[Senate Hearing 112-775]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-775
 
                    COMBATING POVERTY: UNDERSTANDING
                      NEW CHALLENGES FOR FAMILIES
=======================================================================



                                HEARING

                               before the

                          COMMITTEE ON FINANCE

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 5, 2012

                               __________

                                     
                                     

            Printed for the use of the Committee on Finance



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                          COMMITTEE ON FINANCE

                     MAX BAUCUS, Montana, Chairman

JOHN D. ROCKEFELLER IV, West         ORRIN G. HATCH, Utah
Virginia                             CHUCK GRASSLEY, Iowa
KENT CONRAD, North Dakota            OLYMPIA J. SNOWE, Maine
JEFF BINGAMAN, New Mexico            JON KYL, Arizona
JOHN F. KERRY, Massachusetts         MIKE CRAPO, Idaho
RON WYDEN, Oregon                    PAT ROBERTS, Kansas
CHARLES E. SCHUMER, New York         MICHAEL B. ENZI, Wyoming
DEBBIE STABENOW, Michigan            JOHN CORNYN, Texas
MARIA CANTWELL, Washington           TOM COBURN, Oklahoma
BILL NELSON, Florida                 JOHN THUNE, South Dakota
ROBERT MENENDEZ, New Jersey          RICHARD BURR, North Carolina
THOMAS R. CARPER, Delaware
BENJAMIN L. CARDIN, Maryland

                    Russell Sullivan, Staff Director

               Chris Campbell, Republican Staff Director

                                  (ii)




                            C O N T E N T S

                               __________

                           OPENING STATEMENTS

                                                                   Page
Baucus, Hon. Max, a U.S. Senator from Montana, chairman, 
  Committee on Finance...........................................     1
Hatch, Hon. Orrin G., a U.S. Senator from Utah...................     2

                               WITNESSES

Haskins, Dr. Ron, co-director, Center on Children and Families, 
  Brookings Institution, Washington, DC..........................     4
Lein, Dr. Laura, dean, School of Social Work, University of 
  Michigan, Ann Arbor, MI........................................     6
Brown, Kay, Director, Income Security, Government Accountability 
  Office, Washington, DC.........................................     8

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Baucus, Hon. Max:
    Opening statement............................................     1
Brown, Kay:
    Testimony....................................................     8
    Prepared statement...........................................    29
Haskins, Dr. Ron:
    Testimony....................................................     4
    Prepared statement...........................................    38
Hatch, Hon. Orrin G.:
    Opening statement............................................     2
    Prepared statement...........................................    50
Lein, Dr. Laura:
    Testimony....................................................     6
    Prepared statement...........................................    52

                             Communication

Center for Fiscal Equity.........................................    59

                                 (iii)


                    COMBATING POVERTY: UNDERSTANDING



                      NEW CHALLENGES FOR FAMILIES

                              ----------                              


                         TUESDAY, JUNE 5, 2012

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10:04 
a.m., in room SD-215, Dirksen Senate Office Building, Hon. Max 
Baucus (chairman of the committee) presiding.
    Present: Senators Bingaman, Wyden, Nelson, Carper, Cardin, 
Hatch, Crapo, Cornyn, and Thune.
    Also present: Democratic Staff: David Schwartz, Chief 
Health Counsel; Diedra Henry-Spires, Professional Staff; and 
Callan Smith, Research Assistant. Republican Staff: Chris 
Campbell, Staff Director; and Becky Shipp, Health Policy 
Advisor.

   OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR FROM 
            MONTANA, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. The hearing will come to order.
    Robert Kennedy once said, ``As long as there is plenty, 
poverty is evil.''
    Nearly 50 million Americans are currently living in 
poverty. That includes 16 million children. In 2009, more than 
31 percent of working families were in poverty. That is more 
than 10 million people.
    Our safety net is designed to give those in poverty a 
fighting chance. Temporary assistance for needy families, or 
TANF, is one of those bedrocks. TANF gives people access to job 
training and education, and it helps fight the evil of poverty.
    Today we will look at TANF and the new challenges facing 
Americans in poverty. Until the 1996 reform law, welfare was 
open-ended. But through reform, Congress gave the system 
direction. It now focuses on jobs and promotes self-
sufficiency. Figuratively speaking, it aims to teach people to 
fish.
    TANF now helps some people by funding child care, 
transportation, and job search support. In 2005, the Deficit 
Reduction Act changed the way States managed TANF caseloads and 
counted participation in some programs. Those changes did not 
focus on serving families and helping people find jobs. 
Instead, some States used the changes to artificially reduce 
caseloads, and they used TANF funds for other programs. We saw 
this come to play during the Great Recession.
    TANF did not respond to the recession as many of us would 
have hoped. Other safety net programs expanded to make sure 
families were properly fed and had access to medical care; 
TANF, however, did not.
    Some States actually cut caseloads. But people were not 
rising out of poverty. Fewer than 2 million families received 
cash assistance through TANF last year. That is far less than 
in previous years.
    We, of course, want to see the numbers of TANF recipients 
decrease, and we want it to be for the right reason--because 
people are finding work. We need to make sure it is not because 
people are falling through the cracks without assistance or 
without a job, and we need to learn from the lessons of the 
Great Recession.
    TANF works well when there are jobs open for people to 
fill. But when there are millions of people looking for work, 
the program does not respond as well as it should. Our goal 
should be to craft a system that works regardless of the 
economic climate.
    TANF expires on September 30. We have an opportunity to 
strengthen it as we work toward reauthorization. And we need to 
keep our core principles in mind through that process.
    The United States must have a strong social safety net, and 
it is not just for the sake of having one. The American people 
are our greatest national resource and, as a Nation, we cannot 
afford to leave anyone behind. Leaders cannot lead if they are 
hungry. Inventors cannot invent if they are homeless.
    So let us prepare for a full reauthorization of TANF. And 
let us remember that our Nation is only as great as the least 
among us. And let us move forward to fight the evil of poverty.
    The Chairman. Senator Hatch?

           OPENING STATEMENT OF HON. ORRIN G. HATCH, 
                    A U.S. SENATOR FROM UTAH

    Senator Hatch. Thank you, Mr. Chairman. I want to thank you 
for holding this important hearing on poverty and the effect it 
has on children and families.
    With our economy still struggling, poverty remains a 
critical challenge for our Nation. The 2010 poverty rate of 
15.1 percent was the highest seen in the past 17 years.
    The current economic recession is especially acute for 
children. In 2010, over one in five children were poor in this 
country. That is up from one in six in 2006.
    Poverty is also an incredibly complicated issue, one that 
the Federal Government can only address within the bounds of a 
Federal system that reserves most of these policy decisions to 
the States.
    Now, there will continue to be a robust discussion on the 
role of the Federal Government as it relates to poverty. One 
thing we can certainly agree upon, however, is that poverty is 
bad for children and, in some cases, is a risk factor for child 
neglect or maltreatment.
    It is that correlation between poverty and the potential 
for child neglect that I intend to focus on today. According to 
data assembled by the Center for Law and Social Policy, poverty 
is the single best predictor of child maltreatment. Children 
living in families with incomes below $15,000 were 22 times 
more likely to be abused or neglected than those living in 
families with incomes of $30,000 or more.
    Now, I want to be clear. Poverty does not cause neglect, 
and being poor does not mean that one is a neglectful parent. 
But poverty does add stress to already overstressed families 
and creates conditions that often are detrimental for children.
    Parents living in deep and persistent poverty are often 
tired, frustrated, and frightened, leading to short tempers, 
sometimes directed towards their children. Many parents in 
poverty suffer from substance abuse or mental illness and are 
unwilling or unable to get support for these problems. And 
subpar housing exposes children to real health risks.
    Unfortunately, the programs under the jurisdiction of our 
committee designed to address poverty do not work well 
together, even though they are essentially serving the same 
families. The most salient example of this is the Temporary 
Assistance for Needy Families, or TANF. TANF is a block grant 
to States for their use in ending dependence on government 
benefits and, more broadly, to promote child well-being.
    Over time, the focus of TANF has shifted from working with 
job-ready adults and preparing them for work to a funding 
stream largely dedicated to purposes unconnected to job 
readiness. Based on the spending and the composition of the 
caseload, one can argue that TANF, as a robust welfare-to-work 
program, has all but diminished and, in large part, been 
replaced by the emergence of TANF as a child welfare program.
    The authorization for the TANF programs expired at the end 
of fiscal year 2010. During the year leading up to the 
expiration of TANF and each subsequent year, the Obama 
administration has failed to propose a comprehensive 
reauthorization of these programs.
    If this committee decides to reauthorize TANF next year, 
members will need to decide whether or not to recalibrate the 
program back to a welfare-to-work program. Instead, if members 
acknowledge and accept that TANF spending and much of the cash 
assistance is directed to low-income children, then we need to 
address the fact that this TANF spending is largely unaccounted 
for and that TANF agencies do not coordinate their spending and 
services with child welfare agencies.
    I hope that the next few years will usher in much-needed 
reforms to the child welfare system. And as I believe we will 
learn today, the TANF block grant will have to be a part of 
that conversation.
    Mr. Chairman, I really appreciate you holding this hearing. 
I look forward to hearing from our witnesses. And it is an 
important hearing, as far as I am concerned.
    [The prepared statement of Senator Hatch appears in the 
appendix.]
    The Chairman. Thank you, Senator, very much.
    I am now pleased to welcome our witnesses. Today we will 
hear from three: Dr. Ron Haskins, co-director of the Center on 
Children and Families at the Brookings Institution; Dr. Laura 
Lein, the dean of the School of Social Work at the University 
of Michigan; and Kay Brown, Director of Income Security at the 
U.S. Government Accountability Office.
    Thank you, all of you, very, very much for taking the time 
to testify, as Senator Hatch said, on something that is very, 
very important. And we all look forward very much to your 
testimony and encourage you to be candid, forthcoming, direct 
in your 5- to 6-minute verbal statements. But your prepared 
remarks will automatically be included in the record.
    So why don't you begin, Dr. Haskins?

