[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
IMPROVING WORK AND OTHER
WELFARE REFORM GOALS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HUMAN RESOURCES
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 8, 2011
__________
Serial No. 112-HR6
__________
Printed for the use of the Committee on Ways and Means
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70-891 WASHINGTON : 2011
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COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HUMAN RESOURCES
GEOFF DAVIS, Kentucky
PERIK PAULSEN, Minnesota LLOYD DOGGETT, Texas
RICK BERG, North Dakota JIM MCDERMOTT, Washington
TOM REED, New York JOHN LEWIS, Georgia
TOM PRICE, Georgia JOSEPH CROWLEY, New York
DIANE BLACK, Tennessee
CHARLES W. BOUSTANY, JR., Louisiana
Jon Traub, Staff Director
Janice Mays, Minority Staff Director
C O N T E N T S
__________
Page
Advisory of September 8, 2011, announcing the hearing............ 2
WITNESSES
Gary Alexander...................................................
Secretary, Pennsylvania Department of Public Welfare Testimony. 7
Kay E. Brown.....................................................
Director, Education, Workforce, and Income Security, U.S.
Government Accountability Office Testimony................... 17
Douglas Besharov.................................................
Professor, School of Public Policy, University of Maryland
Testimony.................................................... 40
Scott Wetzler, Ph.D..............................................
Vice Chairman and Professor, Department of Psychiatry and
Behavioral Sciences, Montefiore Medical Center Testimony..... 62
LaDonna Pavetti, Ph.D............................................
Vice President for Family Income Support Policy, Center on
Budget and Policy Priorities Testimony....................... 74
IMPROVING WORK AND OTHER WELFARE REFORM GOALS
----------
THURSDAY, SEPTEMBER 8, 2011
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Human Resources,
Washington, DC.
The subcommittee met, pursuant to call, at 2:10 p.m., in
Room B-318, Rayburn House Office Building, the Honorable Geoff
Davis [chairman of the subcommittee] presiding.
[The advisory of the hearing follows:]
HEARING ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
Chairman Davis Announces Hearing on Improving Work and Other Welfare
Reform Goals
Thursday, September 08, 2011
Congressman Geoff Davis (R-KY), Chairman of the Subcommittee on
Human Resources of the Committee on Ways and Means, today announced
that the Subcommittee will hold a hearing on the reauthorization of the
Temporary Assistance for Needy Families (TANF) program, including how
States engage recipients in work activities that move them toward self-
sufficiency. The hearing will take place at 2:00 P.M. on Thursday,
September 8, 2011, in Room B-318 of the Rayburn House Office Building.
The hearing was originally scheduled for 9:00 A.M. on Thursday,
August 4, 2011, in Room B-318 Rayburn House Office Building, but was
postponed.
In view of the limited time available to hear from witnesses, oral
testimony at this hearing will be from invited witnesses only.
Witnesses will include experts on the engagement of TANF recipients in
work activities and other issues. 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 purposes of the TANF program include providing assistance to
needy families and ending dependence on government benefits by
promoting job preparation, work, and marriage. Adults on TANF may be
required to participate in up to 30 hours of work or other constructive
activities per week to be eligible for benefits, and States must ensure
that 50 percent of work-eligible families satisfy this requirement.
Since it replaced the New Deal-era AFDC program in 1996, TANF has
resulted in reduced welfare dependence as cash assistance caseloads
declined 57 percent through December 2010. The work-based 1996 reforms
also played a substantial role in reducing child poverty, and even in
the recession year of 2009, both African American and Hispanic child
poverty remained below 1996 levels despite an unemployment rate 50
percent higher than the pre-reform level.
While TANF has resulted in increased work and reduced dependence
and poverty among many low-income parents, current pro-work policies
may not reach all or even most adults in families on welfare. States
may exempt individual adults on welfare from work requirements or
otherwise adopt policies that reduce the 50 percent share of households
expected to include an adult participating in work or other activities
in exchange for benefits. For example, an increasing number of States
have used ``excess maintenance of effort (MOE) credits,'' among other
measures, to significantly reduce the share of current welfare
recipients expected to work or participate in other activities while
receiving benefits, undermining a key welfare reform goal. The TANF
program is currently authorized through September 30, 2011, and the
President called for a one-year extension of the current program in his
Fiscal Year 2012 budget proposal.
In announcing the hearing, Chairman Davis stated, ``TANF is
designed to help low-income adults prepare for, find, and stay in jobs
instead of spending year after year on welfare. Despite significant
success since welfare reforms were enacted in the 1990s, in Fiscal Year
2010, over four-in-ten TANF families faced no work requirement at all,
and less than a third of families facing work requirements actually met
them in Fiscal Year 2009. With TANF requiring an extension before the
end of this year, now is the right time to review the program to ensure
that States are taking the necessary steps to help TANF families move
up the economic ladder, as the 1996 welfare reform intended.''
FOCUS OF THE HEARING:
The hearing will focus on oversight of the TANF program along with
proposals to improve work and other TANF goals as part of upcoming
legislation to extend TANF and related programs.
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the World Wide Web at http://www.waysandmeans.house.gov/.
Chairman DAVIS. Good afternoon. I would like to welcome
everybody here. I would also thank our panelists and also our
guests in the audience for their patience. Votes have made us a
little bit tardy in the beginning, but we are looking forward
to having this discussion with all of you, have a chance to
hopefully share afterwards, and appreciate you coming in.
Today we will be reviewing ideas for reauthorizing the
Temporary Assistance for Needy Families program. Since it
replaced the New Deal-era AFDC program in 1996, TANF has been
successful at cutting welfare caseloads by 57 percent through
last year. Even more importantly, by promoting work among
single parents who are the most common welfare recipients, it
has helped reduce child poverty in female-headed families by 10
percent, even with the deep recession.
But despite such progress, TANF can and should be
strengthened to help more low-income families support
themselves in the years ahead. Unfortunately, the
Administration has called for only a straight one-year
extension of current law, which expires at the end of September
2011. Given that position it seems unlikely that significant
changes to TANF will happen this year. In fact, I expect the
House will consider a straight short-term extension of TANF
later this month. But today's hearing will let us start to
focus on key problems that a straight extension would leave
unfixed, and help us chart a path toward fixing those issues in
the coming year. As with any program, we learn and develop as
time and years go on and we encounter new things and identify
processes that can be addressed or be improved, and that is
what this focus is.
Key concerns involve the fact that not enough adults on
welfare are working or preparing for work today. For example,
according to recently-released data from the Department of
Health and Human Services, in Fiscal Year 2009 only about two
in ten families on welfare included an adult who met a welfare-
to-work requirement. The reasons are complicated, including
because a rising number of welfare payments do not include an
adult benefit, called ``child-only'' payments. But as a
testimony of the nonpartisan Government Accountability Office
discusses, many States are also using an obscure accounting
technique known as ``excess MOE credits'' to weaken work
requirements and avoid engaging adults in work or training, as
they should. Instead of the State helping more adults prepare
for and begin work, they scour their books to uncover more
spending they can credit to the TANF program and thereby reduce
the number of people they have to engage in work activities.
This compounds underlying concerns that too few current
recipients are actually engaging in constructive activities to
prepare for work and life off of welfare. And that does a
disservice to all poor families who want and need help to
become self-reliant.
Other concerns involve outright abuse of taxpayer trust,
such as when adults on welfare spend taxpayer funds on liquor,
gambling, tattoos, or even visits to strip clubs. As recent
exposes have revealed, too many welfare recipients have
accessed taxpayer funds at cash machines and casinos, liquor
stores, strip clubs, and even on cruise ships. Some States,
including California, have already taken action to plug this
so-called ``strip club loophole.'' Senators Hatch and Baucus,
our colleagues on the Senate Finance Committee, have proposed
we do the same on the Federal level. We should consider that as
well.
A number of States have either enacted or are considering
measures that try to ensure parents on welfare are not using
drugs which stand in the way of their getting off benefits and
into work. Our colleague, Mr. Reed, raised this issue at our
last hearing and it is one attracting a lot of attention. In a
world where many employers require drug testing to ensure
workers are clean and sober, neither taxpayers nor welfare
recipients are helped if we have a lower standard for those
collecting welfare benefits designed to help them enter work.
