
then, the unemployment rate among people under 25 has reached a 
staggering 19 percent.
    Our fifth hearing on the safety net was in October. As 
Chairman McDermott said, ``It goes without saying that job 
creation is our first priority. Since then, the total job 
losses after stimulus reached 3.3 million.''
    Given the incredible gap between our hearings and reality, 
perhaps it should not be surprising that today the hearing is 
about the Democrats' desire to increase welfare rolls. Which 
they claim will somehow create jobs, presumably just like their 
stimulus bill did. Which is to say it will not and it will 
instead make matters worse.
    To be fair, the Democrats have already tried increasing the 
welfare rolls but apparently it has not worked as well as they 
had hoped. The latest data suggests the welfare rolls have 
grown about five percent since the stimulus law passed and ten 
percent since the recession began. So I should give them their 
due and say they are now trying to increase the welfare rolls 
even more.
    Last year's stimulus bill had $5 billion in new welfare 
funds, including if states increased their welfare rolls. 
According to the latest HHS figures, states have tapped less 
than a third of that $5 billion, mostly because they do not 
want to spend more of their own money. Washington can fix that.
    Now Democrats propose billions more in welfare funds for 
states and making that money 100 percent Federally funded 
because unlike states that actually must balance budgets, 
Washington can spend any amount on anything, provided we call 
it an ``emergency.''
    As we will hear from Robert Rector of The Heritage 
Foundation, there are two real goals here. First, accelerating 
spending on welfare in the name of stimulus, and second, repeal 
the successful 1996 welfare reforms, which led to less welfare 
dependence and poverty through more work and earnings.
    Mr. Chairman, Americans want us to work together to solve 
problems. We should not cause more problems. Instead of bribing 
states to increase welfare rolls, or make fund make-work that 
will go away as soon as the funding ends, we should help more 
low income parents train for, look for, find and keep real jobs 
the a real economy to support their family. That is what the 
1996 reforms did. Returning to the previous failed system will 
lead to more poverty and despair, not less, and we should not 
do it.
    Thank you.
    Chairman MCDERMOTT. Thank you very much. I will ask 
unanimous consent to enter into the record the letter from the 
National Governors Association imploring the Congress to extend 
the emergency contingent fund.
    [The information referred to follows:]

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    [The prepared statement of Mr. Linder follows:]

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    Chairman MCDERMOTT. They are using the money. It is not 
just Republicans or Democrats. It is both. I think even Haley 
Barbour, and I was surprised to see his name, but he is using 
this money in his state. We will have a hearing on that down 
the road.
    We will first start with Ms. Nazario, who is here. Please 
come and take a seat up here. We were going to have 
Representative Gwen Moore from Wisconsin but she is over in the 
mandatory caucus under lock and key or something.
    We will begin with you. Assistant Secretary Nazario is the 
Secretary for Children and Family Services of HHS. Ms. Nazario.

 STATEMENT OF CARMEN NAZARIO, ASSISTANT SECRETARY FOR CHILDREN 
  AND FAMILIES, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, 
            ADMINISTRATION FOR CHILDREN AND FAMILIES