 STATEMENT OF DR. RON HASKINS, CO-DIRECTOR, CENTER ON CHILDREN 
      AND FAMILIES, BROOKINGS INSTITUTION, WASHINGTON, DC

    Dr. Haskins. Thank you, Mr. Chairman. Chairman Baucus, 
Ranking Member Hatch, and members of the committee, thank you 
very much for inviting me. It is a great privilege to testify 
before this committee.
    I am going to talk about four issues in 5 minutes. That 
makes me an issue-a-minute man. I am going to talk about 
poverty trends, spending on programs, major causes of poverty, 
and then what we should do about poverty.
    So issue one: the trends in poverty. I included a figure in 
my testimony that, to me, has two big surprises. One is, we 
have made virtually no progress against poverty since 1975, 
despite the fact that we are spending a ton more money. And 
secondly, the poverty rate among the elderly, which in most 
societies is the highest, --most likely to be poor--is lower 
than for children in our society.
    So those are two exceptionally important facts. We need to 
buckle down and figure out what to do about poverty, and we 
ought to especially concentrate on children.
    Issue two: spending. Between the States and the Federal 
Government, we spend about $1 trillion on means-tested 
programs, and this number has increased almost every year since 
1965. So the idea that we are not spending enough money is 
probably incorrect. We could be spending it poorly, it might 
not be focused on the poor, some of the programs might be 
unsuccessful, but we are spending a lot of money--about $13,000 
per poor person.
    Now, a lot of that is on health care--critics will always 
mention that--about 45 percent of it. But Congress decided that 
is where they wanted to spend the money. So, unless you want to 
change that, 45 percent is spent on health care. But the Nation 
has made a great commitment to helping the poor, and it 
increases every year.
    The third issue: the causes. I think four are especially 
important. The first is work rates. We are in a long-term 
decline in work rates among males in the United States. The 
work rate among young males is down, especially young black 
males--and I am referring here to before the recession. I do 
not want to confuse this with the recession. These are trends 
before the recession.
    So we have a real problem with male employment in the 
United States for reasons that I do not think are very clear.
    For females, though, the opposite is true. Females have 
worked more. Everybody is aware that married women have joined 
the labor force since World War II, and in increased numbers. 
It has gone down a little bit now. But never-married mothers, 
the most disadvantaged, the poorest group of mothers, have had 
a spectacular increase in employment. And even today, after two 
recessions, the likelihood that they have a job is greater, 
about 20 percent, than it was before welfare reform. So that 
group is working a lot. Still, we need to boost work rates.
    Second, wages. These are astounding at the bottom of the 
distribution. Our wages at the 10 percentile and below in the 
United States, on average, are where they were 30 years ago.
    It is hard to make progress against poverty because we are 
always going to have 10 percent of the people below the 10 
percentile. It is an astounding mathematical fact, as I point 
out in my testimony. And as long as wages do not change, no 
matter what we do about the minimum wage, it is a real problem 
to help people get out of poverty. If they work full-time at 
the minimum wage, they still will not be out of poverty.
    Family composition is the 5th horseman of the apocalypse. 
It is the biggest cause of poverty, in my estimation. We have 
had a huge increase in female-headed families. Their poverty 
rates are 4 or 5 times the rate for married couple families, 
and the most disadvantaged are never married. About 70 
percent--even more than 70 percent of black children--about 45 
percent of white children, and 42 percent of all American 
children are born outside of marriage, and so their probability 
of being in poverty is very high. So family composition is a 
huge issue.
    And finally, education is a very big issue. I would say 
that our educational system, both at the preschool level, K 
through 12, and post-secondary, needs a lot of work. I would 
not say necessarily it is a failure, and I think the most 
promising is preschool. I will talk about that in a minute.
    So now let me talk about a few strategies to fight poverty. 
And I want to preface my remarks by saying I think personal 
responsibility is an absolute key here.
    Three of the four causes that I mentioned have a 
substantial component of personal choices. And, if people do 
not make better choices, no matter what you do in this hearing 
and what we are doing in Congress, we are still going to have a 
big problem with poverty. We have to do something about 
people's decisions to drop out of school, about decisions to 
work, and about decisions to get married before they have 
children.
    So the first strategy that has worked--it is not hard to 
understand--is to give them money. That is what we do with the 
elderly. We did it especially in the 1970s, and we have a low 
elderly poverty rate, primarily as a result of Social Security, 
which is something that Congress did.
    That strategy will not work for young, able-bodied 
Americans, because Americans do not think that able-bodied 
people should get welfare.
    So the second strategy is to do everything possible to 
encourage and even force people to work and then subsidize 
their income. I would point out to the committee that this is a 
highly bipartisan solution: on the one hand, very tough work 
requirements; on the other hand, very generous work supports--
earned income tax credit, Medicaid, child care, other programs.
    I would say we have passed at least 40 pieces of 
legislation over the period starting roughly in the early 1980s 
to make our system of means-tested benefits more friendly to 
working families. In the old days, if you went to work, you 
lost everything, and that is no longer the case. So we need to 
emphasize work, and we need to maintain the work support 
system, the EITC, child tax credit, and so forth.
    Then the two other things I would mention just in passing 
are, one, education--I think we should focus on preschool. We 
have very strong data that a high-quality preschool could make 
a big difference. It is not very controversial for the Federal 
Congress to be involved in preschool, because it has been for 
so long.
    And I think our child care that we spend a lot of Federal 
dollars on is the heart of the problem, because it is of 
average quality or worse, and that is where we could really 
make some progress by increasing the average quality of child 
care.
    And finally, non-marital births. We have lots of 
strategies. We can reduce teen pregnancy. We have reduced teen 
pregnancy every year since 1991, except for 2 years. So we have 
a lot of strategies there.
    Even in the 20-somethings, we have a number of programs, 
including more coverage or comprehensive family planning 
services and mass advertising campaigns, plus the teen 
pregnancy programs I mentioned. If we spent more money on those 
three programs, we would reduce non-marital birth rates, and 
that would be a good start toward addressing poverty.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Haskins appears in the 
appendix.]
    The Chairman. Thank you, Doctor. That was very good.
    Dr. Lein, you are next.