Finally, in addition to work and personal responsibility,
another key driver of welfare dependence involves family
formation, especially whether children are raised in married,
two-parent households, in which they are most likely to thrive
and avoid poverty. In 2009 the poverty rate for married
families with children was 8.3 percent, while the poverty rate
for households headed by unmarried mothers was 45.3 percent,
almost five and a half times as high. Yet current welfare rules
create marriage penalties by expecting a greater share of
married parents to be working and for more hours. States have
responded by in effect opting out of such requirements
altogether. It is time to ask whether the underlying rules
should be reformed in favor of treating all families the same.
This is one of several questions we should ask about how we
remove marriage penalties and encourage stronger families in
the next round of reform.
We have an excellent panel of witnesses with us today to
discuss these issues and more, and we look forward to all of
their testimony.
Without objection, each Member will have the opportunity to
submit a written statement and have it included in the record
at this point.
Chairman DAVIS. And now I would like to defer to my friend
and colleague, the ranking Member, Mr. Doggett, to make his
opening statement.
Mr. DOGGETT. Thank you so much, Mr. Chairman. As we take up
this question of how to reauthorize the Temporary Assistance
for Needy Families program I think we should focus on two
goals: helping able-bodied recipients find the work that they
need, while protecting the safety net for struggling families
who are unable to do work because of disability, family crisis,
or the fact that there is not a job available. I believe much
work needs to be done on both counts.
We are caught up in the millions and the billions, quite
appropriately. But this is about looking into the face of one
child who is left homeless on the streets because there is no
protection, or is one of the four children in this country who
wakes up not knowing whether there will be food at the end of
the day for their family.
We should be concerned about strip clubs or any abuse of
this system and see that those who abuse these programs do not
receive assistance, whether they are a pharmaceutical
manufacturer or an individual welfare recipient. But I think
our concerns must be much broader. We should be concerned about
protection that is stripped from the many needy families across
this country.
Even though the number of eligible poor families has
increased substantially with these hard economic times, the
participation in TANF has not increased by a similar amount. In
2009, only one of every five children in poverty across America
received any direct Temporary Assistance for Needy Families
assistance. It is the lowest level of poor children receiving
cash assistance since 1965.
And in Texas, of course, matters are worse. We only have
about 1 out of every 20 poor children receiving assistance; and
when assistance is received, a family of three could expect to
get about $244 a month, or less than 20 percent of the
generally accepted poverty line.
TANF has become, I believe, more hole than safety net,
protecting fewer and fewer families as more and more have
fallen deeper into poverty. We all want to see more families
advance from TANF into full employment and the middle class,
but so many are just struggling to stay in the situation that
they have now and have lost their chance to participate in the
middle class. The goal is not achieved when caseloads decline
due to a lack of access for poor families rather than a decline
in the number of poor families. With fewer poor children and
their families receiving Temporary Assistance for Needy
Families, now is not the time to do even less with significant
spending reductions.
I am pleased to hear the chairman indicate that we might
move forward with an extension, even if temporary, and I am
hopeful that that extension will include the TANF Supplemental
Grant program that has already expired this summer. That is
what Texas and 16 other States rely upon. They would see up to
a 10 percent reduction in TANF funding without it.
Over 15 years ago, as part of the 1996 reform of the
welfare laws, a reform that I personally supported, TANF
Supplemental Grant funds were set aside to help the States that
were negatively affected by the Federal formula. Ever since,
Texas and a number of other States have depended on these
monies in order to provide assistance that their families need,
even at the relatively low levels that Texas funds.
Without action on this issue, States will lose about $3
billion over the next ten years; $500 million of that will be
in my State of Texas. The loss of these grants would place at
risk a range of vital services, including efforts to ensure
that children are cared for in their own homes, child-care
assistance for working families and job training. With funding
for TANF having expired, or will expire at the end of this
month, it seems unlikely that Congress will design
comprehensive legislation to reauthorize it. I do hope we can
come together on a bipartisan temporary extension.
Unless, Mr. Chairman, I direct all of my concerns at
Republicans, which I have many, I must concede that the
Administration has largely been missing in action on this issue
which impacts the lives of so many of our most vulnerable
neighbors. And I would urge the Administration to provide more
leadership on improving the TANF program as we approach the
current authorization expiration at the end of the month. Thank
you.
Chairman DAVIS. Thank you very much. I look forward to
working with you on this as we move forward. It is going to be
an interesting discussion over the intervening months, and
hopefully we will come up with a good solution to that.
Chairman DAVIS. Before we move on to our testimony, I would
like to remind witnesses that we are limiting the opening
statements, the oral statements, to 5 minutes. However, without
objection, all of the written testimony will be made part of
the permanent record.
On our panel this afternoon we will be hearing from a
number of folks. First, Gary Alexander, the Secretary of the
Pennsylvania Department of Public Welfare. He gets a
persistence award today for coming, despite flooding in his own
State, a lengthy commute, and driving rain. And as such, he may
need to leave us a little bit early to attend to some other
matters, but we really appreciate you taking the time to come
down here and share from your experience and the things that
you have done in Pennsylvania.
We have back with us Kay Brown from Education Workforce and
Income Security with the U.S. Government Accountability Office,
who has been with us before to share very critical information
as we are beginning to address a range of issues under
jurisdiction of the committee.
Doug Besharov, Professor at the School of Public Policy at
the University of Maryland, who has worked for many years in
this area and whom I have gotten to know through work with the
subcommittee as well.
Scott Wetzler, Vice Chairman and Professor at the
Department of Psychiatry and Behavioral Sciences at the
Montefiore Medical Center.
And LaDonna Pavetti, Vice President for Family Income
Support Policy for the Center on Budget and Policy Priorities.
Thank you all again for being here. Secretary Alexander,
please proceed with your testimony.
STATEMENT OF GARY D. ALEXANDER, SECRETARY OF PUBLIC WELFARE,
COMMONWEALTH OF PENNSYLVANIA
Mr. ALEXANDER. Thank you. Chairman Davis----
Chairman DAVIS. You are in Washington. Things don't always
work very well here.
Mr. ALEXANDER. Not as lucrative as Pennsylvania.
Chairman Davis and subcommittee members, thank you for the
opportunity to speak today. My name is Gary Alexander and I am
currently the Secretary of Public Welfare for the Commonwealth
of Pennsylvania. This committee is well familiar with the
fundamental changes in the social contract between the
taxpayers and recipients of income and services under the
Personal Responsibility and Work Opportunity Reconciliation Act
of 1996. For the first time, the stated objective of the
program explicitly emphasized self-reliance, but equally and
importantly, expectations were imposed in exchange for
temporary assistance. With this central element in place, the
legislation that once brought into alignment the interests of
all parties--recipients, taxpayers and government bodies--
recipients were motivated to move into jobs at the earliest
opportunity because of time limits and TANF work obligations.
Taxpayers could see that those that they were temporarily
supporting were making real efforts to earn their own income,
and government agencies were no longer bought out from the
consequences of rising caseloads, but instead had every reason
to encourage family self-sufficiency so that block grant funds
could be saved or reprogrammed.
This alignment of incentives, and not just the work program
changes alone, was responsible for the 60 percent reduction in
the national caseloads experienced soon thereafter 1996.
When TANF was reauthorized in 2006, certain adjustments and
updates were made, but the essential social bargain set forth
in the original legislation remained intact. I would encourage
Congress to keep that alignment of incentives intact as we move
forward.
There is no reason that other benefit programs should not
encourage self-reliance incorporating a version of a work
requirement. Although not all benefit programs are under the
jurisdiction of this committee, it is important for the
Congress as a whole to consider the nature of the social
welfare system as recipients experience it, and to consider the
adaptations of the early TANF success to other related
programs.
Large assistance programs such as food stamps, Medicaid,
housing assistance, and unemployment insurance should
incorporate a universal work or preparation and obligation to
work for all able-bodied recipients.
To be specific to Pennsylvania, Pennsylvania possesses a
vast social welfare network that has become a way of life to
many. Generally, lifetime benefits are limited to 60 months on
the TANF program, but there are many exceptions, as you know,
to receive extended TANF.