    Ms. NAZARIO. Thank you, Mr. Chairman and Members of the 
Subcommittee. I am pleased to appear before you today to 
discuss the Temporary Assistance for Needy Families program and 
its role as part of the nation's safety net.
    Given the time constraints this morning, I will read a 
brief statement and submit my long statement for the record.
    It is fitting that my first hearing as Assistant Secretary 
for Children and Families is before the Subcommittee, since you 
have shown such commitment to helping families in poverty, 
including support for the significant changes made by the 
Recovery Act.
    We are witnessing dramatic results from these changes, 
including the development of innovative subsidized employment 
programs that are giving thousands of out of work parents what 
they most want and need, a job.
    Unfortunately, unemployment remains high as does the need 
for subsidized jobs and assistance to families.
    Thus, the President's budget calls for a one-year extension 
of the TANF Emergency Fund. I want to thank the Chairman for 
introducing H.R. 4564 which provides a one-year extension and 
makes important improvements to the emergency fund based on the 
experience of the past year.
    This extension will provide a powerful tool for states to 
create jobs and reduce hardship until the economy gets back on 
its feet.
    The TANF program is one of the nation's primary safety net 
programs for low income families with children. Under TANF, 
states have broad flexibility to design programs that promote 
work, personal responsibility and self sufficiency and 
strengthen families.
    In the early years of implementation, unemployment among 
single mothers rose. Unfortunately, these positive trends have 
not been sustained. By 2008, the child poverty rate had risen 
to 19 percent and the percentage of poor single mothers that 
did not work and did not receive assistance increased from 16 
to 35 percent.
    Last year, the President signed the Recovery Act which 
included significant legislative provisions to bolster the 
safety net for low income children and families.
    This legislation impacted the TANF program in several key 
ways, including the establishment of a new $5 billion emergency 
fund supporting basic assistance, short term needs, and 
subsidized employment to help families during an economic 
downturn.
    Today, 41 states and 12 tribes have received emergency 
funds for a wide range of programs.
    Just to highlight a few that might be of interest to the 
Subcommittee, Michigan offers payments to domestic violence 
shelters and refundable state earned income tax credit 
payments.
    Maryland funds a homeless counselor's program and Alabama 
provides case management services related to child welfare 
activity.
    The most exciting category from a job creation perspective 
is subsidized employment. More than 18,000 jobs have been 
established and by the end of the fiscal year, this number 
could grow to 120,000, making it the most extensive use of 
subsidized employment in the history of the TANF program.
    San Francisco's subsidized employment program has been 
expanding due to the positive response from potential employers 
and employees. Its original goal of 1,000 placements has been 
increased to 2,000.
    Florida has hired 75 temporary workers from their TANF 
eligible caseload to serve as call agents in a new state center 
set up to handle increased volume of public assistance 
inquiries. The state is about to expand the initiative to a 
broad spectrum of public and private organizations.
    Georgia will subsidize 100 percent of the wages in its Teen 
Work Program, offering Summer jobs for youth who are in foster 
care, are developmentally disabled, or part of the state's 
Grandparents Raising Grandchildren program.
    Although there are encouraging signs that an economic 
recovery is underway, serious challenges to sustain employment 
remain. Without action by Congress to extend availability of 
the emergency fund, states will soon begin to scale back this 
critical support effort.
    In closing, I would like to mention the administration's 
proposal for a new $500 million investment in the creation of a 
Fatherhood, Marriage and Families Innovation Fund to encourage 
and rigorously evaluate demonstrations of proven and promising 
strategies to help fathers and mothers succeed both in the 
labor force and as parents.
    I appreciate the Subcommittee's work in supporting 
responsible fatherhood efforts and particularly the leadership 
of Congressman Davis on this important issue.
    States continue to face budget shortfalls and the impact of 
high unemployment rates. The Recovery Act took important steps 
to shore up the economy and provide aid to those who have borne 
the harshest impacts of the recession, and help states maintain 
critical services, but the job is not finished, too many people 
remain out of work and too many families struggle to make ends 
meet.
    I look forward to working with the Subcommittee to ensure 
that states can continue their innovative subsidized jobs 
programs and to strengthen TANF child care and child support 
efforts.
    I will be happy to answer any questions.
    [The prepared statement of Ms. Nazario follows:]