   STATEMENT OF DR. LAURA LEIN, DEAN, SCHOOL OF SOCIAL WORK, 
             UNIVERSITY OF MICHIGAN, ANN ARBOR, MI

    Dr. Lein. Thank you. I also want to thank Chairman Baucus 
and Ranking Member Hatch and members of the committee for 
inviting me here, and also for allowing me to join Ron Haskins 
and Kay Brown on this panel.
    I am a social anthropologist and social work educator, and 
I work on families in poverty and the institutions that serve 
them. And today--I do not want this to be a contest, Ron--I am 
going to try to highlight six themes about families from my 
experience and illustrate them with examples representative of 
the data I have worked with.
    Theme number one: both welfare-eligible and welfare-using 
populations are varied. Researchers in Washington State found 
five subgroups ranging from quick leavers who left TANF within 
a year and did not return to stayers who continued on TANF with 
barely a break. And these groups have fairly different needs.
    Second, both welfare support and the income from low-wage 
labor leave families struggling. Families cannot sustain 
themselves on welfare alone or on low-wage work alone, and 
those relying on these low incomes can experience what I call a 
cascade effect, when a relatively small problem triggers life-
changing events.
    One Texas woman I interviewed had moved off welfare into 
work and out of public housing into her own apartment. She 
still depended on subsidized child care for her two children. 
But when her 2-year-old bit another child at daycare, he was 
asked to leave, and her child care subsidy lapsed when she 
could not find new child care within the 10 days allowed. She 
could not work regularly. She lost her job and her eligibility 
for a renewed child care subsidy. She could not pay her rent 
and was evicted. Eight weeks from the biting episode, she was 
jobless, homeless, and without child care to allow her to hunt 
for a job or to work.
    The third theme: TANF rates have remained stable in a time 
of recession, but disconnected households with neither earned 
income nor welfare income have increased. Estimates say that 
between 13 percent and 20 percent of single-parent poverty 
households are disconnected at any one time.
    One Chicago woman, in a study by Seefeldt and Horowski, had 
worked all of her life and never been on welfare. As the 
recession deepened, her hours were reduced. Then she was 
injured on the job. Her employer contested her application for 
unemployment, and she was not yet eligible to apply for TANF. 
Her car was repossessed, making doctors' visits for her injury 
and her job search almost impossible. She cut back on her own 
eating to purchase food and then prepare meals to sell for 
others. It was 4 months before she received unemployment 
benefits.
    Theme number four: more families are living in extreme 
poverty, often leaving them debilitated by untreated medical 
conditions and extensive debt. Shaefer and Edin estimate that, 
as of the beginning of 2011, about 1.46 million United States 
households, with about 2.8 million children, were surviving on 
$2 in cash or less in income per day per person in a given 
month.
    Theme number five: the jobs available for low-skilled or 
low-
educated workers leave the working poor particularly 
vulnerable. Chicago researchers Lambert and Henly studied low-
wage work in retail and hospitality. Successful applicants 
provide lots of availability. ``I can work anytime between 8 
a.m. and 8 p.m. I might be assigned, say, around 25 hours per 
week, with the timing and number of hours varying each week. 
However, my employer expects that I can be available any hours 
between 8 and 8. Needing more money, I take on a second job. 
However, when that job conflicts with hours assigned by my 
first job, I am punished with reduced hours in my first job. 
They filed what they called the `full-time, no hours week.'''
    Unemployment and under-employment also affect the men who 
father children in low-income single-parent families, leaving 
both them and the families impoverished.
    Six, there are a number of policies that I think can work 
for families, and, in some ways, this echoes what we have just 
heard. While paid work is the core of family stability, it is 
enabled by work supportive services, including a robust EITC, 
TANF--particularly when used as a bridging program for families 
facing time-
limited periods of need--access to child care and health care, 
a gradual diminution of welfare benefits as recipients enter 
work so that they receive supports necessary for their 
stabilization, and emphasis on best employment practices so 
that parents can work and parent simultaneously.
    We also need to look at alternate programs for parents 
physically or mentally unable to work--their access to 
disability services and their access to supports, such as 
supported work placements and longer-term income and 
rehabilitative assistance. And we need programs that encourage 
and reward fathers' fiscal and logistical involvement, child 
support programs that encourage that involvement, and training 
and placement programs for men. And overall, we need 
opportunities for program experimentation and evaluation to 
support low-income families and children.
    Thanks very much.
    [The prepared statement of Dr. Lein appears in the 
appendix.]
    The Chairman. Thank you, Doctor, very much.
    Ms. Brown, you are next.

