    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

                           WAIVING WORK REQUIREMENTS
                              IN THE TANF PROGRAM

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

                                    HEARING

                                   before the

                        SUBCOMMITTEE ON HUMAN RESOURCES

                                     of the

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

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               FEBRUARY 28, 2013

                                   __________

                              Serial No. 113-HR02

                                   __________

             Printed for the use of the Committee on Ways and Means

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                          COMMITTEE ON WAYS AND MEANS

                         DAVE CAMP, Michigan, Chairman

    SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
    KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
    PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
    DEVIN NUNES, California              JOHN LEWIS, Georgia
    PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
    DAVID G. REICHERT, Washington        XAVIER BECERRA, California
    CHARLES W. BOUSTANY, JR., Louisiana  LLOYD DOGGETT, Texas
    PETER J. ROSKAM, Illinois            MIKE THOMPSON, California
    JIM GERLACH, Pennsylvania            JOHN B. LARSON, Connecticut
    TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
    VERN BUCHANAN, Florida               RON KIND, Wisconsin
    ADRIAN SMITH, Nebraska               BILL PASCRELL, JR., New Jersey
    AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
    LYNN JENKINS, Kansas                 ALLYSON SCHWARTZ, Pennsylvania
    ERIK PAULSEN, Minnesota              DANNY DAVIS, Illinois
    KENNY MARCHANT, Texas                LINDA SANCHEZ, California
    DIANE BLACK, Tennessee
    TOM REED, New York
    TODD YOUNG, Indiana
    MIKE KELLY, Pennsylvania
    TIM GRIFFIN, Arkansas
    JIM RENACCI, Ohio

            Jennifer M. Safavian, Staff Director and General Counsel

                      Janice Mays, Minority Chief Counsel

                                     ______

                        SUBCOMMITTEE ON HUMAN RESOURCES

                    DAVID G. REICHERT, Washington, Chairman

    TODD YOUNG, Indiana                  LLOYD DOGGETT, Texas
    MIKE KELLY, Pennsylvania             JOHN LEWIS, Georgia
    TIM GRIFFIN, Arkansas                JOSEPH CROWLEY, New York
    JIM RENACCI, Ohio                    DANNY DAVIS, Illinois
    TOM REED, New York
    CHARLES W. BOUSTANY, JR., Louisiana

                                C O N T E N T S

                                   __________

                                                                       Page

    Advisory of February 28, 2013 announcing the hearing.............     2

                                   WITNESSES

    Panel One

    The Honorable Orrin G. Hatch, a U.S. Senator from the State of
      Utah, and Ranking Member, Senate Finance Committee.............     6

    Panel Two

    Kay E. Brown, Director, Education, Workforce, and Income
      Security, U.S. Government Accountability Office................    13
    Jason A. Turner, Executive Director, Secretary's Innovation Group    25
    Elizabeth Lower-Basch, Policy Coordinator and Senior Policy
      Analyst, Center for Law and Social Policy......................    37
    Douglas J. Besharov, Normand and Florence Brody Professor, School
      of Public Policy, University of Maryland, and Senior Fellow,
      The Atlantic Council...........................................    49

                           SUBMISSIONS FOR THE RECORD

    All Families Deserve a Chance Coalition..........................    84
    Goodwill Industries International................................    86
    9to5.............................................................    91
    Center for Fiscal Equity.........................................    92
    Richard Franke...................................................    96
    National Alliance to End Homelessness and The Arc................    97
    Legal Momentum...................................................   103
    Marylhurst University............................................   107

                           WAIVING WORK REQUIREMENTS
                              IN THE TANF PROGRAM

                                  ----------

                          THURSDAY, FEBRUARY 28, 2013

                 U.S. House of Representatives,
                           Committee on Ways and Means,
                               Subcommittee on Human Resources,
                                                        Washington, DC.

        The Subcommittee met, pursuant to call, at 9:00 a.m., in
    Room 1100, Longworth House Office Building, Hon. Dave Reichert
    [Chairman of the Subcommittee] presiding.

        [The advisory announcing the hearing follows:]

    ADVISORY

    FROM THE
    COMMITTEE
     ON WAYS
    AND
    MEANS

                        SUBCOMMITTEE ON HUMAN RESOURCES

                                                    CONTACT: (202) 225-3625
    FOR IMMEDIATE RELEASE
    Thursday, February 21, 2013
    No. HR-02

                     Chairman Reichert Announces Hearing on

                           Waiving Work Requirements

                              in the TANF Program

        Congressman Dave Reichert (R-WA), 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 proposed waiver of
    work requirements in the Temporary Assistance for Needy Families (TANF)
    program. The hearing will take place at 9:00 a.m. on Thursday, February
    28, 2013, in Room 1100 of the Longworth House Office Building.

        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 welfare reform and individuals who
    will testify on the importance of work requirements in TANF and other
    social programs. 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:

        Work requirements were a central feature of the landmark bipartisan
    1996 welfare reform law. The Temporary Assistance for Needy Families
    (TANF) program, created as a part of welfare reform, was designed to
    end the dependence of needy families on government benefits by
    promoting work, marriage, and personal responsibility. As a result of
    these reforms, States shifted from primarily providing monthly checks
    to recipients to instead providing benefits and services to help low-
    income parents get jobs and become self-sufficient. After the 1996
    reforms, the Nation saw increased work and earnings for single mothers,
    a decrease in poverty among female-headed families with children, and
    record declines in welfare dependence.

        Since 1996, States have been required to meet statutory work
    requirements or face rising financial penalties. For example, States
    currently are generally expected to engage at least 50 percent of
    adults collecting TANF assistance checks in work or specified work-
    related activities. Certain credits and exemptions apply toward this 50
    percent requirement, such as the credit for recent caseload declines
    and exemptions for disabled adults. Additionally, individuals counted
    as engaged in work must participate for a minimum number of hours in
    work or related activities each week.

        On July 12, 2012, the Department of Health and Human Services (HHS)
    issued an Information Memorandum in which they announced that the
    Secretary would begin allowing States to apply for a waiver of the TANF
    work requirements as part of a demonstration project related to the
    employment goals of the TANF program. No such waivers had previously
    been granted since the TANF program was created in 1996, nor had the
    Obama Administration indicated it was contemplating such a change. On
    September 20, 2012, the House of Representatives approved H.J. Res.
    118, a resolution disapproving of the HHS waiver memorandum by a 250 to
    164 vote.

        The TANF program is currently authorized through March 27, 2013.

        In announcing the hearing, Chairman Reichert stated, ``Americans
    consistently believe welfare should primarily serve as a bridge to self
    sufficiency, empowering able-bodied recipients with the tools to secure
    a job, lift oneself out of poverty, and provide for one's family. To
    meet these goals, work requirements have been the cornerstone of
    empowering welfare recipients within the TANF program since 1996--
    successfully increasing earnings for single mothers, decreasing
    poverty, and setting record declines in government dependence. Now the
    Administration claims they can ignore the law and waive these work
    requirements. Congress was clear that it did not intend for HHS to have
    the authority to waive these work requirements, and no prior Secretary
    has claimed to have it. It is critical for us to review the damaging
    effects of waiving TANF work requirements, which could result in less
    work and earnings, and more poverty and government dependence.''

    FOCUS OF THE HEARING:

        The hearing will review HHS' proposed waivers of TANF work
    requirements.

    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, https://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, March 14, 2013. 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 TDD/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
    online at http://www.waysandmeans.house.gov/.