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    Chairman MCDERMOTT. Fabulous testimony. Ten seconds over. 
Wonderful. We will invite you back.
    [Laughter.]
    Chairman MCDERMOTT. Mr. Linder, would you desire to 
inquire?
    Mr. LINDER. Ms. Nazario, the President's budget proposal 
this year indicates they want to delay the re-authorization of 
TANF for another year. Why is that?
    Ms. NAZARIO. We have been through this very tough economic 
period of time and we are learning a lot about how states are 
able to respond to these changing needs and to the various 
needs of families.
    I think that working with Congress and particularly with 
the innovative approaches that we have in the 2011 budget, we 
will be able to have better information that will guide us in 
improving the program even more for where we need to go to help 
families.
    Mr. LINDER. Coming on the next panel is Robert Rector of 
The Heritage Foundation, and he says ``By fiscal year 2011, 
total Government spending on means-tested aid will rise to $953 
billion, nearly a 50 percent increase since fiscal year 2007.''
    He said ``Dividing total means-tested aid by all persons 
with incomes below 200 percent of the poverty level results in 
average welfare spending of $7,700 per person, roughly $30,000 
for a family of four.''
    First, have you had a chance to review that testimony or 
that statement?
    Ms. NAZARIO. No, sir. I have not.
    Mr. LINDER. Is it your testimony that $953 billion is not 
enough?
    Ms. NAZARIO. Who is to say what is enough. I think the 
important thing is that these programs are set up to help 
families and children in need so they can become self 
sufficient and contributing members of our community.
    We have allowed our society at many levels of Government 
the opportunity to assist people with Government funding or tax 
credits and these are just opportunities for us to continue to 
serve the most vulnerable members of our society.
    Mr. LINDER. You said who is to say what is enough. Is 
anybody to say how much is enough?
    Ms. NAZARIO. I think together the Congress and the 
administration can work towards understanding the situation so 
that we can develop programs that really meet the needs of 
families.
    I think TANF has demonstrated through the years that cash 
assistance is not the preponderant service that it used to be, 
so it has demonstrated that we can develop our thinking and 
provide assistance in work support and other means that can 
help families towards self sufficiency without maintaining the 
modalities of just cash assistance.
    I think together, we can work towards a path that is 
responsive to families and responsible with public funds.
    Mr. LINDER. There has been a fairly large increase in food 
stamps and an extension of unemployment insurance. Some of that 
is going to people qualifying for TANF also. Do you not 
consider that cash assistance?
    Ms. NAZARIO. These other programs have a much larger 
eligible pool than TANF. TANF is a $16.5 billion fund. Even 
together with all state dollars, it is a $28 billion fund. 
Those other programs like unemployment insurance and child 
support or mortgage interest credits, tax credits for 
taxpayers, I am not sure where we draw the line.
    I think while TANF is one of the most important safety net 
programs, it is modest in relation to other much more 
comprehensive programs in terms of eligible pools.
    Mr. LINDER. Thank you, Mr. Chairman.
    Chairman MCDERMOTT. Thank you, Mr. Linder.
    My understanding is that the increase that Mr. Linder is 
talking about largely is increased spending on Medicaid, that 
Medicaid's funding is really the big item that has increased 
over the last number of years. Is that correct?
    Ms. NAZARIO. I am not prepared to answer that question. I 
can get an analysis for you. I have not seen Mr. Rector's 
testimony.
    Chairman MCDERMOTT. I have a chart in front of me that 
shows 49 percent of the increase in spending is limited to 
people on Medicaid. That is almost half the money goes to the 
medical situation. It would be good to have confirmation from 
the Department on that.
    Ms. NAZARIO. I will certainly do that.
    Chairman MCDERMOTT. I think I had better withhold my 
questions although I have one question I would like to ask you.
    Tell me the kinds of programs that people are creating jobs 
in. A lot of people have always felt like well, welfare, they 
just do make work, there is some kind of give them a sharp 
stick and go out and pick up papers or something.
    Tell me the kinds of programs that have been developed by 
states in terms of both public and private use of the money. I 
know there have been a lot of states that have used it all for 
private jobs.
    Ms. NAZARIO. I mentioned a few in my short testimony. I 
think I was trying to give you a flavor, Mr. Chairman, of the 
variety of activities that are being employed by the states in 
the subsidized employment programs, from Government workers 
assisting people in need who are applying for assistance to 
Summer youth programs for teens to grandparents who are raising 
children, to handling child protective services and child 
welfare situations, to various forms of community jobs, case 
management services, also jobs in the private sector and even 
in the for profit sector as well as non-profit.
    Chairman MCDERMOTT. I appreciate your testimony. We will 
have you back. This will not be our only hearing on this issue 
as we move toward re-authorization.
    Thank you very much for coming.
    Ms. NAZARIO. Thank you, sir.
    Chairman MCDERMOTT. Our next panel, if they would take 
their seats at the table. As with Secretary Nazario's written 
testimony, her testimony will be entered into the record, and 
so will all of yours. I hope you will use your time in some 
other way than just reiterating what is in there.
    Our first witness is Kay Brown. She is the Director of the 
Education, Workforce and Income Security part of the GAO. She 
has done a report.
    Ms. Brown.