Pennsylvania has approximately 18 percent of its caseload
on after 60 months. With billions of dollars spent over the
past decade, Pennsylvania only puts 5 percent of its clients in
a 30-hour per week job, yet it touts a work participation rate
of approximately 50 percent. Half of those leaving TANF for a
job return to TANF within 1 year. Pennsylvania and most States
meet their work participation rate with everything but a real
30-hour a week job. The welfare state in Pennsylvania is
growing by 13 percent year over year.
We and you in Congress know that our current welfare system
does not work for America. As in all Federal programs, the
rules of TANF are complicated, cumbersome, onerous and
convoluted. For TANF the current measures and outcomes, while
important to the Federal establishment, fail to accurately
measure work, and they allow States to inflate numbers and not
be held responsible for performance. Only a program that values
and encourages work first, across all Federal programs, will
increase accountability and empower individuals and families to
self-sufficiency and independence.
How do we solve this dilemma? One, create a performance-
driven system across the board where contractors are paid for
job placement and retention only. Simplify the rules and create
simple performance measures for States, like work attainment
and retention and healthy lifestyles; retain the current block
grant, but do not penalize States for saving money; and ensure
that States measure real job placement and retool the work
participation rate to reflect real employment and do not allow
States to pad participation rates by shifting caseloads into
State-only programs.
Thank you.
Chairman DAVIS. Thank you very much.
[The prepared statement of Mr. Alexander follows:]
Chairman DAVIS. Ms. Brown, you may proceed with your
statement.
STATEMENT OF KAY E. BROWN, DIRECTOR, EDUCATION, WORKFORCE, AND
INCOME SECURITY
Ms. BROWN Chairman Davis, Ranking Member Doggett, and
Members of the Subcommittee, thank you for inviting me here
today to discuss our work on the TANF program, a key program
intended to assist women and children living in poverty.
I will cover two issues: first, changes in the welfare
caseload and spending; and second, State actions to meet work
participation requirements.
First, regarding caseload and spending changes. Following
welfare reform, the number of families receiving TANF cash
assistance dropped by almost 50 percent as States focused on
moving parents quickly into jobs. This was followed by a slight
uptick since the beginning of the recession. By 2008, about
half of these cases still receiving cash assistance were what
we called child-only cases. In these households only the child
receives benefits because he or she is living with a parent or
caregiver who is not eligible to receive cash assistance. The
parent may receive supplemental security income, may be an
immigrant, or may have been sanctioned for noncompliance with
program requirements, or the child may be living with a
nonparent caregiver, often a relative. These adults in the
child-only cases are generally not subject to work
requirements.
As the number of families receiving cash assistance
declined, so did TANF-related State spending for cash
assistance from about 73 percent of all TANF expenditures in
fiscal year 1997 to 30 percent in 2009. Instead, States shifted
spending to meet other purposes consistent with the program
goals, such as child care and child welfare. However, States
primarily report to HHS on families receiving cash assistance,
the traditional welfare caseload, and not on these other forms
of assistance. As a result, we don't have a complete picture of
the families that may be benefiting from TANF funds and the
services that they receive.
My second point is about how States have met their work
participation requirements. Because of the program's focus on
job preparation and employment, States' performance is measured
in large part by their success in ensuring at least 50 percent
of their work-eligible cash assistance families are working or
engaged in other specified work activities; yet our work shows
that approximately one-third of TANF families participated in
these work activities for the required number of hours each
year from 2001 to 2009.
States have been able to engage less than 50 percent of
participants in work without incurring penalties by taking
advantage of allowable program flexibilities. For example,
States can receive a credit that reduces their required
participation rate by the same percentage as their caseload
decline. In 2009, 38 of the 45 States that met their required
work participation rate did so in part because of caseload
declines.
Many States also took advantage of a provision that factors
in State spending. States are required to spend a certain
amount of their funds every year to receive their federal TANF
block grant. In recent years when States have spent above the
required amount, they were permitted to correspondingly
increase their caseload reduction credits. In 2009 32 States
claimed this excess spending, and 17 States would not have
otherwise met their participation rates.
And finally, States made policy changes that helped ensure
they met their participation rates. Some States made changes to
ensure that families complying with work requirements continued
to receive cash assistance. States also opted to provide cash
assistance to some families completely outside of their TANF
program, particularly those families that have the most
difficulty meeting the TANF work requirements. These families
were not counted in the State's work participation calculation.
In conclusion, although a central feature of the TANF block
grant is the flexibility it provides to the States to design
and implement their own programs, the lack of information on
how noncash assistance funds are used and who benefits,
combined with the limited usefulness of the work participation
rate as the key performance measure, hinder our ability to
fully understand how the program has been implemented and
whether it is reaching its goals.
This concludes my prepared statement. I am happy to answer
any questions.
Chairman DAVIS. Thank you very much.
[The prepared statement of Ms. Brown follows:]
Chairman DAVIS. Professor Besharov, if you could give your
testimony.
STATEMENT OF DOUGLAS J. BESHAROV, PROFESSOR, SCHOOL OF PUBLIC
POLICY, UNIVERSITY OF MARYLAND
Mr. BESHAROV. Chairman Davis, Ranking Member Doggett, and
other Members of the Subcommittee, it is a pleasure to be here
to testify on this very important topic. I teach at the
University of Maryland, and I teach courses on program
evaluation and poverty alleviation. More importantly, I think,
for today's session, I also lead a project called Learning from
Abroad where we look at programs in other countries, especially
other OECD countries. And essentially my message to you today
is going to be that we can no longer say the Europeans are not
very serious about labor force participation and that we are so
good at it.
In my testimony is a figure that shows that the percentage
of Europeans working is now about the same as the U.S. Two
things have happened. U.S. labor force participation has gone
down. It was going down before the recession. I think this is a
long-term problem that ought to be addressed by the committee.
Secondly, the Europeans have, I think, gotten much better
at enforcing participation requirements in their programs,
whether it is unemployment programs, disability programs, or
social assistance, and I think those are lessons for us as
well.
When I first met Chairman Davis, he said, I knew a
professor would have some charts, so in my testimony are some
charts. I notice that the testimony as we gave it to you does
not have page numbers, but figure 1 picks up on, I think, part
of what is the main interest of the committee. And that is, we
have seen since 2009 a major increase in unemployment, one of
the largest increases and most sustained periods of
unemployment in our history, at least since we have been
counting this, and yet TANF has hardly gone up. TANF
participation, the caseload is about 14 percent up,
cumulatively, in those years.
As the prior two speakers mentioned, there are a lot of
things that States can do to distort recipiency rates so that
we don't get exactly an accurate number, but there is rough
agreement that the TANF numbers haven't risen that much. If you
look at figure 1, you can begin to see some of the reasons.
Number one, the Congress has been extremely generous about
unemployment benefits. From a time when about 30 or 35 percent
of the unemployed received benefits, we have been running at
about 70 percent of the unemployed receiving benefits. They
won't go on TANF. If you look at this chart, also you will see
that SNAP or food stamp benefits have really increased. And a
surprising part of this is disability payments.
If you look at figure 2 in my testimony, you will see the
relationship between unemployment and SSDI applications.
Now, I could not find a chart, and I couldn't create a
chart that quickly that had the approved applications, but I
can tell you that they reflect these numbers. Which is to say
that a substantial number of the people who are unemployed,
especially in their fifties, are turning to the disability
programs and going on disability, which is another reason why
the TANF caseloads are not rising and another reason why I
think, as Secretary Alexander said, many of us are coming to
the conclusion that, as we move beyond this recession, that
something be done to consolidate the pro-work provisions of all
of these programs. Because in a post-welfare reform, and, I
hope, a post-recession environment, if we don't fix disability,
if we don't fix unemployment, we will continue to fall behind
even the Europeans on labor force participation.
Is this doable and is it doable in a time of a recession?
Figure 4 is I think a demonstration of that. This is how the
Dutch, when they saw that their disability caseload was
increasing many times faster than their population--in 1980
they had three times as many people as we did as a percentage
of the population on disability--reformed their system. And now
the percentage of Americans on disability and the percentage of
the Dutch on disability are the same. These reforms that are
possible.
There are many recommendations made from the Democratic
side and the Republican side by academics all over this country
and actually all over western Europe about what to do.
In my testimony I summarize the major changes that have
been made. Tightened eligibility rules, a mandate which
includes, for example, physical examinations.