        Chairman REICHERT. Good morning. We will call the
    Subcommittee to order. Today's hearing is on the Obama
    Administration's July 2012 proposal to allow States to waive
    work and activity requirements for welfare recipients, often
    simply called welfare's work requirements. These work
    requirements originated in 1996 in the Welfare Reform Law,
    which passed on a bipartisan basis after literally years of
    debate.
        President Clinton campaigned in 1992 on a pledge to end
    welfare as we know it, and Republicans in Congress took that
    seriously. The landmark 1996 reforms expected welfare
    recipients to work or get education and training. The law also
    capped funding while providing States new flexibility, and it
    included time limits on benefits so welfare was no longer a way
    of life. The years following reform witnessed some of the
    greatest progress against poverty and dependence in our
    Nation's history. After reform, we saw sharp increases in work
    and earnings by single mothers, a 30-percent drop in poverty
    among female-headed families with children and record declines
    in welfare dependence with the TANF roles remaining 57 percent
    below pre-reform levels, even after the 2007 recession.
        The idea that welfare recipients should work for benefits
    remains extraordinarily popular: Eighty-three percent of
    Americans support requiring welfare recipients to work for
    their benefits. And that is why so many Americans were shocked
    last summer when the Obama Administration suggested States
    could apply to waive these work requirements for the first
    time. Current law, congressional intent, historical precedent,
    and expert reviews all confirmed HHS does not have the
    authority to do that. In November 1996, Ways and Means summary
    of the new reforms said it best: Waivers granted after the date
    of enactment may not override provisions of the TANF law that
    concern mandatory work requirements.
        The reason why Congress said work requirements couldn't be
    waived is simple: It wanted strong work requirements. And
    regardless of what the Administration suggests, simple logic
    confirms, States don't need waivers to strengthen work
    requirements; they only need them to weaken work requirements.
    The House acted in September to repeal the Administration's
    waiver policy. And, unfortunately, the Senate didn't follow
    suit. Today's hearing allows us to review this issue as we
    consider the next extension of TANF required before the end of
    March. I believe we should make clear that Congress meant what
    it said about welfare work requirements. What works is work and
    aggressively preparing for work. And the Administration can't
    unilaterally waive these critical features of our welfare
    reform. If anything, as we will hear from several witnesses, we
    should be exploring how to apply these work requirements to
    other programs so States help more welfare recipients work or
    prepare for work. That is the best and the only real path out
    of poverty.
        Without objection, each Member will have the opportunity to
    submit a written statement and have it included in the record
    at this point.
        Mr. Doggett, I would recognize you for 5 minutes for your
    opening statement.
        Mr. DOGGETT. Thank you very much, Mr. Chairman.
        I believe in the value of work. I voted for the 1996
    welfare law because I supported moving people from welfare to
    work. I don't believe, though there have been some spotty
    successes, that that law has begun to fulfill its promise.
        And I think that the responsibility for those failures is
    shared by many: States who did not do their part; an
    Administration that has not come forward with its own plan; and
    Republicans here in Congress who have continued to build on
    old, flawed stereotypes. As this TANF reauthorization has been
    considered, we have moved on a stop-start basis with a number
    of temporary extensions, instead of dealing with the root
    causes of why we don't have more people moving into the
    workforce. We have done--we have dealt with such tangential
    issues as whether people were cashing their checks at a strip
    club, a liquor store, or a casino; not one of the core issues.
    I certainly didn't object to restricting checks from being
    cashed there. But it hardly addressed the core concerns of how
    we provide temporary assistance to those who are poor and how
    we use those resources to get them into jobs.
        Now, with yet another start-stop, we face a deadline at the
    end of this month without any real and basic reforms. The only
    focus has been on attempting to limit the Administration in
    giving States added flexibility. In my opinion, in some areas,
    they have too much flexibility already and have basically used
    TANF as a slush fund to fund some of the social services that
    they should have been providing themselves and were, in some
    cases, providing themselves to assist those who were poor to
    move into the workforce and to develop better skills. And
    whether they needed additional flexibility, there is a good
    argument that they should--but what we really should be doing
    is a broad reauthorization of this program, looking at whether
    it fulfills its original purpose and whether we can make it
    work better for the taxpayer and for those that it is designed
    to provide temporary assistance to.
        This temporary assistance program--misnamed, I believe--is
    increasingly irrelevant for most Americans that are struggling
    in poverty. In response to the worst recession in our
    lifetimes, enrollment in TANF grew little across the country.
    In 2010, 2011, only about one in five poor children received
    assistance through this program. That is the lowest level of
    poor children receiving cash assistance since 1964. In my home
    State of Texas, the picture is much more bleak, as it usually
    is, with roughly 1 out of every 20 children receiving any cash
    assistance from TANF.
        I think all of us want to see fewer people receive
    assistance because they found a good job. But there is no
    indication that these folks who are not receiving assistance
    found a good job, and no one should consider it a success when
    fewer and fewer very poor children and families have access to
    a program designed to serve them.
        Instead of focusing on whether a waiver authority is being
    misused or whether people are misusing their check at a liquor
    store, it seems to me the fundamental concern ought to be on
    how we do more to lift people out of poverty and have them
    contribute productively to our society. Part of this strategy
    should include the President's call for an increase in the
    minimum wage. Right now, a family of four with one full-time
    earner working for minimum wage is living in poverty, even
    after counting refundable tax credits. Increasing the minimum
    wage would give a pay raise to 15 million low-income workers,
    and it would increase the value of work for some of those
    leaving welfare. Increasing educational opportunities,
    including for our youngest children, is another strategy. And,
    of course, defending against those who have criticized it so
    regularly, the earned income tax credit is another proven way
    of helping to lift people out of poverty. And it is doing more
    to lift people out of poverty than the TANF program is.
        We also need to consider what changes should be made in
    TANF. I wish that had been the focus of this hearing and the
    focus of more attention from the Administration. We will hear
    from one witness later today outlining what some of those
    changes might be that could strengthen the program and make it
    fulfill its original purpose. Certainly that purpose will not
    be fulfilled if we see even more cuts with sequester beginning
    tomorrow, another area which we need to address the attention
    of the Congress.
        I look forward to hearing the witnesses.
        Chairman REICHERT. The gentleman's time has expired.
        Thank you.
        I want to remind our witnesses to limit their oral
    statements to 5 minutes. However, without objection, all of the
    written testimony will be made a part of the permanent record.
        On our first panel this morning, we will be hearing from
    Senator Orrin Hatch of Utah, who all of us know and all of us
    know has worked hard to lift people out of poverty. Senator
    Hatch is the Ranking Member of the Senate Finance Committee and
    has been very active with Chairman Camp on the issue of TANF
    waivers since the Administration announced its policy last
    July. As his written testimony notes, he has helped draft every
    major piece of legislation relating to welfare in the past two
    decades, including the 1996 Welfare Reform Law, whose work
    requirements are the focus of our discussion today. And during
    that time, he has worked on numerous bipartisan and even
    tripartisan welfare bills. We are honored to have the benefit
    of Senator Hatch's deep experience and expertise on this issue
    and greatly appreciate his willingness to testify.
        And as all of us recognize the busy schedules among Members
    and staff on the Hill, unfortunately Senator Hatch has to leave
    shortly after his testimony. So if there are any questions,
    they can be submitted to the Senator in writing.
        Senator Hatch, good morning. Thank you for being here.

    STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE
         OF UTAH, AND RANKING MEMBER, SENATE FINANCE COMMITTEE

        Senator HATCH. Thank you.
        Good morning, Mr. Chairman and Ranking Member Doggett,
    Members of the very important Subcommittee on Human Resources.
        I want to thank you for convening this hearing and for
    asking me to address all of you this morning on the Obama
    Administration's proposal to waive Federal welfare
    requirements.
        First of all, I want to congratulate you, Chairman
    Reichert, on your new role as Subcommittee Chairman. I have
    been very pleased to work closely with Chairman Camp on this
    important issue, and I look forward to continuing that
    partnership with you and with our friends on the other side.
        Your long and impressive history in law enforcement has
    brought you in direct contact with some of the vulnerable
    populations that programs under your Subcommittee's
    jurisdiction are designed to help.
        Your experience with these families will serve you well in
    your capacity as the new Chairman. While I commend the
    Subcommittee for holding this hearing, I regret that it is
    necessary to have such a hearing in the first place. Authority
    for the Temporary Assistance for Needy Families, or TANF, as we
    call it, and related programs expired at the end of fiscal year
    2010.
        In the years leading up to and following the expiration of
    TANF, the Obama Administration never proposed a 5-year
    reauthorization of these programs. In the 4 years since
    President Obama has been in office, not once did a Member of
    his Administration offer to meet with me to discuss the TANF
    reauthorization.
        Indeed, for years, the Obama Administration showed no
    interest in making improvements to these programs.
        That being the case, I was stunned on July 12, 2012, when,
    with no advance warning, the Administration released so-called
    guidance to States, informing them that the Administration had
    granted itself the authority to essentially, in my opinion, gut
    welfare reform by undermining important Welfare-to-Work
    requirements.
        Mr. Chairman, over the past 20 years, I have helped draft
    every major piece of Senate legislation relating to welfare. I
    was a Member of the Senate Finance Committee during the 1996
    debate and helped managed the Senate floor during the Senate
    consideration of welfare reform. In 2002, I worked with
    Senators Breaux, Snowe, Rockefeller, and Jeffords to put forth
    a series of recommendations known as the Tripartisan Agreement.
    The Tripartisan Agreement formed the basis of the TANF
    reauthorization legislation considered by the Senate Finance
    Committee.
        I also worked closely with then Chairman Grassley to
    develop the bipartisan PRIDE bill. So not only do I have a long
    history of developing welfare policies on a bipartisan basis, I
    have also been intimately involved in all the major
    deliberations on welfare policy.
        That being the case, I can say with confidence that at no
    time in the nearly 20 years of discussions did Members of
    Congress ever contemplate granting the executive branch the
    authority to waive Federal Welfare-to-Work requirements.
        Now, the Obama Administration has stated that they need to
    be able to waive the work requirements in order to ``explore
    new ways to strengthen work requirements.'' The Obama
    Administration has not elaborated on what is contemplated by
    the word ``strengthen.''
        However, we do know that these unknown new ways to strengthe
    n work requirements do not mean limiting what counts as work to
    actual work or job searches. These new ways to strengthen work
    requirements do not mean actually requiring more people to
    work. That is because under current law, there are no
    restrictions on a State's ability to increase or strengthen the
    work requirements. A State does not need a waiver to limit the
    number of activities it considers work. A State does not need a
    waiver to increase the required hours of work for welfare
    recipients. A State does not need a waiver to increase the
    number of able-bodied adults who are working in exchange for
    their welfare check.
        So if strengthening the work requirements does not mean
    limiting what counts as work and it does not mean increasing
    the number of people engaged in work for longer hours, then
    what does it mean?
        For guidance in answering that question, we should consider
    what types of policy changes a State would need a waiver for if
    the Administration had the authority to provide such waivers in
    the first place. A State would need a waiver to increase the
    number of activities that could count as work. For example,
    adding education and substance abuse treatment to the list.
        Mr. Chairman, as you know, there are already 12 different
    definitions of work described in the TANF law, and some States
    have demonstrated considerable creativity under the flexibility
    that currently exists to count things like bedrest and personal
    journaling as work.
        In addition, a State would need a waiver to count toward
    the participation rate, a person performing less than the
    required number of hours of work per week. And a State would
    need a waiver to meet a performance measure other than the
    current requirement that the State engage at least 50 percent
    of able-bodied adults on welfare in work and related
    activities. In short, the approach envisioned by the Obama
    Administration would mean less work for fewer hours and for a
    smaller share of adults on welfare.
        This approach is contrary to a work-first approach that has
    been an integral feature of welfare reform. Over the years,
    research has consistently demonstrated that a work-first
    approach, combining an intense effort to engage clients in
    work-related activities to foster an attachment to the
    workforce, with a blended menu of work supports, such as
    education, and training, has the greatest degree of success in
    getting clients off of welfare.
        The reason I am so vehemently opposed to the
    Administration's scheme to undermine the Welfare-to-Work
    requirements is I believe it will hinder, not help, adults from
    exiting the welfare rolls. Put simply, allowing activities that
    are not work to count as work will not get people into work.
        Mr. Chairman, last year, I sent President Obama a letter
    asking him to withdraw his waiver rule and submit a TANF
    reauthorization to Congress. I pledged to the President I would
    work in good faith with him to craft bipartisan welfare
    legislation that can help fragile families progress toward
    greater self-sufficiency.
        To date, I have not received a response to my letter. The
    President has not withdrawn his welfare waiver rule, nor has he
    submitted a TANF reauthorization to Congress.
        Therefore, in my opinion, Congress must act. Congress must
    stop this executive overreach and prevent this Administration
    from undermining key provisions of welfare reform. I am hopeful
    that this hearing today will be the first step in a process
    that leads the House of Representatives to pass legislation to
    invalidate the Administration's welfare waiver rule. And I hope
    that the Senate will act in a similar fashion.
        I am counting on you. I am counting on a bipartisan effort
    to really keep this work requirement as a substantial and
    effective work requirement. And I will do whatever I can to
    make sure that that occurs.
        And I just want to thank you for holding this hearing. I
    respect each and every one of you. And I know these are tough
    issues. But I feel really deeply about this. And one reason
    TANF worked so well is because of the work requirement, and a
    lot of people found that going to work was a good thing. And
    what we need to do is find better ways of opening up the doors
    so they can work and get jobs they need. Thank you so much. It
    has been a privilege to be with you.
        [The prepared statement of Senator Hatch follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman REICHERT. Thank you, Senator, for your testimony.
        Thank you for helping us understand this issue a little bit
    better. We can tell that you are passionate about this and are
    willing to help us in any way you can. Your presence here today
    is absolutely a sign of that and your testimony, too, and your
    comments after. So we look forward to working with you. Thank
    you so much for being with us today.
        I will repeat to the Members of the panel here that if you
    have any questions for the Senator, you have the opportunity to
    submit those in writing.
        Thank you again, Senator.
        Senator HATCH. Thank you, sir.
        Good to see all of you again. Thank you for your kindness.
        Chairman REICHERT. Now will the next panel please take
    their seats. And we will begin the second panel of witnesses.
        Thank you for being here this morning. On our second panel
    this morning we will be hearing from Kay Brown, who is the
    Director of Education, Workforce, and Income Security, U.S.
    Government Accountability Office; Jason Turner, Executive
    Director, Secretary's Innovation Group; Elizabeth Lower-Basch,
    Policy Coordinator and Senior Policy Analyst, Center for Law
    and Social Policy; and Douglas Besharov, Normand and Florence
    Brody Professor, School of Public Policy, University of
    Maryland.
        Welcome.
        Ms. Brown, you can proceed with your testimony, please.
        You have 5 minutes. Thank you.

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

        Ms. BROWN. Chairman Reichert, Ranking Member Doggett, and
    Members of the Subcommittee, thank you for inviting me here
    today to discuss waivers of work provisions in the TANF
    program. I will talk about whether States express interest in
    these waivers and whether HHS granted any. My remarks are based
    primarily on a report we issued last September.
        As you know, one of TANF's key goals is to promote job
    preparation and work to help end dependence on government
    benefits. In fact, States are expected to ensure that a certain
    percentage of work-eligible families participate in work
    activities for a minimum number of hours each week, and these
    requirements are specified in law.
        Before TANF, under the Aid to Families With Dependent
    Children program, 46 States received approval from HHS to
    implement about 113 waivers between 1987 and 1996. These
    waivers were granted under Section 1115 of the Social Security
    Act and allow States to conduct pilot or demonstration projects
    to test the effect of changes to the existing program.
        Some of the waivers tested policies that became key
    features of the TANF program, such as stronger work
    requirements and, for the first time, time limits. When TANF
    replaced AFDC, States with ongoing waivers were permitted to
    continue to operate their programs under these waivers until
    they expired. The last one expired in 2007, and no provision in
    law allowed these AFDC waivers to be extended.
        Further, since TANF was created, HHS has not granted any
    waivers related to the program, although several States have
    expressed interest. Specifically, from 2000 through 2009, we
    found that five States asked HHS about the availability of
    waivers under TANF. For example, two States requested waivers
    because they thought that unanticipated circumstances, such as
    the September 11, 2001, terrorist attacks, might result in
    their noncompliance with certain Federal TANF requirements. In
    these cases, States generally were not asking for waivers to
    test new approaches through pilot or demonstration projects,
    which would be necessary in order to get a waiver under Section
    1115, and instead, were asking to be excused from specific
    requirements. HHS officials responded each time that they did
    not have authority to provide waivers and offered to work with
    the States to address their concerns through other
    flexibilities allowed under the law.
        Then, in 2001, in response to a Presidential memorandum,
    HHS asked the States for ideas of how increased administrative
    flexibility could lead to improved TANF outcomes. HHS documents
    show that five States indicated their interest in waivers that
    were specifically related to TANF work requirements. In their
    response, HHS officials indicated that the Department was in
    the process of reviewing its TANF waiver authority at that
    time. In July 2012, HHS issued the information memorandum
    indicating the Secretary's willingness to exercise Section 1150
    waiver authority related to TANF work requirements.
        I should clarify that we have not done an analysis of HHS'
    legal authority to grant these waivers. As of September 12th of
    last year, HHS documents showed that eight States had expressed
    interest in pursuing these waivers. We recently learned that
    two additional States have expressed interest. However, no
    State has formally submitted to HHS a request for a waiver. In
    conclusion, in contrast to the AFDC period before TANF, there
    have been no new waivers granted under TANF. And until last
    year, we found no formal documentation that HHS believed it had
    authority to waive the work requirements.
        This concludes my prepared statement. I am happy to answer
    any questions.
        [The prepared statement of Ms. Brown follows:]

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        Chairman REICHERT. Thank you, Ms. Brown.
        Mr. Turner, you are recognized for 5 minutes.