 STATEMENT OF KAY BROWN, DIRECTOR, INCOME SECURITY, GOVERNMENT 
             ACCOUNTABILITY OFFICE, WASHINGTON, DC

    Ms. Brown. Chairman Baucus, Ranking Member Hatch, and 
members of the committee, I am pleased to be here today to 
discuss our work and the role of TANF in helping poor families.
    Over the past 15 years, Federal and State spending for TANF 
has totaled about $406 billion, representing a significant 
investment in efforts to promote self-sufficiency and combat 
poverty. My remarks, based on previously published GAO reports, 
will focus on the performance of TANF as a safety net, as a 
welfare-to-work program, and as a funding source for other 
services.
    First, on TANF as a safety net. The story of TANF's early 
years is well known. The strong economy combined with the new 
focus on work contributed to a decline in the rolls of more 
than 50 percent.
    Many former welfare recipients increased their income 
through employment. However, much of the caseload decline 
resulted from fewer eligible families participating in the 
program, perhaps in response to TANF's new rules, such as work 
requirements and time limits. We have been particularly 
concerned about a small, but possibly growing portion of 
families that were eligible for TANF but did not work, had very 
low incomes, and did not receive cash benefits.
    More recently, we had the first test of TANF during severe 
economic times. The relatively modest national caseload 
increase of 13 percent, along with caseload decreases in some 
States, raises questions about the responsiveness of TANF.
    For example, we recently estimated that, among poor and 
near poor families that lost jobs in the recession and used up 
their unemployment benefits, 40 percent received food stamp 
benefits, yet less than 10 percent received TANF assistance.
    Next, on TANF and moving parents into work. TANF's work 
participation requirement is the primary Federal tool to 
encourage States to prepare parents for work. States are 
expected to ensure that 50 percent of work-eligible families 
receiving cash assistance are engaged in certain federally 
defined work activities.
    However, States have generally engaged fewer families than 
envisioned, closer to one-third, with little change over time. 
Despite this, States can still meet their work participation 
requirement by relying on several policy and funding options. 
As a result of these options, States do not have the incentive 
to engage more families or to work with families with complex 
needs.
    Lastly, on the use of TANF for a broad array of services. 
TANF plays a significant role in State funding of other 
programs and services for low-income families, as allowed under 
program rules. In fact, in fiscal year 2011, Federal and State 
TANF expenditures for purposes other than cash assistance 
amounted to 71 percent of the total. These purposes included 
child care, child welfare, earned income tax credits, and teen 
pregnancy counseling.
    However, we do not know enough about how these funds are 
used and who benefits. This information gap hinders decision-
makers in considering the success of TANF and what tradeoffs 
might be involved in any changes to TANF when it is 
reauthorized.
    In conclusion, the Federal-State TANF partnership makes 
significant resources available for families with children. 
With these resources, TANF has provided financial support to 
these families, helped many parents step into jobs, and 
provided States with flexible funding to support programs 
consistent with TANF goals.
    At the same time, there are questions about the strength 
and breadth of TANF as a safety net. Many eligible families, 
some of whom have very low incomes, are not participating. The 
focus on work participation rates has helped some families gain 
employment, but it may not provide States with incentives to 
engage the most difficult to serve.
    And finally, while States have used TANF to support a 
variety of programs, we do not know enough about this spending 
and whether this flexibility is resulting in the most efficient 
and effective use of funds at this time of scarce government 
resources and great need among the Nation's low-income 
families.
    This concludes my prepared statement. I am happy to answer 
any questions.
    [The prepared statement of Ms. Brown appears in the 
appendix.]
    The Chairman. Thank you, all of you, very much.
    My staff gave me a startling statistic, and I would like 
you to respond and indicate what you believe the solutions are. 
You have already touched on it a little bit.
    The statistic is, the Untied States ranks 34th out of 35 
economically advanced countries on child poverty, just ahead of 
Romania--34th out of 35, just ahead of Romania on child 
poverty.
    I do not know the source of that. I am going to take it 
that it is accurate. I think it is a Census Bureau satistic. 
That is not good.
    And, Dr. Haskins, you have listed several causes. You 
mentioned that work rates are so low, wages are not keeping up, 
family composition is deteriorating, and we have a weak 
education system. And you also mentioned in your presentation 
that, although the elderly are doing a little better, the 
children are doing a lot worse. And this number seems to 
reflect that.
    Can we focus a little bit on the kids? How are we going to 
get more kids out of poverty?
    Dr. Haskins. The first thing I would say is that we are 
going to need resources. We have a lot now, but we are going to 
lose some of them inevitably over the next 2, 3, 4, 5 years 
when Congress at last decides to deal with the deficit.
    So I think in the long run, the number one thing we have to 
do is to at least slow the rate of growth in programs for the 
elderly and increase the rate of growth in programs for 
children, and especially programs that are focused on 
children's development, like high-quality preschool programs.
    We have abundant data from very good scientific experiments 
that high-quality preschool can increase kids' development and 
make them ready for school, and we may have a number of good 
studies that show long-term impacts on lower teen pregnancy 
rates, higher college admissions, and so forth.
    So that would be a place where we could invest. And, even 
if we could not get money from the programs for the elderly, by 
reducing the rate of growth--not cutting them, but reducing the 
rate of growth--we should be able to figure out a way to do it 
with the poverty resources. Of course, the committee structure 
of Congress is not exactly helpful in doing that. But that way 
would be much more productive to invest money there.
    Secondly, I think that the work strategy, as other 
witnesses said--you cannot get out of poverty in the United 
States if you are only on welfare, and you cannot get out of 
poverty in the United States, especially if you have two or 
more children, if you work in a minimum wage job.
    So we cannot command that the employers pay more than a 
minimum wage. We could do that, but we would lose some jobs if 
we did it. The better strategy is the one that we have adopted, 
which is to subsidize the earnings to low-income families. And 
our earned income tax credit, the child tax credit, our 
Medicaid program, even our food stamp program, all made 
important changes since roughly the mid-1980s all the way up 
until the last that I know of, where, during the recession, we 
made a number of changes in the EITC and the child tax credit 
that made it more generous to working families.
    So that is the strategy that works. That is the only thing 
I think that we have done that will produce a fairly short-term 
impact on poverty.
    So we have to increase work by single mothers and, 
hopefully, by males as well, and subsidize their earnings. We 
need to maintain that system. We have something that works. We 
need to expand it and stick with it.
    The Chairman. If we are 34th out of 35, what can we learn 
from other countries? What do other countries do that might be 
helpful here?
    Dr. Haskins. Well, first, I have never seen that number 
before. There are lots of big debates in the scholarly world--
--
    The Chairman. Let us assume it is close. What can we learn 
from other countries?
    Dr. Haskins. It depends on what you count. Like, if you use 
an artificial poverty measure, it is crazy. The official 
poverty measure--all these programs that I just talked about 
are included in the official poverty measure.
    The Chairman. This is UNICEF. That is the source of this.
    Dr. Haskins. That makes it even more doubtful.
    The Chairman. Whatever it is, you are not condoning it.
    Dr. Haskins. No. I am not condoning it, but we ought to 
think about the problems that we have in the United States. 
There are some things we can learn from foreign countries.
    The Chairman. I was going to ask. Do any come to mind?
    Dr. Haskins. We have done a number of things that they have 
done, and they have done a number of things we have done.
    For example, people tend to think of Europe as a bunch of 
liberal socialists. They had very strong work requirements, not 
only in their poverty programs, but also in their disability 
programs, and even they are trying to figure out ways to 
encourage the elderly to work, because they are following the 
principle that, in the 21st century, governments are not going 
to make it unless they have more people working and paying 
taxes and fewer people getting benefits.
    So I think they have learned something from us. We have 
learned from them the importance of a social safety net, and I 
think we do have a fairly reasonable safety net.
    I would point out to the committee that in 2009, even 
though TANF was abysmal--I admit that, and we should talk about 
that, and the committee should address it during 
reauthorization. But nonetheless, our other programs expanded, 
and poverty did not increase in 2009, despite the huge increase 
in unemployment, and it was almost totally because of 
government programs that kept people out of poverty.
    So that is a great achievement of our system, and I think 
part of that we learned from Europe about the importance of 
having a safety net.
    The Chairman. Well, I think it is just astounding. In fact, 
it is more than a tragedy that so many kids live in poverty. It 
just is an outrage. And I just think our country deserves a big 
black eye for not addressing it more efficiently.
    My time has expired.
    Senator Hatch. Dr. Lein?
    The Chairman. Although my time has expired, Senator Hatch 
is being very generous, suggesting that you be able to respond.
    Dr. Lein. It is important that I think we can learn both 
about how to coordinate early childhood education from the 
approaches other countries have taken so that it is more 
universally available, and secondly, to recognize that the 
costs of health care and the damage done to families by injury 
and lack of health treatment are considerable and that 
bolstering health care, particularly for low-income adults, can 
make a change in our poverty levels.
    The Chairman. Can you give an example of that coordination?
    Dr. Lein. The kinds of coordination? So, in our country, we 
have basically three different systems that provide child care 
to impoverished adults--to impoverished parents for their 
children. We have the Head Start program, we have subsidized 
child care, and, in most locales, we have pre-kindergarten.
    Each of those is for different subgroups of children, and 
none of them is reaching all eligible children----
    The Chairman. All right.
    Dr. Lein [continuing]. Unlike a system that has it more 
tied in to public schools as an accepted part of the schooling 
system or in a series, as they have in France, of places where 
you can take children, and, again, it is fairly universally 
available.
    The Chairman. Thank you.
    Senator Hatch?
    Senator Hatch. Thank you, Mr. Chairman.
    Dr. Haskins, the most recent data from the Department of 
Health and Human Services reveals that nearly 55 percent of 
work-eligible adults receiving assistance are engaged in zero 
hours of activity.
    I would like you to comment on that statistic. And also, do 
you believe it was the intention of members of Congress and 
President Clinton that, in over a decade and a half since 
welfare reform, more than half the welfare caseload would be 
doing absolutely nothing?
    Dr. Haskins. Well, of course it was not. I worked on the 