 STATEMENT OF KAY E. BROWN, DIRECTOR, EDUCATION, WORKFORCE AND 
     INCOME SECURITY, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. BROWN. Mr. Chairman and Members of the Subcommittee, 
thank you for inviting me here today to discuss our work on the 
TANF program and its assistance to low income families.
    My remarks are based on our GAO report that was released 
today. I would like to talk about four findings from this 
report.
    First, we studied the significant decline in the TANF cash 
assistance caseload from 1995, the year before welfare reform, 
to 2005, the most recent year for which we had data.
    The solid line on this graph depicts the number of families 
receiving cash assistance. We found that a small part, about 13 
percent of the decline, occurred because fewer families were 
eligible for cash assistance, either because of changes to 
eligibility rules or because of increased family incomes, which 
resulted from the strong economy in the 1990s, TANF's focus on 
work, increases in the minimum wage, and other factors.
    A much larger share of the caseload decline, 87 percent 
overall, resulted from a decline in the number of eligible 
families who participated in the program, and these you can see 
in the shaded area in the graphic.
    In fact, while 84 percent of eligible families received 
cash assistance in 1995, only 40 percent did in 2005. This drop 
likely results from families' responses to changes in state 
welfare programs, such as mandatory work activities, time 
limits, sanctions and diversion strategies and the value of 
cash benefits.
    Second, we asked what if the participation rate of eligible 
families was the same in 2005 as it was in 1995, that is what 
if the rate was 84 percent instead of 40 percent.
    We found that if this were the case, 800,000 fewer children 
would be in extreme poverty with incomes below half the Federal 
poverty level. Further, an estimated 3.3 million families would 
gain TANF benefits and would experience an increase in their 
net income.
    However, this increase would not significantly change the 
number of children in poverty overall, in part, because TANF 
benefits are typically too low to raise the incomes of 
participating families above poverty.
    Third, we compared the characteristics of families 
participating in TANF cash assistance in 2005 to those eligible 
but not participating that year, and we found that although all 
eligible families had low incomes, those not participating in 
TANF generally worked more, had relatively higher incomes, and 
were less likely to receive other public support.
    However, we did identify a subgroup of eligible non-
participating families who did not work or receive supplemental 
security income benefits. These families were more 
disadvantaged with lower incomes than families participating in 
TANF, and as shown on the graphic before you, this subgroup 
accounted for 11 percent of all eligible families in 2005 or 
about 732,000 families.
    Fourth, we gathered information on the changes that 21 
states were experiencing in caseloads and TANF related spending 
in the current recession. In 12 of these 21 states, the number 
of families receiving TANF cash assistance increased between 
June 2008 and June 2009.
    However, changes in caseloads varied widely by state. For 
example, in one state, the caseload increased by 22 percent 
while in another it decreased by nine percent.
    Further, we found no clear association between the change 
in TANF caseloads in the states and unemployment rates in this 
time frame. Unemployment is one of many factors that may affect 
a state's caseload, including specific TANF program 
characteristics.
    In the recession, states reported drawing on their reserve 
funds, TANF contingency funds, which are now depleted, as well 
as the emergency contingency fund created by the Recovery Act.
    Since the time of our state review, conditions have 
continued to deteriorate and the full effect of changes in the 
economic climate on TANF cash assistance programs is unknown.
    This concludes my prepared statement. I would be happy to 
answer any questions you or other Members of the Subcommittee 
may have.
    [The prepared statement of Kay E. Brown follows:]

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    Chairman MCDERMOTT. Thank you very much.
    Mr. Sykes, I would ask you if you would yield for a second 
to have my distinguished colleague, Ms. Moore, come up to the 
table. She managed to escape from that mandatory caucus. I 
would like to give her an opportunity. She was supposed to 
start off this whole thing.
    Gwen, you are on for five minutes. Your whole statement 
will be in the record. Say whatever you would like for five 
minutes.
    Ms. MOORE. Thank you so much, Mr. Chairman. It is certainly 
my privilege to be here with this very distinguished panel.
    I will leave my testimony to be entered in full into the 
record and I would also like to ask your consent, unanimous 
consent, to put any other materials that I may refer to in the 
record as well.
    Chairman MCDERMOTT. Without objection.