     STATEMENT OF JASON A. TURNER, EXECUTIVE DIRECTOR, SECRETARY'S
                            INNOVATION GROUP

        Mr. TURNER. Thank you, Mr. Chairman.
        My name is Jason Turner. I am formerly Mayor Giuliani's
    Commissioner for Welfare, Medicaid, and WIA during his second
    term. Now I serve as the Executive Director of the Secretary's
    Innovation Group, a network composed of 18 States' human
    service secretaries, representing more than half the
    population. Our members hail from Wisconsin, Michigan,
    Pennsylvania, New Jersey, Virginia, South Carolina, Florida,
    Louisiana, Texas, Arizona, and six other States. We exchange
    State-innovative program ideas and support national policies
    which favor work and economic self-reliance, helping families
    budget discipline and orientation toward limited government.
        I would like to take this opportunity to describe the
    circumstances in the period leading up to the passage of the
    Temporary Assistance for Needy Families program and how it
    relates to the current discussion over work requirements in the
    law. During the 1980s, there was an increasing public concern
    over the growth of the TANF predecessor program, AFDC, which
    you are well familiar with. To address this concern, HHS
    sponsored a large-scale experiment in which some families
    received fairly generous, unrestricted cash benefits via a
    negative income tax and a control group did not, in order to
    see what the positive and negative effects were. This
    experiment showed that those receiving the unrestricted welfare
    benefits worked significantly fewer hours and experienced
    higher levels of family dissolution than those in the control
    group. In other words, free money without obligations resulted
    in bad social consequences, something our grandmothers may have
    remarked did not require an experiment to predict.
        Partly as a result of this large-scale experiment, the
    Congress passed the Family Support Act in 1988, an education
    and training program intended to move recipients to work, and
    based on the premise that welfare adults would qualify for jobs
    and accept them if they were provided additional education and
    training to improve their skill levels.
        Regrettably, experience showed that this new provision of
    education and training did not have this effect. In fact, the
    opposite occurred from what we had hoped. In the first 5 years
    after the program was activated, rather than declining, the
    caseload increased by one-third to its highest level ever.
        Faced with these disappointing results, HHS conducted a
    multi-State, multi-year comparison of the effectiveness of the
    education and training model embedded in its then Family
    Support Act program against a work-first intervention,
    otherwise known as a labor attachment model. Under the work-
    first approach, welfare recipients are encouraged to get into
    the labor force as soon as they can find a job and improve
    their employment and wage circumstances from that point
    forward, in contrast to the skills model, where they remain
    outside the labor force while they undergo remedial education
    and training.
        The results unequivocally favored the work-first labor
    attachment model. The research concluded, employment-focused
    programs generally had larger effects on employment, earnings
    and welfare receipt than education-focused programs. And given
    the large number of programs examined in research and their
    variety of served populations, of implementation procedures and
    of different labor markets, these results provide more support
    for the advantages of employment-focused programs than
    education-focused ones.
        With all of these considerations in mind, the Congress
    spent a great deal of time evaluating alternatives as it
    crafted its 1996 legislation. The resulting program allocated
    funds to States with a substantial operating flexibility but
    with the understanding that States must place an increasing
    number of adult recipients into employment or work-related
    activities.
        Why didn't Congress just allocate funds via an unrestricted
    block grant? I can answer this from my perch at the time in the
    early 1990s as the HHS director of the AFDC welfare program and
    subsequently as a State welfare director in Wisconsin while all
    of this was happening. In general, States find it easy to run
    voluntary programs of remedial education and training, where
    slots are already available via community colleges or WIA and
    recipients could take advantage of these or not, as they wish.
    From a State's point of view, it is bureaucratically hard to
    run a mandatory program based on work activities. This is
    because a mandatory work program requires more supervision,
    more creation of qualifying activities, more attendance
    tracking, and more followup to assure progress is being made.
    But we know from experience the harder approach is necessary.
        Our member States in the Secretary's Innovation Group are
    not calling for the weakening of TANF work requirements, but
    the opposite. Our TANF policy brief lays out just such a policy
    agenda.
        Finally, as a former Federal executive branch official and
    former State welfare director, I tend naturally to favor
    executive branch authority and flexibility. But I also know
    that this impulse can be taken too far and lead some States to
    take the easy way out, when we know from robust experimentation
    and the results of the TANF program, that an ambitious work-
    first program will lead to increased employment and decreased
    dependency. We think policies should be carefully considered by
    the Congress, not abandoned by executive fiat.
        [The prepared statement of Mr. Turner follows:]

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        Chairman REICHERT. Thank you, Mr. Turner.
        Ms. Lower-Basch.

      STATEMENT OF ELIZABETH LOWER-BASCH, POLICY COORDINATOR AND
        SENIOR POLICY ANALYST, CENTER FOR LAW AND SOCIAL POLICY

        Ms. LOWER-BASCH. Mr. Chairman, Members of the Committee,
    thank you for the opportunity to share CLASP's views regarding
    the work rates that States must meet under the TANF program.
    CLASP develops and advocates for policies at the Federal,
    State, and local levels that improve the lives of low-income
    people.
        In calling this hearing, Mr. Chairman, you said that
    welfare should empower able-bodied recipients with the tools to
    secure a job, lift oneself out of poverty, and provide for
    one's family. I agree. Stable employment in a well-paying job
    is the best pathway out of poverty and into the middle class.
    Employment is one of the key ways that people contribute to
    society.
        Where we may disagree, however, is whether the work
    participation rate under TANF is an effective way of promoting
    this goal. I do not believe that it is. The work participation
    rate only measures attendance. It does not make any attempt to
    measure the effectiveness of State's employment programs,
    whether these programs actually get people jobs. It forces
    States and caseworkers to focus on documentation rather than
    helping clients and unnecessarily limits range of activities
    that can be counted.
        In an economy where family-supporting jobs are increasingly
    limited to those with at least a post-secondary credential,
    those without at least a high school diploma find it harder and
    harder to find any employment. Low-income parents need access
    to training that will allow them to escape the cycle of low
    wages, unstable work, and poverty.
        Many States have particularly highlighted as a problem the
    limits on counting basic education and GED classes toward the
    work rates. States have learned much about work-focused
    education in the decades since such programs were last
    evaluated, and we are also in a very different economic
    context.
        While the labor force participation of low-income mothers
    did increase dramatically during the early 1990s, this was not
    primarily due to the TANF work participation rate. Rather, I
    would credit the combination of the strong economy, the
    messaging effect of welfare reform, and the package of
    improvements that made work pay for low-income mothers. These
    included a rising minimum wage, an expansion of the earned
    income tax credit, child care subsidies, and public health
    insurance.
        States would almost certainly continue to enforce a work
    expectation even in the absence of Federal requirements.
    Moreover, the vast majority of low-income parents themselves
    value work and want to support themselves and their families.
    They do not need more work requirements but rather work
    opportunities and employment support.
        Looking to TANF reauthorization, we should start tracking
    at the State level performance on a wide range of outcome
    measuring, including employment, poverty, deep poverty, and
    other measures of material hardship. TANF should not be
    considered a success while millions of children are being left
    in deep poverty.
        States that are willing to be held accountable for the
    outcomes they achieve in their programs, such as employment
    entry, job retention, or poverty reduction, should be given the
    ability to opt out of the process-focused participation rate,
    either for the entire TANF population or for groups
    participating in specific programs, such as career pathways
    initiatives, in exchange for rigorous evaluation of these
    efforts. Whether such a flexibility is provided through waivers
    or through a new State option allowed under reauthorization,
    such experiments would help identify the most effective service
    models in the current environment. These pilots would also help
    to identify possibilities and pitfalls, moving more broadly
    from process measures to outcome-based performance measures.
        In my written testimony, I do discuss some modest changes
    to the work participation rate that can significantly reduce
    the negative effect as it is currently designed. Foremost among
    these is the replacement of the caseload deduction credit with
    employment credit. I also discuss funding and the value of
    creating a permanent source of support for subsidized
    employment programs. These received bipartisan support at the
    State level when they were funded with the TANF emergency fund.
    I really think we should build on that experience.
        I appreciate the opportunity to provide CLASP's
    perspective.
    I know welfare has often been a subject of deep disagreements.
    But I do believe it is possible to find common ground in
    improving the effectiveness of TANF in promoting work
    opportunity for low-income parents.
        [The prepared statement of Ms. Lower-Basch follows:]

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        Chairman REICHERT. Thank you for your testimony.
        Mr. Besharov.