welfare legislation when I was with the House Ways and Means 
Committee, and there is no question that there was bipartisan 
agreement that more people should work and that the cash 
welfare system should not just dispense cash, it ought to 
encourage employment, and it does that now.
    However, I think part of the problem is--it is astounding 
to me that, after 1996, the States ran programs that were very 
successful under almost every count. There was a problem at the 
bottom, and we can talk about that if you want to. I do not 
want to say welfare reform was a magic bullet, but it did a lot 
that people thought was impossible.
    We had a 40-percent increase in a 4-year period in the 
percentage of never-married mothers, the most disadvantaged 
group, who actually had jobs. So that was very successful and 
subsidized by EITC and so forth.
    But then in the Deficit Reduction Act, I think we really--I 
think we made a mistake. We tightened the screws on the States. 
I am not sure why we did that. The States were performing 
fairly well. And we put a lot of requirements in the DRA that I 
think are very difficult for States to meet.
    And, at the same time, I would even question--and I hope 
the committee looks into this carefully--the block grant 
structure, because as GAO points out--and they do have previous 
reports that show that money is being spent. We allowed the 
States to spend it any way they wanted to as long as it was on 
low-income families. They could not build bridges and so forth.
    So I think that is an issue, too. If we were to do the kind 
of things we are talking about here, that is, provide more work 
services for people who are really disadvantaged, those would 
be more expensive than what the States are doing now. They 
would have to get that money back, and they would have to get 
it back from their own State programs, and that is very 
difficult.
    This is what the committee should look into. So that is a 
big issue.
    And secondly, the work requirement is so stiff, and the 
counting is so green eye shade--I recently have had the 
experience of calling all the State TANF directors to find out 
how their programs survived during the recession, and it is 
amazing to me that over half of them have said that the 
paperwork burden for counting work and hours is so heavy and so 
difficult that it distracts them.
    Now, that is a typical excuse that a bureaucrat makes, but 
I have heard it so often and it does make such sense, that I 
think there are issues here. And we could do something at the 
Federal level to do something about these work requirements. 
That there be more than 70 percent of the caseload or something 
should be achievable, if they are doing at least something, but 
they are not meeting the work requirements as they are spelled 
out in the current regulations and statutes.
    Senator Hatch. Dr. Lein, in your written testimony, you 
describe the need for fragile families to form connections, 
both ``tight'' connections to an informal support system and 
``loose'' connections to community and civic organizations.
    What advice do you have for this committee on policies that 
could promote these types of connections?
    Dr. Lein. I think there are two different kinds of 
approaches to take in looking at how you help families become 
seated in the larger society, where they can reach out for 
assistance and receive assistance in different ways.
    One is to support them in the kinds of tight networks, or 
networks that are likely to actually deliver help in 
emergencies. I think that is one of the reasons why I am very 
interested in programs that would encourage the non-residential 
fathers of these children to stay involved, to become more 
involved, rather than be distanced, in some cases, by the 
policies that we have in place.
    So I think there are ways of using public housing policies, 
child support policies, to encourage that involvement rather 
than, in some cases, discourage it.
    Senator Hatch. Ms. Brown, when States describe how they 
spend their welfare dollars, a significant percentage of 
dollars is spent on services and activities that are 
characterized as ``other.''
    Can you comment on what these ``other'' activities are and 
what challenges for policymakers are presented by having so 
much of the TANF expenditures unknown? And what suggestions 
would you make for policymakers to achieve greater transparency 
on TANF expenditures?
    Ms. Brown. We are actually doing some work right now to try 
to tease out all of the things that are spent through the TANF 
block grant that are not cash assistance. But we know in that 
``other'' category that a large portion of that is child 
welfare. It goes directly to services for prevention for 
agencies that are trying to serve high-risk children and 
families.
    I am sorry. I missed the second part of your question.
    Senator Hatch. It was: what suggestions would you make for 
policymakers so that we can get greater transparency on TANF 
expenditures?
    Ms. Brown. Well, I think the tricky part of that is, we 
have heard already that there is a risk of expecting too much 
reporting and too much detail, going too far, so that the 
States feel that there is a barrier or an encumbrance.
    But I do think that as long as--right now, 71 percent of 
the resources for the TANF block grant are not spent on cash 
assistance. I think it is really important that we have a 
better understanding of what those resources are spent on, and 
we are hoping that we can contribute to that with this work we 
are doing right now.
    Senator Hatch. That is my point as well. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Senator Bingaman?
    Senator Bingaman. Dr. Haskins, I understand a main point 
that you are making here is that the best thing that we can do 
with this TANF funding is to subsidize earnings. Is that 
accurate?
    Dr. Haskins. That is one thing we should do, but I think 
training also plays a role. Job search has been shown again and 
again to be effective. We should have more effective job search 
programs.
    The distinction between job search, simply looking for a 
job--which usually includes some tutoring in how you conduct 
yourself and how you dress and so forth and having a nice 
resume--and training is, there is a continuum here, and we need 
more training. We need more preparation for some of these 
mothers to do well in the labor force, and the same thing after 
they get in the labor force to advance. That has been a very 
disappointing thing to me, that many of these mothers do not 
advance.
    So TANF should be used for that sort of thing. It is not 
just to subsidize income. The EITC, child tax credit, we have 
lots of subsidies of income.
    Senator Bingaman. Well, I guess what I am trying to 
understand is whether it would make sense, in this 
reauthorization that is contemplated here in the next couple to 
3 months, for Congress and for the Federal Government to 
essentially say, all right, this is a block grant, but you have 
to spend a certain percentage of this block grant--each State 
has to spend a certain percent of it doing a certain set of 
things.
    I guess, Ms. Brown, as I understand your testimony, you are 
saying that 29 percent of the dollars that States receive from 
the Federal Government is actually being spent in cash 
assistance.
    Ms. Brown. That is correct.
    Senator Bingaman. So you have 71 percent that is being 
spent in other things, and you are trying to figure out exactly 
what all those other things are and how much of each.
    But, if there are some things that we think are high-
priority uses and most beneficial uses of this money, should we 
not say to States, 50 percent of your money has to be spent 
either helping people get jobs--job training--or for cash 
assistance for people who are earning in the labor force, or 
some set of things?
    Dr. Haskins, do you have a point of view on that?
    Dr. Haskins. Yes I do. I question putting more requirements 
on the States. We gave them a block grant. The idea was the 
States would be responsible and handle the money well. And now 
there is some indication, well, maybe they did not. Maybe they 
spent the money on child protection. This committee has 
jurisdiction over several open entitlement programs for child 
protection.
    So it makes sense somewhat to put more rules on the States, 
but more rules lead to more paperwork and so forth. I am not 
sure--I think it is more important to get the incentives right.
    Senator Bingaman. I think one of you testified that the 
caseload, the TANF caseload, has decreased in some States 
during the recession.
    Now that, to me, is a sign that this thing is broken. I 
mean, if this is a program that is supposed to be helping these 
folks, you should not have folks dropping out of the program 
when the economy goes in the tank.
    So isn't some change in the program essential as part of a 
rewrite here?
    Dr. Haskins. Yes. Yes. I am not defending the status quo. I 
am just--I am worried about how you do it. Some States feel 
that people ought to work and they ought to look for work 
intensely and, if they do not find work, it is their fault. 
That seems to be the essence of their policy, even during the 
recession. And people do find employment during a recession.
    If we want to have the States spend more TANF dollars 
during the recession on TANF cash assistance, which is the way 
we originally thought of the program--we put a contingency fund 
in the original legislation. It was supposed to give the States 
more cash during the recession so that they would be able to 
pay more benefits. But somehow, in some States, the work 
message is so strong that the States are reluctant to do things 
to attract people back into the rolls. And plus, they say that 
encourages dependency.
    So you have a real philosophical conflict here, and, if you 
tried to do this, I could find 10 Governors to come in here and 
say, ``No, don't do that, it is an outrage.'' That does not 
mean you should not do it, but I am just saying that there is a 
real difference of opinion here about what the real cause is of 
why people do not get TANF benefits.
    But, yes, I think you ought to look at that, and I 
personally would support something that would cause the States 
to be more responsive during a recession, because they were not 
very--many of them were not.
    Senator Bingaman. Dr. Lein, did you have a point of view on 
any of this?
    Dr. Lein. I think, also, we need to look at how TANF 
operates in a period when there simply are not enough jobs. And 
the people who are going to be out there job hunting are going 
to find jobs in the informal economy. They are going to find 
jobs that may not count in TANF regulations, and it may take 
them longer to find jobs.
    Senator Bingaman. A period where there are not enough jobs 
may be the new norm. Certainly, we have had that circumstance 
now for several years since this recession started.
    Dr. Lein. And so we need to take a hard look at what we 
want people to do if they are not finding jobs. And what they 
are doing now, I suspect, is--I do not think we know for sure, 
but I think one option is that they are not joining TANF 
because they know they cannot meet the requirements.
    Senator Bingaman. My time is up.
    Dr. Haskins. Mr. Chairman, could I have 20 seconds to add 
something to this? It is extremely important.
    When this committee and the Congress passed the emergency 
fund during the recession, it gave the States $5 billion in 
TANF funds, and it gave them the option of basically creating 
jobs by subsidizing jobs even in the government and private 
sector, which had never worked before.
    But the States created 260,000 jobs. And so, how did the 
Congress reward them? When the time for the emergency money 
came to an end, poof, it was gone, and the State programs were 
falling apart.
    But that shows you that the States are highly motivated to 
try to do things, including even the very complex issue of 
subsidizing jobs in the private sector--260,000 jobs is one 
great achievement.
    The Chairman. Senator Cornyn?
    Senator Cornyn. Thank you, Mr. Chairman. I appreciate your 
holding this very important hearing.
    Dr. Haskins, I have been following some of your work with 
your colleague Isabel Sawhill at Brookings, and I am intrigued 
by something I want to quote back to you. And that is, you said 