Whoops, I am out of time. I have the list there. I hope the
committee will consider this kind of consolidation of programs.
This is the time to worry about labor force participation, not
after the recession and unemployment pass.
Chairman DAVIS. Thank you, Professor.
[The prepared statement of Mr. Besharov follows:]
Chairman DAVIS. Dr. Wetzler.
STATEMENT OF SCOTT WETZLER, VICE CHAIRMAN AND PROFESSOR,
DEPARTMENT OF PSYCHIATRY AND BEHAVIORAL SCIENCES, MONTEFIORE
MEDICAL CENTER, ALBERT EINSTEIN COLLEGE OF MEDICINE
Mr. WETZLER Chairman Davis, Ranking Member Doggett, and
Members of the Committee, thank you for having me. I want to
talk to you about the specialized issue of substance abuse as
it relates to welfare reform.
As you know, the law stipulates that people are allowed to
be exempted from the work participation requirements for 4
consecutive weeks up to 6 weeks per year to engage in intensive
substance abuse treatment. And as a result, I actually run a
program in the Bronx, New York, which really has some of the
highest rates of substance abuse and poverty in the Nation,
where we do evaluate welfare recipients in terms of their
substance abuse disorders to determine whether they are
employable or not, and refer them for various sorts of
substance abuse treatment that is appropriate to the level of
care that is needed.
What we found over the years of running this program, we
have evaluated more than 20,000 people, is that the vast
majority of people with substance abuse are in fact able to
participate in a work program and don't even require the
exemption at all. About 70 percent of the people at the initial
evaluation are eligible for work, and another 20 percent of
people after a brief period of intensive treatment are able to
work.
So the real main message I would like to leave you with, as
I have said in my written testimony, is that just because
somebody has a substance abuse disorder doesn't mean that they
can't work.
Now, having said that, I think it is important to emphasize
the importance of treatment for these folks. And what we do is
we refer them for treatment and work at the same time,
simultaneously. So we take if not a rigid work-first approach,
certainly a work-early approach. Because the treatment referral
is a mandated appointment, in a sense we are putting pressure
on people, a kind of coercive pressure on them to do something
which they might not otherwise do voluntarily. But one of the
things I would like you to know also is that treatment under
that sort of circumstance, coercive treatment, is as effective
as people who went through treatment voluntarily . . . and it
actually helps to increase people's motivation and attendance
in treatment.
In New York we have in addition, a case management program
where we try to help people attend treatment. And this I guess
is part of the flexibility that was discussed before of how the
funds can be spent. In New York it is called customized
assistance. And these folks have lots of different problems
that make it difficult for them to work, make it difficult for
them to attend treatment. They have housing issues, psychiatric
problems, medical problems, legal issues. Obviously, they also
have lack of job skills. And the comprehensive case management
program really develops a customized assistance program to help
them attend treatment, and we have been very successful in
getting people to attend as a result of that.
The other point that I want to make with you is that
actually as the caseloads have dropped so much in New York, I
would say only one out of eight people with substance abuse
disorders is on cash assistance. And in fact, I think that this
issue is a much bigger problem, as referenced before, for the
people on Medicaid-only population.
There is a famous case in New York of one man who was on
Medicaid who was in in-patient substance abuse detoxification
for 270 days in one year, and the next year he was in in-
patient detox for 272 days. This was a man who never followed
up with outpatient treatment and he was free to enter the
hospital as much as he wanted and there weren't any leverage
that was brought to bear on him.
One thing I would suggest is that in thinking about the
responsibilities attached to various sets of benefits, we think
about Medicaid just like we do about the temporary assistance.
Thank you very much.
Chairman DAVIS. Thank you, Dr. Wetzler.
[The prepared statement of Mr. Wetzler follows:]
Chairman DAVIS. Dr. Pavetti.
STATEMENT OF LADONNA PAVETTI, VICE PRESIDENT, FAMILY INCOME
SUPPORT POLICY, CENTER ON BUDGET AND POLICY PRIORITIES
Ms. PAVETTI. Chairman Davis, Ranking Member Doggett, and
Subcommittee Members, thank you for inviting me, for giving me
this opportunity to testify today.
In my capacity as a researcher I have observed firsthand
how States have implemented TANF work requirements over the
last 15 years. What started as an income maintenance program
with a very tiny work program attached to it is now a program
that is almost entirely focused on work. The cash assistance
the program provides is minimal, accounting for only about a
quarter of all State and federal dollars.
While this shift to a work program has been remarkable, it
has not served all poor families well. And with a weak economy
we now face an entirely new set of challenges. As we prepare
for TANF's reauthorization, we need to remember that TANF was
created with a balanced approach in mind, to both create an
expectation of work, and to provide a safety net when work
isn't available. So both aspects are important and we need to
focus on both of those.
In order to make improvements in both of these areas I make
three key recommendations. One is that we need to redefine
TANF's work requirements to better reflect the characteristics
of the caseload. Second, we need to redefine how performance is
measured. And third, we need to provide adequate funding to
States so that they can do the job that they have been asked to
do.
Now, what I would like to do is tell you how I arrived at
those recommendations. First, the TANF caseload today is very
different than it was 15 years ago, and it really does demand a
different approach to work requirements. We have evidence that
many who receive TANF today face significant barriers to
employment, it doesn't mean that there shouldn't be
expectations and they shouldn't be encouraged to work, but it
does mean that the assistance they need is quite different than
when we started TANF.
We know little about how to serve people with a lot of
barriers, and it will take time and targeted resources to
identify the most cost-effective approaches.
As people have noted, we have minimal data available to
actually assess what TANF has accomplished and how that has
changed over time. As Chairman Davis noted, only about 24
percent of TANF recipients are meeting their TANF work
participation rate standard. And while that number may seem
low, it really tells us very little about whether TANF is
succeeding or failing as a work program.
From the work I and other researchers have done, we know
that when families apply for assistance they are quickly
referred to a mandatory work activity. Individuals that don't
comply are sanctioned for noncompliance, which in almost every
State means that they lose their cash assistance after a few
months. The assumption that States have failed to impose a work
mandate or that they have stopped focusing on work, either
because of changes in the DRA or because the economy weak, is
simply not an accurate reflection of reality.
The question we should be asking is if States have imposed
stricter mandates, why are so few meeting the work
requirements? I believe that many of those answers can actually
be found in the data that you have from HHS on work engagement.
First, about a quarter are participating, but they don't meet
the standard, so they are actually doing something, they are
trying, but they are not quite at the level where they count.
Second is about half have no hours of participation, but
most of those can be explained and are understandable and, I
would say, even appropriate. The largest share is exempt from
participation by the State, mostly because their family or the
individual herself or a family member is disabled. And only 8
percent have no hours because the State has actually failed to
engage them in work activities.
When evaluating how well States are doing we should ask
ourselves what is it that we want States to do that they are
not doing. Will stricter mandates result in better outcomes or
just a greater abandonment of the most vulnerable families? Or
is it time to give States more flexibility so they can take
risks, be innovative, and discover what works best for families
who are left on the caseload?
The reality is the TANF participation rate is an inadequate
measure of whether or not a State has implemented an effective
work program. As Mr. Alexander noted in his testimony, TANF's
success should be judged on how well States do at getting
recipients into jobs that last. The work participation rate
measures process, it doesn't measure outcomes. A State that
moves recipients off TANF into jobs quickly could easily fare
far worse than a State that keeps people on the rolls. We can
do better, and we can start simply by giving States the option
to measure outcomes instead of process.
The last thing I would like to say is I think that a work-
based system can't be held as a success when it doesn't provide
assistance to vulnerable families when the economy fails. TANF
has responded only modestly to the recession. And what we know
from looking at the evidence is that TANF did well at getting
people into the labor market when the economy was strong, and a
strong economy has to be a part of everything that we do or we
will fail.
I think that the other thing that is important is we don't
have evidence that people have failed and don't want to take
jobs. In fact, we have the opposite. So I think that we need to
think about how we can again make sure that the labor market is
strong and that the resources are there to actually help TANF
recipients and others to actually take advantage of those.
And finally, the last thing I want to say is that we really
do need to make sure the resources are there. Mr. Doggett
mentioned about the supplemental grants. And that really means
that for 17 States they really don't have the same amount of
resources that they had when TANF started, and they are being
asked to do more with less. And then the other thing is that we
also have a contingency fund.