     STATEMENT OF DOUGLAS J. BESHAROV, NORMAND AND FLORENCE BRODY
    PROFESSOR, SCHOOL OF PUBLIC POLICY, UNIVERSITY OF MARYLAND, AND
                  SENIOR FELLOW, THE ATLANTIC COUNCIL

        Mr. BESHAROV. Chairman Reichert, Ranking Member Doggett,
    other Members of the Subcommittee, it is good to see you again.
        What a time we are in. I appreciated the comments of the
    other panelists and Senator Hatch. My view is that this
    waiver--and I don't know anything about its legal basis, I know
    it wasn't intended when the bill was written by anyone on
    either side--my sense is that this waiver both goes too far and
    doesn't go far enough. And let me explain what I mean by that.
        It goes too far because there was one lesson we learned
    very clearly through the lead-up to welfare reform, and this is
    something that Jason Turner and Senator Hatch talked about: The
    evidence was really clear. The best way, as the Europeans say,
    to activate welfare recipients, was to do work first, meaning
    to encourage them to look for a job, and help them look for a
    job. And job training had to be second or third at best.
        I think that is right. I think the evidence from Europe,
    which I will talk about in a minute, is similar. But it is
    reinforced by the evidence in this country.
        Next week, the House will take up WIA, the Workforce
    Investment Act. The sad truth is the evaluations of that
    program show that it is hardly effective for the low-income
    families it is meant to serve. So that is why I say this waiver
    goes too far. It seems to abandon work first, and it seems to
    put too much reliance on a failed policy, which is our current
    job training program.
        But it also doesn't go far enough. And what I mean by that
    is we use the phrase, both sides use the phrase, flexibility,
    coordination, trying new things. But the new thing, the big
    thing, the needed waiver, the needed coordination is between
    TANF, which has now become something like a block grant, and a
    small one at that, and SNAP, UI, and the disability program.
    SNAP, UI, and disability now far, far outweigh what we spend on
    TANF. They provide an alternate route for government support.
    And each one of them separately has a minimum of Welfare-to-
    Work, work experience, job-first provisions.
        A true waiver for flexibility would do something about all
    those programs. Now, I think I am here partly because, at the
    University of Maryland, I study programs in socialist Europe.
    And that includes now France and Italy, as well as Germany, the
    Netherlands and the Nordic countries. And they are all moving
    to the kind of combined work-first program that I am talking
    about.
        If you look for a moment, I think you have a full-size
    picture of Figure 1. And this is part of the conversation we
    are having about the broader U.S. economy. And I don't for a
    moment want to say that it is only welfare or only disability
    that causes what is a striking decline in the labor force
    participation--excuse me, in the employment rate of America.
        But if you look at this, the United States is in red, and
    you see a sharp decline at the time of the recession. While the
    Germans were increasing, the Dutch have held constant; the
    French are doing things to try to improve their labor force
    participation. What are most of these countries in Europe,
    whether led by conservative or socialist countries, doing? They
    are combining their recipient programs, the equivalent of
    disability, the equivalent of SNAP, the equivalent of
    unemployment insurance, into one program. They are housing
    those programs in the same office.
        When someone applies for any one of those programs, those
    people are treated the same. The agency looks to see what the
    barriers are to employment and through a combination of work-
    first and other assists tries to help those people go to work.
        That is why I say this waiver both goes too far and not
    nearly far enough. It goes too far because I think it
    undermines the original finding that led the Congress to pass
    TANF, which is that work-first works.
        And, secondly, it doesn't go nearly far enough because this
    Administration, although it has said it supports broad waivers
    across programs, didn't use this opportunity to allow the
    States to combine their SNAP programs and their UI programs.
    And SNAP, at least, I know there is legislative authority they
    could have done.
        Thank you very much.
        [The prepared statement of Mr. Besharov follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman REICHERT. Thank you all for your testimony. We
    will now move into the question phase. I will ask Mr. Turner a
    question. But I noted a few comments by the panel that sort of
    struck a personal note with me. Mr. Turner's comment about free
    money without obligations results in bad social consequences;
    Ms. Lower-Basch, what activities are actually effective in
    helping people get jobs; and then Mr. Besharov, help people
    look for a job and the training could be second or third in the
    process.
        And it just sort of reminded me of my childhood. I am the
    oldest of seven children. And my father had trouble a few times
    in his life finding work, especially when we moved from
    Minnesota to Washington State in the 1950s. We were on--I think
    they just called it State assistance back in those days or
    public assistance, or something like that and stood in a food
    bank line, which wasn't really a food bank back then; it was a
    place that you went to, one place in Seattle, where they gave
    you bags of, you know, paper bags of bulgur wheat and flour;
    the staples. And I remember my father really struggling with
    being on public assistance. His self-esteem was erased. There
    was no pride there. There was domestic violence happening at
    home, it created a lot of stress.
        I don't know what happened. But eventually what he did is
    he turned to an activity, and the activity was he would walk--I
    know, you hear these stories all the time, ``I walked 4 miles
    to school in the deep snow.'' So this is the story my father
    and my mother told me, that he walked to work, to a place where
    he thought he might get a job, and sat on the curb with his
    lunchbox for 2 to 3 weeks and asked the guard at the guard
    shack, ``Do you know if there are any openings?'' The activity
    was him walking to the place where he wanted to go to work,
    sitting down on the curb with his lunch bucket, and waiting.
    Eventually, somebody came out and said, ``We know you are out
    here wanting to work. We will hire you.'' And he got a job.
        And so was that an activity that led to employment? It is
    hard to define, isn't it?
        I think the training then, of course, came second. He got
    the job and went in and became a steelworker, where they built
    railroad cars back then. Now it is Kenworth Trucking in
    Seattle.
        But I am sure a lot of people in this room and on this
    panel or their family members can identify with those things
    throughout their lives. So we really want to try to fix this.
    We want to make sure that we get people back to work. And that
    is the challenge here.
        Mr. Turner, today we have been discussing work requirements
    in the TANF program. Your testimony has provided a good summary
    of how Congress arrived at the current structure of work
    requirements in the TANF program. But TANF is only one program
    among many that are intended to help low-income families. Do
    other similar programs that provide help to low-income families
    have anything comparable to the TANF work requirements? If not,
    should these programs have activity requirements more like
    those in TANF?
        I think, Mr. Besharov, you sort of touched on that a little
    bit.
        Mr. Turner, comment, and then maybe Mr. Besharov could
    speak to it.
        Mr. TURNER. Thank you, Mr. Chairman.
        I will leave it to Mr. Besharov to comment on the specific
    programs.
        But let me just say in response to that that work
    activation or work activity, even where private employment is
    not available immediately, has tremendous benefits to anybody
    in any circumstance receiving assistance. The benefits to
    staying active, such as you described in your family history,
    are immense. We know, for instance, that those who are engaged
    in a work activity may benefit by keeping active, by keeping
    social with other people, by making connections with
    prospective employers or other people that can help them find
    employment. We know that they stay healthier. We know that if
    you are not active, you tend to become isolated, and you stay
    at home. We know that your health declines. Depression
    increases. Isolation sets in. Substance abuse goes up. So the
    longer you are inactive, after having been employed, the more
    your prospects decline over time.
        And so one of the things that work activation does, if you
    think of this as being a whole population of low-income people
    that are being served on welfare, a subset of that can be
    employed in the economy. And like an accordion, it goes up and
    down. The private economy takes more people and then takes less
    people. But you want to keep the entire population activated
    and doing something so that they are on the bench, ready to get
    off and go back into the football game.
        So, in a sense, work activation is a program idea for all
    seasons, whether it is--whether the economy is strong or weak.
        Mr. BESHAROV. Thank you.
        Let me take SNAP, food stamps, as an example. It is a very
    large program now. Tomorrow, I am going to be speaking on a
    panel at the USDA on this question of how to activate food
    stamp recipients. An issue is that many of them, about 30
    percent of all SNAP households, have earnings. But there is a
    substantial number of people who receive food stamps who aren't
    working. And the question, the challenge for the Congress is to
    make a distinction between those groups and find a way for the