  STATEMENT OF THE HONORABLE GWEN MOORE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF WISCONSIN

    Ms. MOORE. Thank you. We are here today talking about the 
systematization of poverty, I think. Many of you already know 
the history of welfare reform. I can say I was at the scene of 
the crime in Wisconsin when we ended welfare as we knew it.
    Critics of the AFDC program really talked about all the 
welfare queens that were on welfare, the moral hazard involved 
in giving aid to people who were not working. Others talked 
about how we were trapping people into a cycle of poverty by 
not forcing them to work. Some even went as far as to say we 
were driving males away from the home and alienating male 
participation in the household.
    One of the real clear focuses of ending welfare was to 
declare that only work benefits families and that only work 
begets work, and they were very critical of education and 
training programs in which many women were engaged.
    Indeed, on the day we passed welfare reform in Wisconsin, 
10,000 women across the State of Wisconsin were thrown out of 
their educational programs, even high school programs.
    The promise of TANF, of course, was to end the entitlement 
and to block grant the funds locking in the maintenance of 
effort, giving states flexibility, which in the case of 
Wisconsin in the first year of those contracts ended up with 
about $18 million of bonuses that were paid to CEOs in our 
privatized welfare system. It rewarded states and created a 
very perverse incentive to decrease the rolls. It severely 
restricted education and training.
    You will hear testimony here today, Mr. Chairman, about how 
there has been a tremendous increase in the SNAP program, the 
food stamp program, and even in this very harsh recession where 
we see childhood poverty accelerating, where we see 
unemployment, intractable unemployment, where we see the 
stimulus proposal provide contingency funds that have rescued 
states from the increase in Medicaid and poor people, that the 
TANF rolls have remained flat. They have remained flat because 
in fact this program is not responsive to a recessionary 
problem.
    There are a few things that I want to emphasize. Number 
one, I think when we consider re-authorization, we should look 
very carefully at a few things.
    First of all, we should look very carefully at the 
education and training programs. Here we are changing our 
economy, focusing on energy, jobs, jobs of the 21st Century, 
and the kinds of jobs that women were able to get, jobs that 
were temporary jobs, the kinds of pink collar jobs that women 
always get. They certainly were not jobs that were sustaining 
in any way.
    We should work very, very hard to re-authorize a TANF 
program that will focus on eliminating poverty rather than just 
kicking women off the rolls, and providing them with 
experiences that will give them a career ladder.
    We should also look at increasing the maintenance of 
effort, both from the Federal level and the state level. The 
1996 levels certainly as we can see from our experience have 
not been enough.
    We ought to look at child care, which is this bottomless 
pit of need. There are many states that do not even keep 
waiting lists. This is an area where we are forcing women into 
the workforce and not necessarily providing them with safe 
child care.
    We should re-authorize the TANF program and guarantee women 
child care.
    We also need to make sure that for victims of domestic 
violence states are required to provide options to women who 
face domestic violence, and there ought to be programming to 
help them escape domestic violence treatment, and not just the 
option of returning to their abusers.
    I can see that my time is waning. I do want to point out 
that I very, very much support many of the recommendations that 
have been made by the Center for Law and Social Policy, also 
known as CLASP, for re-authorization purposes, and with that, I 
will yield back.
    [The prepared statement of the Honorable Ms. Moore 
follows:]

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    Chairman MCDERMOTT. Thank you very much for your testimony. 
We have about eight minutes until this vote, so we probably 
have about 13 or 14 minutes to get to the floor.
    You came all the way from Albany, and I feel bad not giving 
you five minutes, but you two guys are local and we will get 
you back on another day.
    Mr. Sykes, who is the Chairperson for the National 
Association of State TANF Administrators from Albany, New York.
    Mr. Sykes.