Chairman DAVIS. Excuse me. Your time has expired.
Ms. PAVETTI Okay. I am sorry. I missed that. I was watching
that go. I didn't notice they kept going up. Sorry.
Chairman DAVIS. No problem. It just continues in the other
direction. But I appreciate your thoughts and comments.
[The prepared statement of Ms. Pavetti follows:]
Chairman DAVIS. And we will proceed now to questions. I
would like to start now with Secretary Alexander. In 1996,
welfare reform implemented a newer approach to helping low-
income families. And in exchange for benefits, recipients were
expected to work or prepare for work. While it was not the only
policy to encourage work among low-income families, welfare
reform played a substantial role in increasing employment and
earnings of single mothers and also reducing child poverty.
Yet according to HHS data and the testimony we heard today,
relatively few families face a work requirement as a result of
receiving welfare, and even fewer actually meet work
requirements. What keeps States from engaging more welfare
recipients in activities leading to self-sufficiency and what
can we do to ensure the TANF program doesn't support this
dependency but really focuses to work more effectively to end
it?
Mr. ALEXANDER. Well, first of all, we operate a vast
welfare system that encompasses much more than just TANF. And
unfortunately, I think in our other programs like food stamps
and Medicaid, there is scant--there is a scant work requirement
or no work requirement at all. I think what we have learned
from TANF from 1996 is that there was a focus on self-reliance,
personal responsibility, the focus on work, it was time-
limited, and that there was a focus on bringing families
together in a healthy marriage. And I think that if we are
going to proceed in the future and end dependency, we are going
to have to work harder at encompassing all of our programs
across the welfare spectrum and bring all of these together.
In all of these families that we touch, if they are on TANF
they are on Medicaid; generally, they are on food stamps. So we
have separated families. And we give them an EBT card, we put
benefits on an EBT card, we separate things out. We have to
approach this holistically with these families, with a life
coach to try and bring them to self-reliance and personal
responsibility.
So I think we can learn from TANF, but we have to move on
from TANF and really do much much more. We have got to reach
out to the business communities in a better way to engage them.
And I think it can be done, but I think that the current
requirements, the current TANF requirements are not conducive,
as all of the speakers have said, to really measuring personal
responsibility and self-reliance because we are not measuring
real work participation.
Chairman DAVIS. Thank you. Professor Besharov, do you have
any thoughts on this?
Mr. BESHAROV. Well, I think, first of all, having all the
means-tested programs work in concert is tremendously
important, as I indicated in my testimony. If there is no
serious work requirement in food stamps, if it is relatively
easy to go on disability and then have no work requirement, if
the unemployment program doesn't enforce work or job-looking
requirements, then we have only used one in four, or whatever,
of the programs to encourage job-related activities. And I want
to emphasize here that it doesn't have to be just looking for
jobs. We have a population that also needs different forms of
job training, transitional training, work preparation. Much of
that is going by the board in this period, in part because we
haven't mobilized all these other programs. So it is not just
job search, it is also job training that ought to be part of
this program.
Chairman DAVIS. Anybody else like to share?
Ms. PAVETTI. I think that one thing that is important when
we think about this is to distinguish the difference between
whether people meet the work requirement and whether people are
mandated to work. Because I think in TANF most people are
mandated to work. They may not be meeting that requirement and
I think that is important to consider about where we go.
The other thing that I think is important is that in all of
our programs, if you look at data from when people come into
the program and a year later, the vast majority do work, so it
is really a temporary situation; it is not that people are on
for long periods of time without working. Most people on food
stamps or Medicaid work within a year. So I think we need to
really think about what the portion of the population for which
work is not working. A huge portion has to do with not being
able to find jobs, not that they are not willing to take them
when they are available.
Chairman DAVIS. Would Dr. Wetzler or Ms. Brown like to
comment?
Ms. BROWN As part of our recent work on program overlap and
duplication that we have been doing across the government, we
have also looked at the types of activities that not
necessarily focus on means-tested programs, but thinks like the
WIA program and other employment and training programs. That is
another example of where resources could be combined and
perhaps reach a broader range of needs.
Chairman DAVIS. It would seem that the lack of data
standardization and data matching across the States that we
have talked to--several of us have had discussions on this in
prior meetings--is going to be one key component to eliminating
improper payments or dealing with some of the challenges that
we have, I think, that would streamline and significantly
reduce costs. And I appreciate your answers.
And I now would like to recognize the ranking member, Mr.
Doggett from Texas, for 5 minutes.
Mr. DOGGETT. Thank you very much. And thank you for all of
your testimony.
Dr. Pavetti, you discussed the TANF Supplemental Grant
program. It is really a misnomer because these are not
supplemental grants, but they are a crucial part of the way
that Texas, Tennessee, Georgia, a total of some 17 States,
address the problems that they face, and they were part of the
reform in 1996. Isn't it true that these 17 States who had
their assistance cut when the TANF Supplemental Program was
allowed to expire this summer, that these are the same States
that are already receiving less funding through TANF per person
than most of the other States in the country?
Ms. PAVETTI Yes. The reason why the supplemental grants
were included as a part of the TANF block grant was that there
were a group of States that really fit two characteristics. One
is that they had less spending per poor family, and the other
is that there was some adjustment for our changes in
population, so that it really was just a different way of
getting funding to those States, but they have always been
perceived as part of the original deal. I don't know where the
name ``supplemental'' came from, but it is part of what they
think of as their block grant, and for them it is a cut. And
again, it is to the poorest States in the country.
Mr. DOGGETT. Well, I think the important point, we may have
differences on the committee and among our witnesses about
where the priorities ought to be in making changes here;
whether they ought to be on marriage or work, or both, or the
substance abuse issues that are so critical that you obviously
have some creative ways of handling and note some of the
problems within the current system. But whatever your priority
is, in these 17 States, if this program is not renewed, if the
expiration continues and they get shortchanged in the funds
that they have to do any of the things--new, old, wrong, right,
high priority or low priority--and that is why I think it is so
critical that any extension include this Supplemental Grant
program.
Dr. Pavetti, you were about to comment as your time ran out
about a contingency fund. Would you like to elaborate on that?
Ms. PAVETTI. One of the other parts of the original deal
was the contingency fund, which was really intended to help
States during poor economic times. There was a recognition that
with a block grant you needed to have some mechanism to provide
additional assistance to States.
And there are two problems with the contingency fund, two
main problems. One is there is no money, so there really is no
money for States to draw on to provide extra help. And the
other is the contingency fund is very poorly designed. And Mr.
Alexander mentioned this in his testimony. It is very difficult
for States to access that fund, and when they do access it,
there is no guarantee that they actually use those resources
for countercyclical activities.
So I think there are two things that need to happen. One is
we need to fund it, and the second is we really need to think
of a redesign that will allow it to do some of the
countercyclical things that we know are successful, like
subsidized employment, emergency assistance, things that really
do help families who are looking for work and can't find it.
Mr. DOGGETT. And, Ms. Brown, if I understand correctly,
this Governmental Accountability Study concluded that 90
percent of almost all of the decline in the TANF caseload is
due to fewer eligible families receiving cash assistance?
Ms. BROWN Yes. That is a study we did where we actually
looked at the time that the program changed, up until about
2005-2006. And at that time it was about 87 percent of the
decrease in the caseload was caused--was related to families
who were eligible but, for whatever reason, chose in their
decision-making process not to participate.
Mr. DOGGETT. Thank you. And Dr. Pavetti, is one of the
reasons for that low rate of participation that some of the
States are diverting eligible families away from TANF?
Ms. PAVETTI They are. One of the things States did,
particularly after the Deficit Reduction Act, was they made it
much more difficult for families to get onto TANF. One of the
ways a State can meet their work participation rate is to make
sure that the only families who get on TANF are families who
can meet that rate, so they just increased the standards. And
so it means that the front door is closed to many families.
Mr. DOGGETT. What type of family would be excluded?
Ms. PAVETTI Well, you know, any family--like in one State
that I visited, any family who cannot participate for 30 hours
a week. So a family--I can give you an example of a woman whose
case I reviewed in a study I did who had a very serious anxiety
problem to the point that she could not leave her house, and
she had sores throughout her head because she would pick her
head, so that there was no way she could show up at the agency.