    nonworking recipients to be activated, to use the European
    term.
        And I really want to emphasize that even at this time of
    high unemployment, work first, job search works. The Europeans
    have done studies because they have higher unemployment rates
    than we do. And the reason I asked an economist about this,
    what is the fancy word, is because I am going to testify. And
    it is variance from the mean. That is a fancy way of saying
    that while some counties today have unemployment rates of 25
    percent, other counties, other localities have unemployment
    rates of 5 percent. Some places have no jobs for aerospace
    engineers but loads of jobs, entry-level jobs. So we can't even
    use the unemployment rate as a reason for not encouraging work
    first. We just have to apply it in a reasonable and confident
    way.
        I think that the TANF rules, as they were, tended to do
    that. We saw very few examples of people saying TANF has been
    unfair or the State agencies have been unfair during the
    recession. And I think that speaks well of the system that the
    Congress adopted now almost 20 years ago.
        Chairman REICHERT. Thank you for your response.
        Mr. Doggett, you are recognized for questioning.
        Mr. DOGGETT. Thank you very much.
        Ms. Lower-Basch, let me ask you a very hypothetical
    question. Let's suppose that we lived in a world in which a
    significant number of Members of Congress did not feel there
    was political advantage in building on old stereotypes of
    welfare Cadillacs, of members of our society devoting their
    days to using taxpayer money at liquor stores and strip clubs,
    of numbers of Americans who desired to just live on the dole
    instead of to work, and that instead of building on those
    stereotypes there was a genuine, broadbased, bipartisan
    interest in Congress to lift people out of poverty. And let's
    suppose we lived in a hypothetical world where an
    Administration was not afraid of being stereotyped itself and
    provided some bold leadership with the TANF law coming up for
    reauthorization to make recommendations about how we might get
    people out of poverty and that this law and this
    reauthorization could play at least a limited measure in doing
    that. What would you see in that hypothetical world as the key
    elements that we need to have in a law focused on lifting
    people out of poverty, reducing the underclass in this society?
        Ms. LOWER-BASCH. Thank you. That is a big question. And,
    obviously, TANF by itself is not going to lift everyone out of
    poverty. Clearly, the other programs that Mr. Besharov
    mentioned are very important. The minimum wage, and the labor
    market as a whole. So, obviously, TANF is only going to be a
    piece. Within TANF, I do think it is engaging people in work
    activities, to the extent that they are able. I do think it is
    recognizing that some people are going to need to take the more
    indirect path, that, you know, if people are in the middle of
    being homeless, if their kids are about to go into foster care,
    that they need to focus on getting housing or resolving the
    problems that are putting them in crisis. If they are--do have
    mental health or substance abuse issues, they might get a job,
    but they are going to get fired from it, you know, if they are
    really in trouble. So they need to resolve those issues and
    then move to work.
        At a Federal level, I do believe in providing flexibility
    to States in return for real accountability on their
    accomplishments; as I said, I think funding subsidized
    employment is--that is clearly, when the public, private sector
    jobs are not available, a great way to give people real work
    experience, real connections to the work. And it also helps the
    employers. We know a lot of small businesses benefited from
    that during the recession.
        Mr. DOGGETT. Some of the testimony has indicated that the
    job training and educational opportunities really don't
    accomplish very much. And it does appear that some of these job
    training programs have not been very successful.
        What is your assessment of the role in any reform we have
    of the outcomes we should require concerning education and job
    training programs.
        Ms. LOWER-BASCH. Right. So let me start with the jobs
    evaluation, which is the study that did drive a lot of this
    belief that education doesn't work. And those programs clearly
    were not very effective. People were in very low-intensity
    programs. They didn't get anywhere. We know now you need to
    have credentials that have value in the labor market. You need
    to be much more connected to what employers say they need and
    not just more classroom-based. We have learned a lot in the
    past 20 years. The economy has also, frankly, changed. The
    unemployment rate for people without a high school diploma is
    twice what it is for anyone else. And employers are
    increasingly unwilling to just hire the folks like your dad,
    who have a great attitude but don't have any of the skills.
    They want people ready to show up and do the job on the first
    day. So we need to give people access to that training.
        Mr. DOGGETT. We have already let one program, the
    supplemental grants under TANF, expire. That was a benefit in
    Texas and a total of 17 States. What is the effect of losing
    that supplemental program and how should it be a factor in
    looking at further revisions or reauthorization of TANF.
        Ms. LOWER-BASCH. Right. So, overall, the value of the TANF
    block grant has been fixed in nominal dollars since it was
    created in 1996. So it has lost about 30 percent of its value.
    In the 17 States that got supplemental grants, obviously, the
    cut has been even greater.
        As we know, States do a lot of different things with their
    TANF block grants. So, in some cases, it is hard to pick
    specific things. But we know, in recent years, States have been
    cutting actually their Welfare-to-Work contracts; in many
    cases, providing less services. In many cases, child care has
    gotten cut back, which means that in some States, people are
    back to this crazy Catch-22, where you have to go on welfare in
    order to get a child care subsidy because the waiting list for
    child care for working poor is so long. All of these things
    happen when funding gets squeezed over time.
        Mr. DOGGETT. I thank you and all the witnesses, Mr.
    Chairman.
        Chairman REICHERT. Thank you, Mr. Doggett.
        Mr. Kelly, you are recognized for 5 minutes.
        Mr. KELLY. Thank you, Mr. Chairman.
        Mr. Turner, I was really interested in your testimony. One
    of the things is the dissolution of the family. When I looked
    at the title of this, the Temporary Assistance for Needy
    Families, the key to that being temporary, again, being a
    bridge from one point to another. And when we look at all these
    programs, we look at what the intentions were and then how far
    we get away from some of those things.
        But in your testimony, you talk--I think it is on page 1,
    about the dissolution of families. If you could just address
    that a little bit. Because I think the concern is--and coming
    from the private sector, I never, ever, in my lifetime ever
    regretted investing one penny in any type of a program that
    would train the people that worked for me in our dealership to
    get from where they were to where they could go, depending on
    their potential. But the key was we already had jobs for them.
    We had a market waiting for them. We had a way for them to rise
    from where they were.
        I just look at some of these programs and I think, Ms.
    Lower-Basch, you just made a statement, we are so far away from
    what we intended originally.
        Thanks for the variance in means. That is great.
        And I have only been here 2 years. But the idea was a great
    idea. But we want it to be a bridge from where you are to where
    you want to be and where you can be and where you should be.
        So, Mr. Turner, talk about this dissolution of family.
    Because I see in our culture right now, in our society, the
    basic family structure being broken down for many different
    reasons. A lot of it has to do with the economy. But you have
    to be able to take care of your own. You have to be able to
    take care of yourself. And you have to be able to dream that
    you can actually rise from where you started to wherever you
    want to go.
        This is troubling, is it not?
        Mr. TURNER. Yes, I think you are right. Absolutely, it is
    troubling. And the family is the original income transfer
    program, if you will, meaning, fathers, mothers, and children
    all transfer support to each other within the family unit. And
    once the family unit is dissolved, and fathers and mothers go
    their separate ways, it is very difficult for government to
    substitute as a parent or as an income source for the family.
        What they found out in this experiment is that over time,
    in 3 to 5 years of samples, both blacks and whites, and to a
    lesser extent Chicanos, had marital dissolution effects that
    were significant.
        We don't know precisely how that works. But we think that
    when there is an income that comes in that is not connected to
    the father or the mother's active employment and bringing money
    into the family, that the two parties tend to separate both
    psychologically and have different sources of income and,
    because they have an alternative source of income, tend to stop
    working and family breakup occurs.
        Mr. KELLY. When you expand that and you look at different
    programs that are available, really it is that ability to stay
    together as a family to get through the hard times that makes
    it very, very real then that as you go forward, as a child, if
    you see your parents working that way and you know they depend
    on each other for the general good of the whole family, then it
    works.
        I have noticed, at least in my lifetime--I don't have data
    to support this, this is just what I have noticed--I have
    noticed that those folks who really have that strong family