that if families follow three basic rules, that they are 
virtually assured that they will avoid poverty: complete at 
least a high school education, work full time, and wait until 
age 21 and get married before having a baby.
    Based on an analysis of Census data, you conclude that 
people who followed all three of these rules had only a 2-
percent chance of being in poverty and a 72-percent chance of 
joining the middle class. Conversely, these numbers for those 
people who violated all three rules would elevate their chance 
of being poor to 77 percent and reduce their chance of making 
it to the middle class to 4 percent.
    So, if it is that clear that those three things would raise 
the likelihood of success of people leaving poverty and joining 
the middle class, what can the Federal Government do to help?
    Dr. Haskins. Well, first of all, we did something terrific 
in the 1996 welfare reform legislation, because we really 
strongly encouraged work. And I think we have to maintain that 
message, because keep in mind the poverty rate among kids in 
single-parent families--and that is where the highest poverty 
rate in the country is--is still lower now after two recessions 
than it was before welfare reform, and that is primarily 
because those mothers are working. And the work rates are still 
about 20 percent higher than they were before welfare reform. 
So the work message--it was more than just welfare reform that 
did it, but the work message has gotten through. So that is the 
first thing.
    The second thing is, non-marital births are a huge problem 
in the United States, and we are trying, we are doing some 
things, but I think we could do a lot more. I have suggested 
things in my testimony.
    Our teen pregnancy programs, avoiding teen pregnancy, are 
quite good, and we are expanding those. The administration now 
is doing evidence-based funding--it is about $100 million a 
year, and I think that is extremely important.
    The House tried to kill it last year. The Senate saved it. 
The House tried to kill it the year before, and the Senate 
saved it again.
    I think that is an extremely important program, because we 
are still learning about how to reduce teen pregnancy. And 
there are several programs, national campaigns, at least two of 
which have good evidence about the importance of comprehensive 
sex education, especially addressed to males for the use of 
condoms when they are engaging in non-marital sex where they do 
not want to have a baby, and expansion of Medicaid to women who 
are not covered so their birth control is free. Both of those 
have been shown to produce big benefits that outweigh their 
costs.
    So I think that is another thing that the Federal 
Government can do. I would like to see us expand work 
requirements, but this is very sensitive. I am sensitive to the 
point that Senator Bingaman made about work in the United 
States: we have the lowest percentage of people employed that 
we have had in decades, probably, maybe even forever.
    And maybe that is the future. Who knows? We are not 
recovering from this recession very well. But there are still a 
lot of people getting jobs at the bottom. So we should do 
everything we can to encourage employment. I think we should 
look at the food stamp program and at the housing program, 
because they both have weak to nonexistent work requirements, 
and that concerns me. I think we might be able to make some 
progress there.
    Senator Cornyn. When I was Attorney General of Texas, I was 
responsible for child support enforcement under the title 4(d) 
program, which, of course, assigned to the State Attorney 
General the responsibility to enforce the child support 
obligation, establish paternity where necessary.
    But could you speak, Dr. Lein--I know you have had a 
distinguished career at the University of Texas as well.
    Dr. Lein. Absolutely.
    Senator Cornyn. But I would be interested in hearing from 
each of the witnesses or any of the witnesses who care to 
comment about what should the Federal Government continue to do 
when it comes to enforcing the child support obligation and 
assisting the States?
    I will just close, before I ask you to answer, with a quick 
story. I was in El Paso, TX and got out of an airplane, and a 
gentleman approached me and told me, ``You put me in jail when 
you were Attorney General.'' I did not really know what to 
expect next. [Laughter.]
    But actually what happened was, he told me that--he said 
when we sued him to force him to pay his child support, his 
wife had previously denied him access to his child, and the 
judge, at the same time he ordered him to pay child support, 
ordered his ex-wife to allow him to see the child.
    And so this child was a 2-time loser: he did not get the 
financial support and did not get the love and support of both 
parents.
    Ironically, this story ended on a happy note. He told me 
once the judge ordered that, he said, ``You know, we are back 
together again now.'' It had a happy ending.
    There are not enough happy endings in this scenario. But 
could you comment on--as we approach that function, the child 
support enforcement function--what do we need to do 
differently? What do we need to continue to do that we are 
doing right? If you would address that, please.
    Dr. Lein. Sure. And Texas has been interesting, because 
they have done some very interesting experiments on encouraging 
payment of child support. And those experiments include things 
like punishments on the one side for not paying, but also a lot 
of assistance, in some of the experiments, for finding the job, 
for getting placed again in your community and in jobs, 
particularly if you have been jailed or imprisoned in the 
interim, and I think the child support payments need both of 
those.
    You cannot just punish non-paying fathers if they cannot 
get jobs and they cannot earn, but you also do not want them to 
earn without giving them a sense that it is really required 
that they pay over to their children. So I think setting up 
those kinds of programs can do both.
    I think, also, other than having a threshold, we should 
have some of the money that the father pays go over to women 
who are on welfare--even if they are still drawing welfare--so 
that almost immediately that family system sees the benefit of 
fathers paying into their system, rather than setting up a 
system where both parties to it might feel they are better off 
if the father pays under the table, which takes it out of the 
State oversight.
    The Chairman. Thank you very much, Senator.
    Senator Nelson, you are next.
    Senator Nelson. I am going to pass.
    The Chairman. All right.
    Senator Cardin?
    Senator Cardin. Thank you, Mr. Chairman. I very much 
appreciate this hearing.
    Dr. Haskins, it is nice to be with you again. I served on 
the Ways and Means Committee and went up against Dr. Haskins 16 
years ago and lost most of my arguments and provisions, but 
joined the majority in supporting the TANF legislation 16 years 
ago. And I think it was the right decision to change the 
program and make it focused on getting people out of poverty 
and getting them employed. But I do think we have to 
acknowledge some concerns.
    Senator Bingaman already mentioned some of those issues. In 
a recession, we would expect States to be able to respond by 
putting more cash out there when the job market is more 
difficult. But we know that during this recession, States did 
not have that option in many cases. They just did not have the 
fiscal capacity to do what we would have liked them to do. They 
would have had to cut other programs, and they were not 
prepared to do that. So I do think it does raise an issue as to 
how TANF works during recessions.
    Secondly, we can all point with pride to the number of 
people who are off of cash assistance. But I think we also have 
to acknowledge that during the same period of time, using the 
mid-1990s as our base, the number of children in poverty has 
actually increased in America. It is over a million more 
children in poverty. And our objective was to get people out of 
poverty. So I think we need to figure out more effective ways 
in order to do this.
    I also want to talk a little bit about the issue, Dr. 
Haskins, you have raised on the requirements on our States. 
This was supposed to be a partnership with the States, giving 
them the ability to innovate and move forward. And I think, in 
many cases, we have not let that happen.
    There was testimony in the Ways and Means Committee 
recently by Shauna King-Simms from Kentucky, who talked about 
how the 30-percent participation rate for those in vocational 
education has restricted that State in what it wants to do to 
get people employed. We all know that education is critically 
important. The 1-year limitation is a problem--there are many 
programs that are 2 years.
    I just visited some in the community colleges in Maryland 
who are in 2-year vocational education programs, and yet a 
person who is participating in the program would be prevented 
from going beyond 1 year during their lifetime. So I think 
there are some restrictions.
    And I would also point out one of the debates we had back 
16 years ago was whether the test should be how many people go 
off of cash assistance or how many people end up among the 
employed, and we opted for getting off of cash assistance as 
the test rather than using those who are employed.
    I guess my question to the panel is--I think the States 
have demonstrated the capacity to innovate and to use this 
program in a most flexible way to meet the needs of the people 
in their own State. But they are asking for more flexibility. 
Why shouldn't we give it to them?
    In a way, I like the Republican view originally of giving 
flexibility to States. Why shouldn't we give them the ability 
to come forward with a demonstration program that would allow 
the test to be getting people employed rather than off of cash 
assistance, or why can't they have the ability to go beyond 30 
percent on participation, where they have demonstrated that 
they have been able to achieve the other goals that we have set 
out for them in welfare reform?
    So, as we consider the reauthorization of TANF, should we 
not be considering ways to give the States additional 
flexibility, allowing them--holding them accountable to a final 
result, but giving them more flexibility in order to achieve 
it?
    Dr. Haskins. Yes, we should. I think we were right in 1996, 
because the States were not focused on work. They made excuses 
about, oh, well, these mothers are not capable of working and 
so forth. So we really changed the whole culture of welfare. 
And I have visited several offices in your State, and you can 
see that they are organized around work. They call themselves 
work offices. The word ``welfare'' has been cast into the 
depths.
    So I think there have been a lot of big important changes. 
And under those circumstances, my own opinion--I am not very 
popular among Republicans for this view, but my own opinion is 
that we should give more flexibility to the States. And I think 
the relentless increase and tightening the screws on 
requirements as, for example, in the DRA, has produced 
unexpected results, and they are not helpful to either the 
mothers or to the States.
    So I think we ought to look at this very carefully. I 
think, for example, in the case that you raise of education--
now, the fact is that a lot of these families, even when they 
try to go to school, they drop out quickly. A lot of them, it 
is the furthest thing from their mind.
    But still there are families on welfare that could profit 
from education, especially a tailored, short program that was 6 
months and led to a welding certificate or something. Those 
kind of things, I think the States should not be limited in 
doing. We need to look at that very carefully and I think make 
changes, I agree.
    Senator Cardin. Do other panelists want to respond?
    Ms. Brown. I think there are two things that you mentioned 
that are important. One is the idea of encouraging the research 
and trying to find innovations and supporting States in those 
efforts.
    The second piece is the incentives. As long as TANF is a 
block grant and the States do have those flexibilities, the 
four goals are very, very broad, and thinking about whether 
those are still the four goals that you would want the program 