That kind of--that person with those issues would not be able
to receive assistance in a State that requires people to show
up for 30 hours before they get assistance.
Mr. DOGGETT. Thank you. Thank you.
Chairman DAVIS. Thank you very much. I would like to
recognize the gentleman from North Dakota, Mr. Berg, for 5
minutes.
Mr. BERG. Thank you, Mr. Chairman. And thank you all for
being here. I appreciate the input from the witnesses, and
obviously a scenario that needs a lot of review, it needs a lot
of thoughtful debate.
Mr. Besharov, our last authorization, North Dakota, was
part of trying to develop some new and innovative ways, and we
came up with a program called Pay After Performance. In essence
what it says is, during the first 4 months the TANF portion
goes to the children, but the other portion is kind of held for
that 4 months to ensure that that work requirement is
fulfilled, and then the participant would receive their portion
of that after that period. And quite frankly, it has shown in
our State; we have had over a 50 percent participation rate.
And I guess my question is how can we use what we have done
successfully in North Dakota and some of these other States to
apply to a national level to create positive incentives within
the program?
Mr. BESHAROV. Thank you very much, Mr. Berg. I think
throughout the program the incentives have become skewed since
its original passage in 1996, as Dr. Pavetti said, as a number
of us have said. As the rules have gotten more complicated, as
there is this footnote rule and that footnote rule. But many of
the States, I think most or a vast majority, in fact, game the
system. I think Gary even talked about his own State and how it
does it. These participation numbers don't really reflect the
level of nonparticipation that happens in a State.
So the short answer is the kind of innovation that you
described has to be encouraged by the law, not discouraged. And
my sense about that is to simplify the participation
requirements so that the States have an easier way of
explaining how they are going to show participation.
Mr. BERG. Mr. Chairman, just in a nutshell, how would you
simplify them? If there was like one statement--you said, well,
do this, it will simplify and make it easier--what would that
be?
Mr. BESHAROV. Thank you very much because I do have a view
about that. Forget about all this other stuff and say 15
percent of the caseload has to be in a work experience program,
everything else falls into place. You can't have 15 percent, or
make it 10 or whatever number you make; you can't get any
percentage of the caseload into an actual work experience
program without doing all the other things we want the State to
do. That is all you would have to do, and the States I think
would be pretty honest about fulfilling that requirement.
Mr. BERG. Thank you. Dr. Wetzler, a lot of organizations
believe TANF's recipients with substance abuses should be
exempted. We kind of talked about that and you kind of in your
testimony kind of addressed that, and I guess kind of almost
got the impression that to some degree people with drug abuse
would benefit from the activity. And I just want to know how
participating in a work program will help people who are
recovering from substance abuse?
Mr. WETZLER Yes, thank you, Mr. Berg. It is true that there
are many people that seem to believe that somehow--that going
to work is somehow going to be so stressful that it will lead
people to not participate in treatment, or to actually relapse.
But our experience over the last ten years has been that
actually work has a very positive effect when it is done
conjointly with treatment; that it helps people, it gives them
a structure, it gives them a focus for their daily activities,
it actually can increase self-esteem. And I think, most
importantly, it actually increases expectations for what they
should do and really combats a culture of dependency. And even
if it is done, as we said before, about coercively or it is
mandated in some way, it really does--people do participate and
they do benefit from it, from the treatment.
Mr. BERG. Do you have like some specifics in your case
management where again there is financial incentives or
consequences in addition? How is that working?
Mr. WETZLER So in New York there are all sorts of sanctions
that occur if people don't attend these mandatory appointments.
For the person who is going to work and going to treatment
simultaneously, they have a heavy schedule, they have to do
both; and if they miss either one, they will be sanctioned and
that will have some problems.
On the other side of it, we also have some positive
incentives for people who actually do obtain employment. There
are what we call performance milestones that people get for
obtaining employment at the end of the day.
Mr. BERG. Thank you. I yield back.
Chairman DAVIS. Thank you. The chair now recognizes Mrs.
Black from Tennessee for 5 minutes.
Mrs. BLACK. Thank you, Mr. Chairman. And Mr. Besharov,
pronounce----
Mr. BESHAROV. Besharov.
Mrs. BLACK. Yes. Thank you very much. I will not kill your
name.
So let me go back to a statement that you made, and in your
testimony you talked about European countries and how many now
have a larger portion of their population working than we do.
Do you have a sense for why is that? Is that by policy or is it
more employment availability, or what is it that makes that
difference?
Mr. BESHAROV. I think those countries looked at the trend
lines of a greater and greater proportion of their citizens not
working and became frightened, as we should in this country.
And whether it was Germany, the Netherlands the U.K., even now
France, they said what levers does policy have to increase
labor force participation? And actually one of the things they
did is they looked at TANF, and they took the ideas from TANF
and applied them to the other social assistance programs that
they ran. I think that is a large explanation for why their
labor force participation is increasing while ours decreases.
I should add a footnote here. Someone is going to say,
well, you know, you have to control for demographics and so
forth, but I think that is the story line. And I think it was
policy, and I think it was policy because the European
countries saw what was coming and knew they couldn't afford
that many people on, in effect, welfare.
Mrs. BLACK. Thank you.
Mr. Alexander, I want to come to you and ask you--or excuse
me, it was Ms. Brown. In your testimony you note that over half
of the current TANF caseloads consist of child-only cases,
meaning that children are living with an adult who is not
subject to the work requirements. And from your research, do
you know if these families receive any assistance from TANF
agencies in becoming self-sufficient? And second, is this like
the old AFDC program, where these families receive benefits
year after year until the child turns 18, without the family
moving forward in independence from welfare benefits?
Ms. BROWN Regarding the question about whether they receive
assistance for self-sufficiency, many don't. The types of
families that are receiving the assistance, the child-only
assistance, include families like where a parent may be SSI-
eligible and determined that they were unable to work, so they
are not able to participate in the TANF program, they are not
eligible, but the child would be eligible for the benefits.
Another example would be if a caretaker, like a grandmother
was taking care of their grandchild, that in many cases would
not be an expectation that they work in some States, not even a
means test. But there are also cases where there certainly
would be opportunities to encourage work. And the flip side of
that example of the caregiver is if a child were living with a
caregiver that was of the age where they would be eligible for
work and unable to work, there is--right now most of them are
not required to do that.
Mr. BESHAROV. Could I add one outrageous example here to
this? I don't know the exact number. The last time I looked,
though, it was over 25 percent of the child-only cases involved
the children of immigrants; immigrants not being eligible for
TANF, therefore, they are not on TANF, but the child is
eligible. So here is the irony.
Mr. BESHAROV. If you are a noncitizen, TANF's requirements
don't apply to you but they do apply to citizens.
Mrs. BLACK. So in that case you might have a child then
from birth until 18 years old is continuing to get the services
without the parent ever being required to work?
Mr. BESHAROV. Sure. But the great thing about this country
is most of those people are on the up escalator for work and
they eventually get jobs and do better. But yes, that is a
technical possibility and I am sure it happens in some number
of cases.
Mrs. BLACK. Are there others that wanted to speak to that?
I yield back my time.
Chairman DAVIS. I thank you.
With that I would like to recognize the gentleman from
Washington State, Mr. McDermott for 5 minutes.
Mr. MCDERMOTT. Dr. Pavetti, I do casework in your office;
it is always interesting and I have a case for you. It is a
couple. He is 47, she is 45, high school education, they had a
combined income of 90,000 bucks or 84,000 bucks when all this
started back in 2007. They both lost their jobs. They have
three kids, 7, 9, and 12. They have drawn on all their
unemployment benefits, all 99 weeks, so they have nothing left.
They have been using their 401(k), what little they had, to
keep their mortgage payments up so they wouldn't lose their
house, but now they are in foreclosure and they have no house
and they are going to move into their car.
What State would you suggest they go to where they could
find a program that would meet the needs of a middle-class
couple that is being crushed by this economy of 9.2 percent
unemployment? You can put them on all the work search you want,
they can go out every day looking, they have been doing it for
2 years, they haven't found anything.
Where should they go? Or is there a State that has a
program that meets the needs of a family like that that was
once middle class 2 years ago and is now not?
