[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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                      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.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``Hearings.'' Select the hearing for which you would like to submit, 
and click on the link entitled, ``Click here to provide a submission 
for the record.'' Once you have followed the online instructions, 
submit all requested information. Attach your submission as a Word 
document, in compliance with the formatting requirements listed below, 
by the close of business on Thursday, September 22, 2011. Finally, 
please note that due to the change in House mail policy, the U.S. 
Capitol Police will refuse sealed-package deliveries to all House 
Office Buildings. For questions, or if you encounter technical 
problems, please call (202) 225-1721 or (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word format and MUST NOT exceed a total of 10 pages, including 
attachments. Witnesses and submitters are advised that the Committee 
relies on electronic submissions for printing the official hearing 
record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. All submissions must include a list of all clients, persons, 
and/or organizations on whose behalf the witness appears. A 
supplemental sheet must accompany each submission listing the name, 
company, address, telephone, and fax numbers of each witness.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available on 
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]





                                 
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