to address is important, because a lot of the resources that 
are going away from cash assistance and jobs are because of 
those broad goals.
    And the final point is incentives. I think I agree with Dr. 
Haskins that the way that State performance is being measured 
now is not really helpful, and there are probably a number of 
different ways that you could consider new incentives, 
including outcomes that you mentioned.
    Senator Cardin. My time has expired, so I am at the mercy 
of the chair.
    The Chairman. There are other Senators who do wish to 
speak, so I will go down the list here. Thank you very much.
    Senator Nelson?
    Senator Nelson. Dr. Haskins, you remember that the change 
in the law was to end welfare as we know it. And looking at 
your poverty rates, figure number one, after the enactment of 
that law, the poverty for children went down; for seniors, it 
basically stayed about the same; for all people, it went down a 
little. But all of those trend lines have gone back up 
recently.
    What happened?
    Dr. Haskins. We have a lower percentage of non-marital 
birth mothers and single mothers working. Their work rates have 
declined less than most other demographic groups, but they work 
less. And now we have created a system where, if you do not 
work, you cannot get out of poverty.
    So that is exactly what happened. But I would point out to 
you that the work rates among low-income mothers are still 
higher than they were before welfare reform, and the child 
poverty rates among kids in never-married families and all 
single-parent families are lower than they were before welfare 
reform.
    So the strategy is still working somewhat. When the economy 
gets going, I think it is plausible to assume that those 
mothers will go back to work, especially if the States have the 
kind of programs that Senator Cardin described.
    So I am somewhat optimistic that, as the economy recovers, 
poverty will drop again among this group. But keep in mind, 
poverty among single-mother families and among black children--
with 
single-parent families at such a high proportion--reached its 
lowest level ever, and it is still much lower than it was 
before welfare reform, and it is because of work.
    Senator Nelson. Wasn't the earned income tax credit 
supposed to be part of the relief for this? And why, with the 
institution of that, would you still have----
    Dr. Haskins. If mothers work close to full-time, even at, 
say, 8 or 9 bucks an hour, between the earned income tax 
credit, the child tax credit, food stamps, they will be above 
poverty if you include all those benefits.
    I gave an example of this in my testimony. I think it is a 
triumph for American social policy that the combination of 
work, which Republicans really preferred in welfare reform, and 
benefits that are contingent on work, those two things, are a 
highly bipartisan solution. That is what we have created, and 
as long as we can help mothers work, then the system will work.
    Let me point out one more thing. The EITC has a vicious 
little characteristic. If a mother loses a job, she not only 
loses her earnings, she loses her EITC. So it is a double-
whammy, and that is--I do not know what to do about that, but 
that is a very serious problem.
    The EITC is a great thing. It is one of the best programs 
we have. But it is really a problem when someone loses a job or 
loses hours.
    Senator Nelson. That is a very good point, Mr. Chairman and 
Senator Hatch, a very good point.
    Dr. Lein?
    Dr. Lein. And I just wanted to point out, following up on 
that, that what we are seeing is an increase in the variability 
of jobs, so that people have jobs with variable hours. There is 
a great deal of under-employment, as well as unemployment, so 
that people are under-employed, and, as their wages sink, other 
kinds of benefits sink as well.
    Senator Nelson. But at least, even if they are under-
employed, as Dr. Haskins points out, they have a chance to get 
the earned income tax credit.
    Dr. Lein. They have a chance to get the earned income tax 
credit, but the sum will start dropping them into poverty 
again.
    Senator Nelson. Final point. Let me ask you about the much-
maligned stimulus bill. One of the biggest parts of that, other 
than tax cuts, by the way, which often is overlooked, but one 
of the big parts of the stimulus bill was to help out the 
States with Medicaid and also education.
    And I know in my State, a huge amount of money went back to 
the States for 2 years to help them with Medicaid. But after 2 
years, it cut off. And then the States did not pick up the 
responsibility after that. And so you have this huge falling 
off the cliff after 2 years.
    What do you think about all that, and how does that tie 
into this?
    Dr. Lein. I think one of the problems that that causes is 
that, for low-income families, I think medical debt is becoming 
a part of their financial life, and families who have tried to 
orchestrate that, if they do not have access to Medicaid or to 
the child health insurance program, end up in debt and often in 
surprising debt in very large amounts.
    And I think one of the concerns we have, as medical 
insurance does not become more widespread, is that more 
families are going to be hampered by the degree to which they 
are carrying medical debt.
    Senator Nelson. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Senator Carper?
    Senator Carper. Thanks, Mr. Chairman.
    I want to welcome our witnesses. It is very nice to see 
you, Dr. Haskins. And when I was privileged to be Governor of 
Delaware and in the National Governors Association, on this 
issue he was one of the top advisors for us in the House and, 
frankly, for Governors as well, and I appreciate very much the 
great work that you have done, and continue to do.
    And I welcome our other two witnesses as well.
    I still have a chance to go into schools all over my State, 
and I am sure my colleagues visit schools throughout their 
States. I like to do assemblies in high schools, and sometimes 
when I do--and in middle schools, as well--I will mention this 
to them: if a young woman, age 16, becomes pregnant, drops out 
of school, does not marry the father of her child, there is an 
80-percent--eight-zero percent--likelihood that they will live 
in poverty.
    If that same 16-year-old girl does not become pregnant, 
graduates from high school, waits to at least 20 to have a 
child, and ends up marrying the father of her child, there is 
an 8-percent likelihood that they will live in poverty. Those 
were numbers from probably a decade or so ago, but my guess is 
they are probably not far off.
    I remember holding and hosting, as Governor, a 1-day summit 
in Dover, DE--we had it at the Sheraton Hotel--and we invited 
every high school in Delaware to send two kids, a boy and girl, 
and to help us think out loud about teen pregnancy. And we 
spent the better part of the day together.
    The young people did not know it, but they actually helped 
me draft what we wanted to do on welfare reform in our State. 
And they basically said, it starts with a State-wide campaign 
on teenage pregnancy and the change, the incentives, and what 
we really think about teenage pregnancy.
    They also said it was important that we not only help 
people find a job, but that we help make sure they do not 
become parents before they are ready to become parents. We all 
believe we should make sure they have some of the skills that 
they need that will help them find a job, and that we should 
provide resources to reduce the incidence of teenage pregnancy, 
that we ensure people have the skills that they need to find a 
job for which there is an opening; better ensure that they have 
the ability to find that job, get to that job, make sure that 
they have child care for their kids if they need that, to make 
sure that they have health care so they do not just lose their 
time out on Medicaid.
    But the idea, again, as you all know, sort of the grand 
compromise is to make sure that people are better off going to 
work than they are just staying on welfare. That is pretty 
smart, and those kids were pretty smart in helping me and 
others to figure that out in my State and probably in other 
States as well.
    I would like to know what has been going on with teen 
pregnancy rates in this country over the last decade or so. And 
I understand that actually there is some encouraging news out 
there. And I would like to know what is going on, if you know, 
and to what extent the ways we have moved foward from welfare 
to work, trying to make sure that people are better off when 
they are working, how that might have affected teen pregnancy 
rates.
    Do you want to start, Dr. Haskins?
    Dr. Haskins. Yes. Thank you. You may recall that we had 
something like 15 provisions in the 1996 welfare reform bill 
that were intended to have an impact on family structure--teen 
pregnancy, non-marital birth rates. We set aside I think it was 
$25 million for cash awards to the States that could reduce 
their non-marital birth rates. And I do not think any of that 
had much impact.
    However, we have had success in teen pregnancy. Teen 
pregnancy rates have fallen every year since 1991, except for 2 
or maybe 3 years. Those are recent years, and they have picked 
back up again.
    The Congress has done a lot, in cooperation with the 
administration, to try new programs that are based on hard 
evidence that they will work, and we are spending about $100 
million on those evidence-based programs.
    So I think we are continuing to do what is required. Here 
is the big problem, I think, and it is hard to figure out 
exactly how to address it. And that is, if you look at the non-
marital birth rates for the young ladies just above the teen 
years, so in their early 20s, those rates, as the teen poverty 
rate goes down, those rates go up. It is almost as if young 
ladies can only avoid pregnancy for so long, and I think there 
is some truth in that, having interviewed a number of these 
mothers.
    It is not necessarily--in fact, in most cases, it is not a 
mistake. They want a baby. Their prospects for marriage are not 
great. Their choices among men are problematic, because many of 
them do not work. And so they decide, ``Well, I have a baby 
with this guy, but I sure wouldn't marry him,'' and they have a 
baby with a guy.
    So we need to focus on 20-year-olds, too. It is not just 
teenagers. And there, I think, Medicaid can play an important 
role by covering family planning services, and the mothers are 
anxious to do that. They do it if it is offered.
    It is not going to solve a huge part of the problem, but it 
is one solution. So that is something to really focus on, non-
marital birth rates among 20-somethings.
    Senator Carper. Good. Mr. Chairman, could I ask either of 
the other witnesses just to briefly comment on the same issue, 
please? Thank you.
    Dr. Lein. And I think it is also worthwhile to think about 
focusing on men and on young men, the potential fathers of 
these children, and what we are doing about their job 
prospects, what kinds of services they have available to them, 
and what kinds of health care and advice they have access to, 
because they are undoubtedly less served than the women in the 
same age bracket.
    Senator Carper. Ms. Brown?
    Ms. Brown. I was just going to mention one other point, 
which is that we are still learning and need to learn a lot 
more about the concept of marriage promotion. There have been 
some recent studies that have just been released that are not 
very encouraging.
    And so, if we are talking about promoting marriage, I think 
we still have a long ways to go in figuring that out----
    Senator Carper. All right. Thanks.
    Ms. Brown [continuing]. For low-income families.
    Senator Carper. Thank you.
    Mr. Chairman, thanks so much for holding this hearing and 
giving us a chance to have this discussion.
    The Chairman. Thank you, Senator.
    Senator Wyden?
    Senator Wyden. Thank you, Mr. Chairman. And, Mr. Chairman, 
I think the focus that you and the staff have been putting on 
poverty and particularly the opportunities to address these 
anti-
poverty issues in a fresh and creative way makes a lot of 
sense, and I very much appreciate it.
    Dr. Haskins, you have been doing yeoman work in this field 
for a long time, and I am really looking forward to being----