Ms. PAVETTI Well, there aren't many. And the one that I
think--and I mentioned this last time when I was here talking
about program integration--the place where they would probably
be treated--everybody is treated the same is Utah. So anybody
that walks in the door in Utah, regardless of whether they are
middle class or on TANF, goes through the same set of
employment services, so that they really wouldn't be treated
any differently there.
Mr. MCDERMOTT. Would they be able to get a cash grant? AFDC
was set up in the thirties to deal with children. They need
food and clothing and housing and medical care. That is what
AFDC was about. Then in 2006 when we wrote this TANF bill, it
was at the height of an economy that was booming, the bubble
around the high-tech industry was going like mad, you could
find a job anywhere, and now we are in a place where you can't
find a job anywhere. And in fact people who have been
unemployed are having difficulty because employers don't want
somebody who has been unemployed 2 years. They want somebody--
because you have got a bad credit rating. They have used their
credit cards, they have got themselves into horrible messes. So
where is the program, or what needs to be done to make
something available for those people in what is now a totally
different economy than 2006?
Ms. PAVETTI. I think part of what needs to happen is we
need to acknowledge, one, that the economy is part of the
problem and that unless Utah has jobs, even if they could get
services, it is not going to lead to employment. So I think
what needs to happen is really trying to figure out--and Mr.
Besharov mentioned this--is that this is a time where it works
for people to upgrade their skills; but it doesn't work to
upgrade your skills if you can't work along with that or if you
can't have some sort of cash support to do that. For that
reason I would send them to Chairman Davis' State, to Kentucky,
which does probably one of the best jobs in the country of
really allowing people to do education and combine that with
work.
Mr. MCDERMOTT. Would they let this person, this couple, go
to community college----
Ms. PAVETTI. They would.
Mr. MCDERMOTT. Upgrade and get a welfare grant at the same
time?
Ms. PAVETTI Yes. What they would do in Kentucky, what
generally happens for people is they do encourage people who
have the skills and interests to go to community college, and
they provide a cash grant to help them get started. And then
they basically have used quite a bit of their TANF funds to do
work study so that they provide work for people after a year
because of the work participation requirement. So it is one
place where they probably could be able to figure out a way to
move forward.
But I think that our system is not set up to serve that
group of families. It is really set up on an expectation that
people don't want to work, and need to be required to work, so
that all that is generally provided for TANF recipients is job
search. So they are required to show up and to participate in a
class to look for jobs. There is not a lot of help that is
provided beyond that.
Mr. MCDERMOTT. No help for the children. Will they get onto
Medicaid for the kids?
Ms. PAVETTI Yes. I don't know what their assets are and how
that would play out. I don't know the assets rules as well as I
probably should. But they should be able to, if they meet the
asset rules, to be able to get food stamps and Medicaid and,
depending on the State, a cash grant.
Mr. MCDERMOTT. So the only thing they are eligible for is
food stamps.
Mr. BESHAROV. I would just add that you opened your
question with a statement that they have been on unemployment
for 99 weeks. And what I would ask: What did they do, and what
did we do for them in those 99 weeks? Because that is a long
time for them to just be looking for a job without getting a
different set of skills.
Look, it is very bad out there. I don't want to minimize
how much unemployment there is. But every day people get jobs.
There are about 3\1/2\ million available jobs today. I am sure
the President tonight is going to say that there are jobs
available for some number of people if we can retrain them.
Part of that ought to be in that 99 weeks, and we shouldn't be
asking TANF to do all the work here.
There are, as the chairman said, a whole set of programs
that have not been harnessed for this emergency; they have not
been harnessed, and they ought to be.
Chairman DAVIS. The gentleman's time has expired, but I am
going to indulge the panel in continuing this discussion for a
moment.
One of the challenges relates to integrating these siloed
programs that in many cases don't talk to each other. Within
certain constraints within States they have been able to get a
degree of integration, but often bump up against the Federal
statutes, which create additional costs and also has folks fall
through the cracks.
But I know Mr. Alexander was chomping at the bit over here
to share an insight. Since you came through the rain, I thought
we would just give him a chance to do so.
Mr. MCDERMOTT. It is on his time.
Chairman DAVIS. I was looking at this as bipartisan right
here.
Mr. MCDERMOTT. We share the extension.
Mr. ALEXANDER. Could you tell me which State you are from
again? I am sorry, maybe I missed it.
Mr. MCDERMOTT. Washington State.
Chairman DAVIS. Which is usually like the environment you
drove down in today.
Mr. ALEXANDER. Yes, absolutely.
You said they were 47 and 45, had a combined income of
$84,000. They have three children, so presumably they at least
have a high school education if they were making 40- to $50,000
a year. What I would say is that there are jobs available for
them. The jobs may not pay exactly as much as they were making.
Part of my job as a welfare director, I have been in this
business for over 15 years and have served at the head of
agencies in two States. Every time I go into a store, whether
it is Target, the Dollar Store, WalMart, I ask--I go up to the
desk and ask for an application for employment. And nine out of
ten times they give me the application. And I ask them: Are you
hiring? They say, yes, we are. And then when I ask them what
the general requirements are, most times it is basically a high
school diploma or a GED.
And I will tell you from my experience that we have a lot
of people in our programs, especially the food stamp program
which has no asset test, that have an abundance of an education
and they have assets and they choose not to go to work because
they are getting these benefits. And I have questioned some
people on the program as such.
What I would say to you is that I would like to speak to
this couple, if you don't mind, and try and help them find a
job. And I will tell you this, I was just in Philadelphia.
Mr. MCDERMOTT. Philadelphia.
Mr. ALEXANDER. I was in Philadelphia yesterday at what we
call an ``earn center,'' which is where clients come in to
actually find jobs. And there was a management job available
there, I can't remember the company, but it was a management
track job; not a management job, but a management track job.
And they were asking me--they were having trouble actually
encouraging people in the earn center to take the position. So
there are jobs out there.
And lastly, I just want to say that I am very interested in
the discussion of substance abuse because it does present
barriers to clients.
But I would like to sit and learn more from you. People
want to work and can work. And I will give you an example. In
Luzerne County in Pennsylvania, Lowes, which is a major
corporation, has a distribution center of 1.5 million square
feet. We have been working with Lowes to create jobs for
intellectually disabled and physically disabled individuals.
They have hired over 70 individuals with either intellectual or
physical disabilities. Their productivity is as good or if not
better than folks like you and I. Their tenacity to come to
work and their enthusiasm to come to work is better than you
and I, and they are very happy that they have these jobs. Lowes
happened to do this on its own with very little government
money.
We have to do as government workers and as Congress and as
States, we have to do a much better job of reaching out to the
business community to try and create jobs. Will there be
hundreds of thousands? I don't know. But certainly we can start
to place one individual at a time. And I believe we can do that
because the opportunities are there.
Chairman DAVIS. Thank you very much. I would like to
recognize Dr. Price from Georgia for 5 minutes.
Mr. PRICE. Thank you, Mr. Chairman. And I want to thank the
witnesses as well. This is an important topic and I think we
are beginning to have some interesting conversation now, and I
appreciate the input.
The folks that I hear from back home want to make--nobody
wants anybody to go without help when they need it. And they
want to know that the individual receiving the help is intent
upon getting back on their feet and back in the mix.
And so I want to touch on the incentives that are in place
right now that, as a couple of you have alluded to, make it
such that individuals look at the, entry-level job or the down-
income job from what they had before, and the incentives for
them not to engage in that position because of the assistance
that is provided, one. And, two, I want to--I have heard that
we aren't aligning the work requirement with other programs in
our system.
And I would ask kind of a general question: What is keeping
us from doing that? Is that our ineptitude? Or is that the
program is written in the wrong way or what? Mr. Alexander,
would you like to start?
Mr. ALEXANDER. Yes, I would like to start off. Yes, it is
the Federal Government. Because there is not a day that goes by
that I don't get emails from Washington, from the Federal
establishment, about new rules and regulations. And trying to
run a 20,000-employee welfare agency, the largest in the Nation
in Pennsylvania, I don't have time to read all that.