 STATEMENT OF RUSSELL SYKES, CHAIRPERSON, NATIONAL ASSOCIATION 
                  OF STATE TANF ADMINISTRATORS

    Mr. SYKES. Thank you, Mr. Chairman, and thank you, Ranking 
Member Linder. I am very proud to represent the 50 state TANF 
directors and territories in talking to you today.
    In the interest of time, I will focus just on three areas; 
the critical need to extend and replenish the TANF emergency 
contingency fund; try to answer your question about whether 
TANF has been responsive to the recession, and ask if the 
question is premature, and how we should measure performance, 
and finally, states' concerns with postponing a full re-
authorization discussion this year.
    The emergency contingency fund was the right response at 
the right time, and I will tell you that my state, when the 
final quarter ends on September 30 of this year, will access 
all $1.2 billion available to us under both the regular and 
emergency contingency fund.
    In fact, a large amount of that is going to subsidize 
employment and one time payments, not simply caseload 
reimbursement.
    Some have been concerned about the slower start in 
accessing these funds, but candidly, start up in a new program 
such as this, and as helpful as HHS was, requires guidance 
whcih takes some time. Program rules take time to assimilate, 
and states did have to put up 20 percent funding of their own 
at a time of huge deficits in order to access the fund.
    I will say to you that subsidized employment particularly 
takes start up time. We are trying to fill 5,000 slots in New 
York of subsidized jobs at a time when our unemployment rate is 
almost ten percent.
    States have put great infrastructure in place. And we are 
in agreement as to why we can we not wait until later for the 
ECF to be replenished. None of our placements are for less than 
90 days and longer.
    In fact, we will have to begin to dismantle some of these 
programs as of July 1 at the latest, discouraging employers 
further. Frankly, subsidized employment is critical because it 
reinforces the work message at a time when jobs are scarce.
    We simply need an extension. We were very disappointed with 
the action that was taken on procedural grounds in the Senate 
two days ago. Mr. McDermott, we know frankly you and the 
administration both have proposals to extend the fund.
    States are in desperate need of this money. We spend it 
wisely. We track it wisely. We are really trying to help people 
through a difficult time.
    The second point is you have asked how TANF has responded 
to this recession. Let me say clearly that states, if there is 
indeed a problem, will study it and want to know more about it. 
We want to see further research and we want to help craft a 
solution if necessary.
    We ask three things. Please do not rush to judgment on 
access problems. Please do not assume that states are limiting 
access. Please do not undermine the core message of TANF being 
work focused. It is a false choice because we can have both 
strong work rules and program access.
    I can tell you that in my state when families provide 
necessary documentation and comply with the rules of the 
program, they get benefits.
    I also want to tell you that the existence of extended 
unemployment insurance benefits, the supplemental nutrition 
assistance program, child support collections, many of them for 
people previously TANF or never on TANF, provide a buffer 
before assistance is often needed from the TANF program.
    The GAO report today shows that TANF can respond in many 
ways beyond offering permanent assistance. Clients themselves 
are often not seeking ongoing assistance as indicated by the 
explosiveness of one time payment, transactions to help with 
utility costs, prevent eviction, repair cars, secure 
transportation, provide stop gap child care, and numerous other 
forms of help.
    Clients also want jobs, help finding them or subsidized 
employment opportunities. Many clients would get very small 
benefit from ongoing assistance and the transaction costs of 
navigating the program rules simply do not appeal to them when 
they have other avenues available. Others simply do not want to 
comply with work requirements.
    The most important point I want to make is I think TANF is 
a lagging indicator of the recession. I think we are too early 
in asking the question about its responsiveness.
    I think we expect in the next 12 to 24 months to see the 
caseload continue to grow as unemployment benefits begin to 
expire, even though other programs will remain available, I 
think we are just seeing the tip of the iceberg.
    I would hope we would look at some of these things, not 
create invalid measures, until we have a little maturation of 
the process.
    Finally, I will also say as my time is waning, that we were 
very disappointed frankly as states that we are not having a 
full re-authorization discussion this year because it is only 
in that context that we can answer some of the questions that 
you pose.
    We know your plates are full but there are issues around 
TANF, including the erosion of the real dollar value of the 
block grant, state flexibility that has been greatly taken 
away, program focus on rules that make it difficult, continued 
unrealistic 90 percent two parent work rates, and I could go on 
and on, but I will not because my time is ending.
    I am happy to take any questions you may have.
    [The prepared statement of Mr. Sykes follows:]

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    Chairman MCDERMOTT. Thank you very much for your testimony. 
Your full testimony will be in the record.
    Mr. Edelman and Mr. Rector, each of you will have three 
minutes.
    Mr. EDELMAN. Everybody knows him. He was here when welfare 
was being reformed and knows what it was like before and after.
    Peter.