    bond, that nuclear family, tend to be able to get through hard
    times really well and then tend to duplicate those same
    experiences as they get older.
        So I know these programs are all necessary. And I think
    that we want to make sure that they are reaching the goal that
    we intend for them.
        So I want to thank you all for being here today. It is so
    important that we hear from you and that we continue this open
    dialogue to find out what we can do to really help our fellow
    citizens who need our help right now, but make sure that at the
    end, the end result actually gets to where we want it to be and
    we don't create some type of a model that leads to a further
    dissolution of the family and a further separation of those
    roles I think we consider so basic in our society.
        I thank you.
        And I thank you, Mr. Chairman.
        Chairman REICHERT. Thank you, Mr. Kelly.
        Mr. Davis, you are recognized for 5 minutes.
        Mr. DAVIS. Thank you very much, Mr. Chairman.
        And I, too, want to thank our witnesses for being here and
    for their testimony.
        You know, as I listened to the discussion and as I thought
    about it prior to coming, Ms. Brown, am I correct when I recall
    that you indicated that since the creation of TANF, there have
    been very few requests for waivers from States?
        Ms. BROWN. That is correct.
        Mr. DAVIS. Do you have any idea why there may not have been
    any?
        Ms. BROWN. Well, we have been talking about this. And I
    think one of the things to bear in mind is that in the early
    years after TANF was created, you know, States did have a great
    deal of flexibility, and they were experimenting in designing
    their own programs. And as time went on, the requirements for
    meeting their work participation rate and the constraints that
    States faced in meeting those work participation rates may have
    at that point increased some of the interest that we saw in
    more recent years asking for waivers. But beyond that, we know
    what was requested and we know what HHS said, but we have not
    done a lot of work on the reasons behind that.
        Mr. DAVIS. And you have not had to do a lot of work on
    trying to determine whether you would or would not grant a
    waiver. If nobody is asking, then you don't really have to deal
    a great deal with that. Right?
        Ms. BROWN. I see your point. Yes.
        Mr. DAVIS. Ms. Basch, let me ask you, the Director of the
    Congressional Budget Office testified last week that the budget
    cuts in the sequester, which begins tomorrow, would reduce
    employment by 750,000 jobs by the end of the year.
        How do you think this might affect or impact our efforts to
    take people from welfare and put them to work?
        Ms. LOWER-BASCH. Obviously, as, you know--a few of the job
    losses from the sequester may directly impact low-income
    parents. Both--you know, some of them may work as school aids
    or something like that, that would be affected. But it is more
    likely that low-income people will feel the indirect effects of
    the overall economy and reduced job growth and reduced jobs.
    So, yes, it will make it harder for people to find work. Many
    low-income families will obviously be affected by the direct
    spending cuts, things like Head Start and WIC as well.
        Mr. DAVIS. You know, I feel that there is a tremendous
    amount of myth that is projected, percolated about the
    willingness of people and the desire of individuals to work. I
    have lived in low-income communities all of my life, from the
    time I was born until even today. And many of those individuals
    had some difficulty. I was intrigued by the Chairman's story
    relative to his childhood because my family had pretty much the
    same experience. I can recall my father saying that he would
    rather drink muddy wine than stand in a line to get some food
    and sleep in a hollow log. I mean, that was his expression.
        And so this notion somehow that there are these vast
    numbers of people who want to live off public help, I think is
    more myth than reality.
        Are you aware of, Ms. Basch, programs that really help
    facilitate the entre of individuals into the workforce, and
    what are some of those?
        Chairman REICHERT. Could you make your answer short? Time
    has expired. Go ahead.
        Ms. LOWER-BASCH. I just want to say that, you know, we do
    think it requires both pieces; it requires the skills for the
    jobs but also the actual connection to the employers who are
    hiring. We know successful programs don't just train people up
    and then send them out in the world. They really make those
    direct connections from employers and, in some cases, give them
    the opportunity to demonstrate their work skills.
        Mr. DAVIS. Thank you, Mr. Chairman.
        Chairman REICHERT. Thank you, Mr. Davis.
        Mr. Renacci, you are recognized.
        Mr. RENACCI. Thank you, Mr. Chairman.
        I want to thank all the witnesses for being here today.
        You know, there was some discussion about labor and my
    colleague was talking about sequestration, maybe the loss of
    jobs. But, Mr. Besharov, we talked about in your testimony how
    a number of European countries have incorporated activity or
    Welfare-to-Work provisions into their social programs. Many of
    those countries have done so while dealing with high
    unemployment and other difficult labor market conditions. Based
    on your research in the area, what do you say or what have
    those European countries said to those who argue Welfare-to-
    Work policies cannot be effectively implemented or should be
    suspended during time of high unemployment?
        Mr. BESHAROV. Well, that is the crucial question here. And
    I think the answer depends on the political system or the
    political party in charge in each country. There has been a
    real pushback in Germany and somewhat of a pushback in some of
    the Nordic countries. But in the countries run by liberal or
    socialist governments, such as France, there has been no
    pushback. Here is the argument: They look at that chart which I
    showed you, Figure 1, and they see something between 60 and 70
    percent of the people who are eligible to work in the right age
    category working, but 30, 35 percent not working. And they see
    that number growing. And they don't think that they have a
    future, economically, when the number is decreasing, when there
    are fewer people working.
        And so they take a deep breath and they say, we have to
    push as many people as possible into looking for work. When
    they do that, two things happen: Number one, people who
    otherwise were disenchanted or discouraged about finding work,
    some of them find work. And the other part that happens is
    because there are people looking for jobs, and there is a push
    and pull about this, because there is more supply of workers,
    especially low-income workers, employers are more likely to
    expand and hire people.
        Now, this isn't a magic potion. And we are not going to
    eradicate unemployment. But we do have to use every means at
    our disposal to get the United States back in fighting shape.
    And this is one of the ways. One of the ways is to encourage
    everyone who is of the age to work and healthy enough to work
    to look for work.
        Mr. RENACCI. Thank you.
        Mr. Turner, Congress has spent years designing, reviewing,
    and modifying work requirements in TANF programs. And it is for
    that reason I strongly believe that any changes to requirements
    should be first handled by Congress through legislation. But I
    would ask, if this waiver is allowed to move forward, is it
    possible that States could maybe even want to go further with
    waiver programs like this?
        Mr. TURNER. Well, what we know from good work programs is
    that even if there--even if somebody is not on unemployment, if
    he is engaged in a work activity that is creating something of
    value, it is a value to a recipient himself. For instance, in
    New York City, welfare recipients engaged in work in parks
    throughout the city, which has increased their level of
    cleanliness from 85 percent to 95 percent. So why is that
    important? Because those people going into the parks are
    learning important lessons about work habits, reliability,
    staying on the job, taking direction from supervisors. These
    are the things that employers say are most missing among the
    low-income population; work habits, as opposed to work skills.
    Okay.
        So to answer your question, from that point of view, I
    think that once you get away from a program which offers an
    opportunity to actually provide work in a work-like setting and
    you do things like bedrest or staying in a remedial class, you
    are losing the opportunity to do what we call work hardening or
    getting organized around the idea that to take a job, you have
    to be prepared to keep the job, to stay on the job, and to get
    along with people. That is the main thing that you can learn
    outside of the labor force in a workforce setting.
        Mr. RENACCI. Thank you.
        Thank you, Mr. Chairman. I yield back.
        Chairman REICHERT. Mr. Lewis.
        Mr. LEWIS. Thank you very much, Mr. Chairman, for holding
    this hearing.
        I want to thank all of the witnesses for being here today.
    Today the House is considering a bill to reauthorize the
    Violence Against Women Act, one of the most important life-
    changing bills Congress ever created. I don't know how many of
    you know that TANF is an important part of the puzzle in
    helping survivors of domestic violence get back on their feet.
    A Huffington Post article broke down the challenges facing poor
    parents in the State of Georgia, my State, and deterring
    applicants. In fact, the Georgia Coalition Against Domestic
    Violence gave up helping women apply for TANF benefits.
        Mr. Chairman, I ask unanimous consent to submit the full
    article for the record.
        Chairman REICHERT. Without objection.
        [The submission of The Honorable John Lewis follows:]