We need to have a new partnership with the Federal
Government, with States, so that we have clear and simplified
rules across all programs with clear performance measures. If
we had that, States can innovate and achieve excellence, and we
can work together with you to do that. The Federal Government
should be there to monitor our progress, incentivize us, and
pay us for performance. And if you do that, you will start to
see States work more like private businesses. But we can't. We
are inundated with the flood of rules and regulations and a
myriad of programs, myriad of agencies. It is USDA, it is
Department of Ed, it is HHS, it is CMS. We can't handle all
this.
So even--this crosses Democratic and Republican. This is
not a Republican issue. Most of my colleagues would agree that
we need a new relationship.
Now, some people may want more benefits, some people might
want less benefits. But the bottom line is we have to have
clear expectations, and we can't be trying to figure out rules
and regulations on a daily basis.
So we need to work across programs, start to bring some of
them together to comport with one another. Most of these
individuals or families exist in each of those programs, and we
need a new redesign. And I think working together, if you
engage the States, I think we can do this.
Mr. PRICE. Would you recommend that under a waiver of the
existing programs not being able to meet--or is it a new law?
Mr. ALEXANDER No. The reason why I would not encourage--
just by its nature, the word ``waiver'' means that the existing
program is broken. We need a new redesign of and clear goals
and performance measures that work: work retention, healthy
living, children in school, drug-free society. We need to have
these type of broad performance measures from the Federal
Government. The Federal Government needs to get out of the
business of trying to run what is going on in the State. And if
the Federal Government wants to do that, I will be happy to
give up my position and let them come in and just run
everything.
Mr. PRICE. Mr. Besharov.
Mr. BESHAROV. This might be the first time I disagree with
my learned friend here, Gary Alexander. Part of the problem is
the Congress and the committee structure, because many of these
programs are in different committees----
Chairman DAVIS. I would remind the gentleman that has been
a tradition since 1789. So.
Mr. CROWLEY. Has TANF been around that long, Mr. Chairman?
Mr. BESHAROV. I think I have seen the waiver process
generate knowledge and political support for reform. That is
what happened in welfare reform and other programs as well.
So, Gary, yes, if they can get it; but if not, something
like the super waiver that has been on the table for a number
of years would be very helpful. And then not to recognize--not
to not recognize what the chairman mentioned earlier, some
States are trying to work around this entirely by their IT
systems, which is to say if you can't fix it from Washington,
the power of computers now will enable many States to do much
of what we are talking about; not similar rules across States,
but will let the States figure out the best way to work the
programs together internally. And at a minimum, that ought to
be encouraged in any new legislation.
Mr. PRICE. My time has expired, but I think you are
absolutely right. I think that is the direction we should head,
is to allow the States to be able to have the flexibility and
then teach us what the heck we need to do to fix this.
Chairman DAVIS. I thank the gentleman. And now Mr. Crowley
from New York is recognized for 5 minutes.
Mr. CROWLEY. Thank you, Mr. Chairman. Thank you for holding
this hearing today, and I particularly want to thank Dr.
Wetzler from New York, and from the Bronx in particular, from
in his day job at Montefiore Hospital. So thank you for being
here today.
Dr. Pavetti, research has shown that women leaving the TANF
program are far more likely to stay employed if they have
adequate child care and subsidies to pay for the child care. I
have introduced Child First Act to increase funding for child-
care subsidies so the parents are better able to access child
care, which in many States costs more than a college tuition.
And I don't know about college tuition in New York, but I can
attest certainly to high school tuition.
I was wondering if you could discuss the role child-care
availability plays in helping parents find work, and maybe more
importantly, help them to keep that work and keep those jobs
after transitioning out of the TANF program.
Ms. PAVETTI. What we have learned through the years in TANF
is that there was an expectation that people would move into
low-paying jobs and they would move up a ladder, and that is
really not what we saw. So what happens is people move into
low-wage jobs and they stay in those low-wage jobs for very
long periods of time, which means that they cannot afford child
care, so that the only way they are able to work, particularly
in low-wage jobs, is to have a child-care subsidy.
One of the things we have also seen in TANF is States have
done very different things, so some of States have used a lot
of their TANF dollars for child care and others have used
lesser amounts. But what we do know is that you cannot have an
expectation of work without also having a way for people to
afford child care. It is not safe for kids, and it means a very
unstable workforce if parents don't have child care. So I think
it is a critical need. And I think that without it we can get
nowhere.
The other thing I think is important, as you said, you
increase funding. In many States, the TANF grant is so much
lower than the cost of child care, without additional funds
there isn't money to actually pay for the child care that is
required to go to work.
Mr. CROWLEY. Thank you.
Dr. Wexler, I am glad that you highlighted some of the work
that New York City is doing to make the TANF program work even
better, particularly with case management.
Is it fair to say, based on your experience and your
expertise, that New York has been successful in identifying
TANF recipients in need of substance abuse treatment without
requiring every TANF applicant or recipient to be drug tested?
Mr. WETZLER Well, I am sure there are about--today, about
12 percent of the caseload in New York City has identified
substance abuse disorder, and it comes through when they apply
for welfare. They get a basic screen at the welfare center, in
a sense they are self-identifying, and then they get referred
to us for a more thorough clinical evaluation----
Mr. CROWLEY. My question is, do you think that----
Mr. WETZLER. So there clearly are many, many more people
than that that actually have a substance abuse disorder that
are on the welfare system, but because they actually are
participating and being referred for the work activities that
are required, it is obviously not severe enough to interfere
with that. So even though they are not identifying it, it isn't
that severe or would ultimately become apparent when they
actually are on the work site, in which case they would then be
referred.
Mr. CROWLEY. I think the country has a lot to learn what
New York is doing. If New York was required to drug test every
TANF applicant and recipient, that would most likely leave less
money for treatment programs like yours.
Do you think it is a better investment, given the nature of
the resources that we have, to drug test everyone or to provide
treatment to those who have been identified as needing
assistance, as is done now?
Mr. WETZLER. Well, it would be a huge, huge, practical
problem to actually drug test everybody. It would be hugely
expensive. There are two ways of doing drug testing. You can
either do an oral swab, which is very easy but very expensive;
you can do urine screens, which is much less expensive but kind
of difficult to enforce. So it would be very difficult. It
would be very expensive.
The other thing I would say is that you would probably
identify somewhere around 35 to 40 percent of the caseload that
would test positive in that case, and it is not clear that you
actually would be able to have the treatment capacity to
receive all those people into treatment. So it is not clear
what you would even do with that information if you had it.
Mr. CROWLEY. Dr. Pavetti, can you comment on that, please?
Ms. PAVETTI. I think that the evidence we have from other
programs or studies suggest that that number is too high. I am
not sure it would be that high at all. And Florida's experience
of doing drug testing has a very low percentage. So I think
that the percent who would test positive wouldn't be that high.
The other thing I think is important about substance abuse
is that there seems to be an impression that most States exempt
people who have substance abuse problems.
I actually did work on substance abuse programs in TANF
agencies, and that really is not the case. What New York has
done is very much what other States do except most States don't
do as much around providing case management or the treatment.
But they do, if someone has a substance abuse program issue,
they require them to participate in treatment, or they require
them to participate in work, and they are sanctioned just like
everybody else if they do not participate. So I think the idea
that they are exempted is just a misnomer, and not accurate,
based on what States actually do in practice.
Mr. CROWLEY. I thank you both. My time has run out.
I appreciate again, Mr. Chairman, your giving the
opportunity for this hearing. I think the Nation has a lot to
learn in terms of what is happening in New York today in terms
of TANF and drug treatment, and I appreciate this hearing today
very much. Thank you.
Chairman DAVIS. Thank you very much. And I would like to
thank everybody for taking the time to come here today. I
appreciate your help and understanding----
Mr. MCDERMOTT. Mr. Chairman, can I make a unanimous consent
request?
Chairman DAVIS. Yes.
Mr. MCDERMOTT. I ask unanimous consent that an article from
today's Politico, September 8, by Joe Stiglitz, called ``All
Roads Won't Lead to Economic Downfall and Doom,'' be entered
into the record.
Chairman DAVIS. Without objection, so be it.
[The information follows:]
Chairman DAVIS. If members have additional questions, they
will submit them to you in writing, and we would appreciate
your responses back to us for the record as well as to them.
And with that, the committee stands adjourned.
[Whereupon, at 3:30 p.m., the subcommittee was adjourn]