STATEMENT OF PETER EDELMAN, J.D., PROFESSOR OF LAW, GEORGETOWN 
                     UNIVERSITY LAW CENTER

    Mr. EDELMAN. Thank you, Mr. Chairman. I am glad to have the 
opportunity to testify before you and Mr. Linder.
    I just want to say a couple of things. Welfare caseloads 
actually fell in 20 states in 2008, and it seems to me that 
there is something wrong with that picture when we are in the 
middle of a recession.
    This is about women and children. It is about children and 
women.
    The welfare rolls are now down from the peak in 1994 from 
about 14 million to just over under 4 million people. That is 
one and a third percent of the population of this country. That 
is only a tenth of the number of people who are counted as poor 
in this country. Of course, some of those are elderly and so 
on. Still, it is a tiny fraction.
    In 1991, 12 percent of poor women in this country had no 
job and no welfare. It is now 34 percent. At the same time, we 
have seen a very disturbing increase in extreme poverty, 
poverty below half the poverty line, which is now up to 17.1 
million people. Again, it is very disproportionately families 
headed by single mothers and disproportionately people of 
color.
    That is what we need to be looking at. To me as a lawyer, 
that is res ipsa loquitur, it speaks for itself, and we need to 
look at every state.
    In Wyoming in 2008, they were down to 281 families in the 
entire state who were receiving welfare. Again, what is it 
about that picture? We need to know about that. It is very 
troubling.
    We have six states that have under ten percent of poor 
children in their states on welfare. Again, very troubling.
    We have 51 stories to look at because this is a block 
grant. Some of them are good and some of them are very 
disturbing in terms of what I just said.
    Too many states are--again it is state by state that we 
need to look at--not letting people on in the first place. 
Forty-two states have rules that discourage enrollment.
    Sanctioning people off, 22 states use a full family 
sanction for the first offense. Time limits have an increasing 
effect as time passes. More and more families are hit by them. 
Seventeen states have initial time limits of under five years. 
Then the recession comes and we have this lack of 
responsiveness.
    We need to look at all of this. We want to pursue two aims, 
I would suggest. One is helping people get jobs and get out of 
poverty. That is absolutely vital, but we need to do it right. 
We need to do it better. As Ms. Moore said, more emphasis on 
education and training. And we need to have TANF be a safety 
net.
    The conversation here is about a program of $16.5 billion, 
not $950 billion. that figure includes many other things. When 
we have so many women and children who are in poverty, without 
welfare and without a job, we really need to figure out why 
that is, and we need to do better. And I hope I can have a 
chance to work with you, Mr. Chairman, as you undertake the 
inquiry for re-authorization.
    Thank you.
    [The prepared statement of Mr. Edelman follows:]

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    Chairman MCDERMOTT. We will have some of you back. I feel 
like I am doing this on the back of a galloping horse, and I 
hate it. I want a chance to question you.
    Mr. Rector is a Senior Research Fellow at The Heritage 
Foundation. Mr. Rector.

    STATEMENT OF ROBERT RECTOR, SENIOR RESEARCH FELLOW, THE 
                      HERITAGE FOUNDATION

    Mr. RECTOR. Thank you, Mr. Chairman.
    When you are talking about increasing welfare spending, it 
is important that you have to look at this picture 
holistically. There are over 70 different means tested 
programs, and if you simply look at one program in isolation, 
you can create an image of need when in fact you have 
extravagant spending.
    The simple reality is that in 2011, Government will spend 
around $475 billion on means tested assistance to low income 
families with children. That is over $30,000 for each family 
with an income below 200 percent of poverty.
    I have spent 25 years on the budget of welfare. I cannot 
even begin to fathom where all that money is going.
    I would think that before we increase spending, we at least 
figure out where the $475 billion is going.
    We just heard the administration say they did not know how 
much was enough, but they certainly knew they wanted to spend 
more money, and that is the way the Congress operates here.
    Most of the statistics that you hear in this hearing and 
hear today are the result of not counting almost all of that 
assistance.
    TANF cash is three percent of total spending, means tested 
spending, on families with children. If you focus on that three 
percent and ignore the 97 percent, then you can create an image 
of need.
    What we know from just one example is the CRS has told us 
if you look over the first years of reform up through 2008, 
every single level of single parent families showed an increase 
in income if you count all their sources of income.
    If you ignore major sources of income such as income from 
relatives or EITC or food stamps or something, then you can 
create this picture of decline.
    Similarly, most of these numbers concerning TANF receipt 
are based on the current population survey, which misses half 
of the TANF caseload. It is just not there. We pretend that is 
some kind of valid number. It simply is not.
    The whole point of reform was to reduce dependence on TANF, 
increase things such as earned income tax credit earnings, 
support by relatives, support by boyfriends.
    When you look in that holistic manner, what you see is not 
only did single mothers advance, but every category of single 
mothers advanced under this program, and in complete 
distinction to what happened prior to reform.
    Again, the simplest thing is we are going bankrupt as a 
nation, and before we decide to spend $1 billion here, $1 
billion there, you have to have some kind of sense of how much 
we are spending.
    It is like going into a store and I would like that, this, 
I would like that, and you never add up how much the whole bill 
is when you come to the check-out counter.
    Well, the bill is very, very large. Spending has increased 
by 50 percent over the last four years, and it is almost like 
you say well, all the other 70 means tested programs, they got 
a 50 percent increase, so this one has to have a big increase, 
too.
    No, it really does not. It is not necessary for all 70 
programs to be growing gang busters.
    [The prepared statement of Mr. Rector follows:]