    Dr. Haskins. But I am still so young.
    Senator Wyden. You are. [Laughter.]
    We will put you in the youth caucus as well. And I am 
looking forward to pursuing economic mobility issues with you 
as well in the days ahead, and I will have a question on that 
in a moment.
    Now, I want to take what we have done in Oregon and get 
your sense sort of on one of the opportunities for reform. My 
home State has focused primarily on education and trying to 
find ways to keep families together. Those are our special kind 
of priorities. Now, this approach coincided with the recession, 
which hit my State particularly hard.
    Between December 2007 and December of 2009, nationwide 
caseloads went up 12 percent, but Oregon's went up 40 percent. 
Two-parent caseloads alone went up over 214 percent. So now we 
are looking at the prospect of $27.5 million in Federal fines 
for not meeting the work participation rates.
    So the question I have is about your sense of a policy 
change. In an economy with fewer jobs than job-seekers, would 
it not make sense to give the States more credit for moving a 
public assistance recipient into a job rather than simply 
moving them off the rolls, because it seems to me, if we take 
that as kind of a fundamental proposition, we could look at a 
variety of new approaches, like perhaps giving the States a 
waiver to start trying some demonstration projects in this 
area?
    What is your thinking on that point?
    Dr. Haskins. Yes. I think it is a good idea. It is a 
reasonable thing to do. I am worried about the way you actually 
measure it. It would give the States something new to report. 
What it is compared to is an issue.
    So there are a lot of issues about how to measure it, but I 
think basically it is a sound idea, as long as we did not lose 
the focus on work. A lot of people get jobs during a recession.
    What you say about the number of people looking for a job 
and the ratio to number of jobs available was worse in this 
recession than any time since the Depression. So that is a 
consideration in how you are to find a job.
    But people still find jobs even during a recession. So, 
again, it is like the original TANF program, the balance 
between a reasonable policy and a policy that does put pressure 
on people to work. As long as that is maintained, then I think 
your idea is a good one.
    Senator Wyden. Well, it is that balance that I am 
interested in, and I think Senator Cardin has made a number of 
good points on this. And that is why the approach of trying 
particularly to let States that have been creative--and as you 
know, Oregon has been consistently in terms of human 
resources--get a waiver to try some of these approaches, I 
think would be attractive.
    Let me ask you a little bit about the economic mobility 
issues. As you know, I am going to be one of the co-chairs of 
the caucus which is going to kick off here very shortly in 
partnership with Pew.
    Now, you have touched on a number of policy 
recommendations, but why don't you, if you would not mind, just 
give us a couple of recommendations with respect to the 
economic mobility work that you have been pursuing, because I 
think this is hugely important. We are seeing, of course, these 
major regional differences, which I gather our colleagues have 
touched on before I came in, as well.
    Why don't you, just for purposes of the rest of my time, 
give us a sense of a couple of recommendations that you think 
are particularly important on the mobility issue?
    Dr. Haskins. Let me mention two. The first one is 
everything we have been talking about in this hearing room 
today, because the way to increase mobility, one big way to 
increase it, is to start at the bottom. Those are the people 
who are most disadvantaged.
    If you look at the data on earnings and almost any measure 
of income, the bottom is what has really been stagnant. In 
fact, the bottom would have been even worse than stagnant, 
would have declined, if it had not been for Federal benefits.
    So the Federal transfer of payments for wealthy or more 
advantaged people to low-income people has actually meant that, 
even over the period of the last 2 or 3 decades, the bottom has 
actually moved up, unlike what you are likely to read in the 
New York Times. And a big part of that is that so many people 
at the bottom work, especially single moms.
    So the purpose of TANF is verified by the importance to 
increasing mobility in the United States. Start at the bottom, 
help them first.
    The second thing is that I think we need to figure out a 
much better way to get kids into junior colleges and colleges. 
We are working on that. And I would not fault social policy at 
either the Federal or State level, but we need an even more 
intense and a smarter focus on it.
    The reason is that low-income kids are still at a 
disadvantage. They are less likely to enroll either in 2- or 4-
year colleges, and they are more likely to drop out despite the 
fact that they are less likely to enroll.
    So the difference in achieving a 2-year or 4-year degree 
between kids from the bottom and kids from the top is enormous, 
and that is something we ought to focus on, especially because 
we have very good data from universities, long-term data, where 
we can compare the income of kids to their own parents. That is 
how long these kids have been followed, over 40 years.
    And it shows that, if a low-income kid from the bottom 20 
percent, roughly below $20,000, if they get a college degree, 
their chances of staying in the bottom are cut by more than 
half, and their chance of making it to the top is increased by 
a factor of four.
    Name any other intervention that would increase something 
by a factor of four. So this is an extremely important problem. 
We just simply have to figure out a better way to get kids in 
junior college and college, especially low-income kids. And a 
big part of it is making the high schools better. I know that 
is hard, but that is a big part of it.
    Senator Wyden. Well said. My time has expired, Mr. 
Chairman.
    The Chairman. Thank you, Senator.
    Senator Thune?
    Senator Thune. Thank you, Mr. Chairman. And thanks for 
holding the hearing today on an important subject. Thank you 
all for taking your time to share your insights with us.
    Let me ask this of Dr. Lein and then maybe Ms. Brown as 
well. Why do you think that the utilization of the TANF program 
has decreased?
    Dr. Lein. I think there are several contributing factors to 
it. I think it is hard to use, and it is particularly hard to 
use if you really do not think you are going to get a job and 
you are not going to be able to meet those work requirements. 
So I think some people just opt out for that reason.
    I think a lot of families are doing things, and feel they 
have to do things in that network sense, that make TANF harder 
to do. They have other people living in their household. They 
are drawing on their networks in ways. They are engaged in the 
informal labor market, trying to make ends meet, and it does 
not mesh well with the TANF program.
    And I think, unless they are in a program where they see 
some movement up through education and training, it also 
appears that they are not going to be helped to be placed in 
jobs that would actually dramatically change their situation. 
So I think there is that part of it.
    The second thing that families tell us is that the TANF 
payments are actually only part of the picture, and as long as 
they were using it as an avenue into Medicaid, into other kinds 
of supports, it was more valuable to them than just the cash 
payment itself, and those have become somewhat separated.
    Senator Thune. Same answer, Ms. Brown?
    Ms. Brown. Pretty much. I would just like to add that, at 
the risk of making this more complicated, in addition to the 
TANF program, there are other types of investments that States 
are making, and sometimes States will take families whom they 
think are not likely to succeed in the work activity program 
and move them into a separate program. And so they are not 
counted in the numbers that you would see in TANF.
    Now, in very tight economic times, that becomes more and 
more difficult for the States.
    Senator Thune. And what reforms, if any, do you think 
Congress ought to make to TANF in order to ensure that States 
are more proactive in assisting families as they prepare for 
and find jobs? Are there things that we ought to be doing and 
we are not doing?
    Ms. Brown. Well, I think we ought to go back to the point 
that sounds very simplistic, but is really complicated of 
course, and that is the idea to start first very clearly with 
the goals of the program, making sure those are still the goals 
that you want them to be, and then look at the incentives and 
the way that the success of the States is measured.
    Having one measure, and one measure that does not tell you 
very much about whether the States are actually achieving what 
you hoped they would, is not going to encourage States to make 
changes.
    If you were to think about some different measure or basket 
of measures that were more focused on outcomes or that gave 
States more flexibility for families that had larger problems 
or more significant problems, those are the kinds of things 
that we have seen make a difference when you are using a block 
grant, where there is a lot of flexibility but you still want 
to hold a State accountable.
    Senator Thune. Yes.
    Dr. Lein. I think there are three issues, following up on 
what Ron said: I think making more allowance for opportunities 
for education and training that may extend beyond some of the 
limits in many States; I think looking at coordinated programs 
that would increase father involvement with families; and 
third, looking at ways in which to expand people's ability to 
get child care during the time they are trying to enter the 
labor force and to keep that child care for some time 
afterwards.
    Senator Thune. Good. Let me ask just quickly one other 
question, and that has to do with a GAO report out here 
recently that suggested that there is about somewhere in the 
neighborhood of $4 billion or north of there in refundable tax 
credits, payments made to people who are claiming children who 
do not live in this country and are here illegally.
    And there is some legislation, which I am cosponsoring now, 
that would require greater documentation to prove that you are 
here legally in order to benefit from that program. Are those 
the types of reforms that you would support, that you think 
make sense? Obviously, this is something where you have people 
who are not here legally benefitting from a program at great 
cost for the taxpayers.
    Does anybody want to take a shot at that?
    Dr. Haskins. Yes. I would support something like that. The 
EITC, despite being a great program, as we have discussed 
several times during this hearing already, has a very high--
whatever you want to call it--error rate. Some of it is because 
of, I think, legitimate mistakes, but this case where people 
are undocumented and claiming EITC, I think that it is illegal 
under the current law, and we ought to have a way to detect it.
    The problem with the solutions for EITC for this problem 
and other problems is that we spend billions in error on the 
EITC. The problem is trying to figure out a way to get enough 
information about each individual case so you can make a 
judgment about whether it is legal that they are claiming a 
benefit.
    It is a very expensive, hard thing to do. I once had, I 
think, a 2-hour meeting with IRS specifically on this issue 
about what we could do, and eventually virtually nothing was 
done. We discussed all kinds of ideas, but they were all very--
they would have greatly increased the workload of the IRS.
    Senator Thune. Thank you, Mr. Chairman. Thank you all.
    The Chairman. Thank you, Senator.
    I thank you, all of you. This was very provocative and very 
informative. The burden is on us now to make sure the next 
steps are constructive and positive. But this has been very, 
very helpful. I have learned a lot, I know, from this hearing. 
Thank you very, very much.
    This will help as we move toward reauthorization of TANF 
and ancillary measures. Thank you.
    The hearing is adjourned.
    [Whereupon, at 11:30 a.m., the hearing was concluded.]
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