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        Mr. LEWIS. Now, I happen to believe that poverty is a
    radical evil in our society. At one time, when we had full
    employment, unemployment was down to 4 percent, right? And we
    said we had full employment. There were still hundreds and
    thousands and millions of poor people. And we had the war on
    poverty. We had all these groups. Can any member of this panel
    suggest or tell me what should we do as a society, as a Nation,
    to maybe have a radical good, to abolish poverty from this
    land?
        It is shameful, it is a disgrace. When you travel through
    America, in spite of all of the resources, there are still so
    many people left behind. You are right: They are black. They
    are white. They are Latino. They are Asian American. They are
    Native American. I travel and I have seen this country. If we
    had all the resources, if we had millions and billions of
    dollars, if we end the wars, stop spending so much money on
    bombs and missiles and guns and take care of our people here at
    home, what would you suggest that we do? What proposal? What
    plan?
        Ms. LOWER-BASCH. As I said, you know, I think it is going
    to be a multi-tiered thing. One problem is there are an awful
    lot of people who are working, in many cases full time, year
    round, and they are still poor. Because we have an economy that
    has a lot of low-wage jobs. So there is a piece about both, you
    know, improving the labor market and providing supports for
    workers. There is a piece about, you know, people who have
    disabilities that really do prevent them from working. There
    are lots of different--there is no magic bullet. It is going to
    be 30 bullets, you know--I hate to use that metaphor. Let me
    not.
        But it is going to be a lot of different pieces to the
    puzzle to put together. TANF is one of the pieces, and it has
    been a broken link. Let's take your example of Georgia. Georgia
    used to pay TANF caseworkers to go to domestic violence
    shelters to help women apply for cash assistance. They stopped
    doing that because they decided they did not want to make it
    easy for people to get cash assistance. You know, you don't
    want people to break up marriages when they are good marriages.
    But when there is a domestic violence situation, you want TANF
    to be that lifeline. And it is not always there. So, yes, it
    has been a broken piece in the puzzle.
        Mr. BESHAROV. I am struck, Mr. Lewis, by the point you made
    and the point Mr. Kelly made. Because they are actually two
    parts of the same problem, which is the weakness of the family.
        I was at a job training program in Newark, inner city
    Newark. And these were women, almost entirely minority, who had
    been practical nurses, and they were in a training program to
    become registered nurses. And this is automatic; you go from
    $25,000 a year to $45,000 or $50,000. It just happens--you
    know, there is no magic bullet. It is once they get the skills,
    whether it is the Affordable Care Act or whatever, there are
    jobs. So this is automatic.
        And there were about 150 women in the room. And I said,
    ``What is the biggest problem that you have?'' And one of them
    got up and said, ``Well, the man in my life just doesn't make
    it easy for me. One day I went home, all my furniture was in
    the street, and he had set fire to it.''
        Now, I said to myself, this is crazy. I am sure, I said,
    ``How many other women have a problem like that?'' Three hands.
    I said, ``You mean exactly like that?'' They said, ``Yes.''
        Now, we have MDRC research from New York City when they did
    their program of job training and support for inner city women
    who wanted, volunteered, to go through job training and find a
    job. And what they found that was one of the major reasons why
    those women didn't make it is because the men in their lives
    did not support the idea of them becoming independent.
        So some part of this, some part of this is about family
    relations. We may call it family violence. We may call it the
    broken family. But a part of this is getting these young--I am
    feeling this age issue--getting these young people to do it
    right.
        Chairman REICHERT. Thank you.
        Mr. LEWIS. Thank you, Mr. Chairman.
        Chairman REICHERT. Thank you, Mr. Lewis.
        Mr. Young, you are recognized for 5 minutes.
        Mr. YOUNG. Thank you, Mr. Chairman, and Ranking Member, as
    well.
        This is an important conversation. This really does fit
    into the larger picture of how we address poverty in this
    country. So I am glad that Mr. Lewis brought that up.
        This is such a multifaceted challenge. Of course, the
    program
    we are here to discuss today plays a very important role in
    that puzzle. The weakness of the family. I have to say, before
    I get into the immediate concern of this hearing, I think if we
    could get the economy to grow a little faster, we would
    alleviate so much. I saw all heads nodding affirmatively on our
    panel when I said that. It would create more wherewithal so
    that we could fund these important programs, provide more hope
    and opportunity for people that--perhaps incentivize them to,
    if they are not already searching for work, to go out and
    search more actively, and just restore some hope and dignity
    and prosperity in this country. Because we know those on the
    margins of society who benefit from many of these important
    programs are most adversely hurt during a down economy. So
    reforming the Tax Code, the regulatory code and so on are
    things that we really need to do.
        With that said, I know we are here today to discuss the
    implications of HHS' unilateral decision to waive work
    requirements from the TANF program. At a time when national
    poverty rates and welfare spending are very high, at least
    compared to recent history, Congress needs to ensure that those
    who need help are receiving TANF in a manner that provides a
    path to self-sufficiency, which includes ensuring that the job
    training programs that are out there are effective. But we must
    not waive requirements that have led to more jobs and earnings
    and also reduced poverty and welfare dependence. On that, I
    hope all of us can agree.
        Now, before the 1996 Federal Welfare Law was signed into
    law by President Clinton, my home State of Indiana, under a
    Democrat Governor, Evan Bayh, created work requirements for
    Hoosiers who received welfare benefits. This ensured Hoosiers
    who were receiving benefits really got the benefits they
    needed. But we targeted this program toward those who needed
    the benefits most.
        As former Governor Bayh later said, the bottom line was
    trying to make someone self-sufficient. We were trying to
    achieve two values: One was the notion of community, and also
    responsibility. So this is exactly, in my estimation, what the
    1996 Federal Welfare Reform Law did, and is exactly what the
    Obama Administration is undermining through this unilateral
    decision by HHS.
        So if HHS now claims they have the authority to waive work
    requirements, I am curious, and I will direct this question to
    Ms. Brown, I know GAO hasn't conducted a legal analysis about
    the authority to grant these waivers unilaterally, but did you
    indicate that you have reviewed documentation showing that
    there is no evidence the Administration has believed it had the
    authority in the past? So does this set us up on a sort of
    slippery slope here? What conceivably could HHS claim they
    could waive within the TANF program in the future?
        Ms. BROWN. I am quite sure that our General Counsel will
    advise me that I have to be very careful with this question. I
    think----
        Mr. YOUNG. Please don't. Just be candid and forthright.
        Ms. BROWN. I think the issue is that what we saw when we
    looked at the records was a number of requests that States have
    made that were not necessarily grand redesigns. And during that
    process, HHS said, again and again, different people, different
    levels, we don't have that authority, we don't have that
    authority.
        And then, as the President issued a memorandum telling
    Federal agencies to talk to States and locals about how to
    remove some of the burdens so that programs could work more
    effectively, they were hearing from States that they would like
    waivers. And HHS said they were beginning to think about
    whether--they were revisiting whether they had waiver
    authority. That is as much as I know.
        Mr. YOUNG. That was a very carefully constructed response.
    But much appreciated. And I thank you very much for your
    testimony.
        I yield back.
        Chairman REICHERT. Thank you.
        Mr. Griffin, you are recognized.
        Mr. GRIFFIN. Thank you, Mr. Chairman.
        Thank you for holding this hearing.
        Mr. Besharov, I want to ask you, you talked about--Mr.
    Young was talking about the theory upon which the change was
    made. I want to know why it was made. Why would we take away
    the requirement that some sort of work--we have heard a lot
    about traditional work here. But I think that is a
    mischaracterization. I am looking at all the different
    combinations that one can engage in to fulfill the work
    requirement. There are all sorts of different things. And it
    seems to me the point of this is to get people engaged in
    productive work-related, work-type activities; not traditional
    work, necessarily. But why would the Administration do this?
        Mr. BESHAROV. Well, let me just quickly follow up on what
    Ms. Brown said.
        The authority the Administration is using to justify the
    waivers is quite a big gun. It is saying we have the authority
    to modify what you, the States, have to report to us;
    therefore, we can waive any portion of TANF. It is not just
    this portion, based on that.
        I have a feeling if the shoe was on the other foot, which
    is to say, if this were a Democratic House and a Republican
    Congress, we would have the same debate, only with different
    faces on the argument. This is a major expansion of executive
    authority if it is legal. If it is legal, it is because of
    quite a loophole; it is the teeniest little loophole that they
    are driving a truck through.
        You asked the question, though, why might they want to do
    it? And it is because of the argument you are seeing here,
    which is, some people read the history and the current
    situation to mean the best way to get people into a productive
    job is for them to get into a productive job and increase their
    earnings and experience. Other people think the best way to do
    it is through education and training first. That is a big
    argument. It was not quite settled in 1996. But for a while,
    the work-first people had it; they were going with it. The
    people who are on the losing end of that argument are, in large
    measure, in the Administration. So they get now, as the
    President says, I won the election. So they are revisiting this
    argument about work-first versus job training. I think that is
    what it comes down to. I think they are wrong, but I think
    they--it is a longstanding argument.
        One is never--I was trained as a lawyer--one is never
    supposed to ask a witness a question you don't know the answer
    to. But I believe, Jason, I believe it is the case that before
    you became Commissioner in New York, one half--one half of the
    women at City College were on welfare.
        Mr. TURNER. Yes, that is actually true. And beyond that,
    Mr. Besharov, they didn't graduate.
        Mr. GRIFFIN. We will save time for you to ask him
    questions.
        Mr. BESHAROV. Sorry. I apologize.
        Mr. GRIFFIN. My time is up.
        It looks to me like education is a big part of combinations
    that I am looking at. For those of us who have spent a lot of
    time getting an education and had spent a lot of time working,
    I think we can do a good job assessing which is the best
    preparation for life. But, correct me if I am wrong, and I know
    that there was some sensitivity to getting into this by Ms.
    Brown, but the Administration was--they were opposed to,
    legally opposed to changing this before they were in favor of
    it. Is that fair? Could you speak to that? If she can't, can
    you?
        Mr. BESHAROV. I think this was a new interpretation that
    reversed the opinion that HHS had for many years. It is clearly
    a new interpretation. And it gives them authority that many
    people, including HHS, didn't know it had before.
        Mr. GRIFFIN. Thank you, Mr. Besharov.
        Looks like I am out of time.
        Chairman REICHERT. Thank you, Mr. Griffin.
        Thank you all for your testimony today. I also want to
    thank the Members for being here at this important hearing. We
    have lots of work to do. Hopefully, we can come to an agreement
    so we can help those people out in our Nation who really need
    our help.
        A reminder to all Members, if you have additional questions
    for the witnesses, they will be submitted in writing, please.
    And we would appreciate receiving your responses when you get
    their questions in writing for the record within 2 weeks.
        We now adjourn the meeting, thank you.
        [Whereupon, at 10:30 a.m., the Subcommittee was adjourned.]
        [Submissions for the Record follow:]

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