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    Chairman MCDERMOTT. Thank you very much for your testimony. 
I am frustrated by having to terminate this hearing because we 
have no time left and about 150 members have not voted with six 
votes over on the house floor. We have to go.
    This will not be our last hearing. I would say to any 
member on either side, most of them were not able to get here 
today, if they want to submit questions in writing, and to the 
people in the audience, go home and tell your members they can 
submit questions in writing to the various panelists.
    I appreciate all of you coming. I again apologize for a 
truncated hearing and delays and all the rest, but what can I 
do? I am not in charge.
    The hearing is adjourned.
    [Whereupon, at 11:5 a.m., the subcommittee was adjourned.]
    [Questions for the Record follow:]

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    [Submissions for the Record follow:]
                    Testimony By Christina Schnetzer
    I have been on and off the system, for more years than I'd like to 
admit, but I have almost always worked, at least part time and raised 
two wonderful girls, and went to school. To better myself and my 
children, but what I find most disturbing is that in this horrendous 
economy, where unemployment rises and extensions dry up, people are 
going to be desparate enough to steal and hurt each other to feed their 
families. It's already happening. I feed a family of two for $207.00 a 
month. And I deeply appreciate it. We usually run out by midmonth. I am 
a thrifty woman, but when a meal with meat a veggie and a starch or 
roll costs about ten dollars to prepare, the 6 dollars a day allotted 
doesn't go far, and that's for one meal. I don't get monetary 
assistance at this time, but my meds are over $800.00 a month, for 
complications of a brown recluse bite, I take no pain pills, and my 
doctor doesn't do pain management, so my many problems that include: 
Spondolathesis, sponolytis, vertebral bones spurs, compressed and 
deteriorated spine, two bones separated in a car crash, at the 
shoulder, and now, problems with bladder cyst, an inability to eat 
because of stress and gall bladder removal and the complications, 
someone should be equipped to send me to a specialist. My doctor said 
he would refer me to a Ear Nose specialist, if I could find one, that 
takes my medicaid plan and I can't. All the while I am losing my 
hearing due to an inner ear infection that has gone through 3 courses 
of antibiotics to no avail, I have to arrange for the injectible 
antibiotic, which still hasn't arrived 2 weeks later. But at the same 
time, I can and want to contribute, I have been blocked from several 
jobs, because my daughter getting medicaid is a conflict of interest in 
my county, so I was even forced to leave a job on the premises, twice . 
. . because I received Govt. benefits. I was denied PRC's I was never 
granted one, and lost another job because of not being able to fix my 
car, while a neighbor received $3,000.00 to fix their car, and THEY 
WEREN'T EVEN WORKING, while I was. There are some people who have to 
ruin things for everybody and I realize there is fraud that takes place 
on behalf of recipients, but there are corrupt folks within the 
agencies, and Legal Aide . . . Does Not HELP . . . anyone. We feel as 
poor citizens, that we would like to see stimulus jobs of the same 
nature as the California Model. We need extensions on benefits and 
unemployment, at least until the unemployment rate dips back below 8%, 
some people are never going to work . . . More expedient service from 
SSA, as people have to be FLAT BROKE, NO UNEMPLOYMENT, ETC FOR A YEAR 
BEFORE THEY FILE, AND WAIT 5 TO 10 YEARS FOR AN ANSWER . . . this is 
how we treat the downtrodden in our society, as parasites, when in fact 
I will come clean your trash cans and commodes for a living wage job, I 
have in the past, and now two college degrees later, I will again if 
needed. 2 weeks ago I saved a director of the Treasury's life, as she 
was choking, in the senate lunchroom, I do have value as a human being. 
I do want to work! I live in a society of closing stores, emptying 
houses, joblessness and hopelessness. Don't yank out the safety nets 
that are much needed at this time to keep me and mine alive. Give time 
for education, make the biological dad fill the work requirements, 
instead of babying him, so the mother can raise the babies, make 50% of 
first shift work open for moms who want to work, but don't want to turn 
their kids to the streets from unsupervision. Extend food and shelter 
benefits, why are there so many empty houses and no one who can afford 
to live in them? There are so many obvious solutions, but maybe they 
can only be seen, by looking up, not down. Thank You.

                                 

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