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

                        REVIEWING HOW TODAY'S FRAGMENTED
                          WELFARE SYSTEM FAILS TO LIFT
                                UP POOR FAMILIES

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

                                    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

                                   __________

                                 JUNE 18, 2013

                                   __________

                              Serial No. 113-HR05

                                   __________

             Printed for the use of the Committee on Ways and Means

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                               U.S. GOVERNMENT PUBLISHING OFFICE
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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 June 18, 2013 announcing the hearing.................     2

                                   WITNESSES

    Jeffrey Kling, Ph.D., Associate Director for Economic Analysis,
      Congressional Budget Office, Testimony.........................     7
    Lawrence M. Mead, Ph.D., Professor, Department of Politics, New
      York University, Testimony.....................................    18
    Jennifer Tiller, D.C. Director, America Works and Sada Randolph,
      Former America Works Client, Testimony.........................    31
    Casey Mulligan, Ph.D., Professor, Department of Economics,
      University of Chicago, Testimony...............................    38
    Eric Rodriguez, Vice President, Office of Research, Advocacy, and
      Legislation, National Council of La Raza, Testimony............    57

                           SUBMISSIONS FOR THE RECORD

    Family Equality Council..........................................    85
    First Focus......................................................    89

     REVIEWING HOW TODAY'S FRAGMENTED WELFARE SYSTEM FAILS TO LIFT UP POOR
                                    FAMILIES

                                  ----------

                             TUESDAY, JUNE 18, 2013

                 U.S. House of Representatives,
                           Committee on Ways and Means,
                               Subcommittee on Human Resources,
                                                        Washington, DC.
        The Subcommittee met, pursuant to call, at 2:02 p.m., in
    room 1100, Longworth House Office Building, the Honorable Dave
    Reichert [Chairman of the Subcommittee] presiding.
        [The advisory of the hearing follows:]

    HEARING ADVISORY

     Chairman Reichert Announces Hearing Reviewing How Today's Fragmented
                 Welfare System Fails to Lift Up Poor Families

    Washington, June 11, 2013

        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 titled, ``More Spending, Less
    Real Help: Reviewing How Today's Fragmented Welfare System Fails to
    Lift Up Poor Families.'' The hearing will review programs designed to
    assist low-income individuals and families, how the programs can create
    disincentives to increasing earnings, and how they often fail to
    address factors that caused individuals to seek assistance in the first
    place. The hearing will take place at 2:00 pm on Tuesday, June 18,
    2013, in room 1100 of the Longworth House Office Building. This hearing
    will be the first in a three-part series of hearings on welfare reform
    issues.

        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 current Federal welfare programs,
    researchers who have studied the effects of the current system, and
    professionals working with low-income families to help them escape
    poverty. 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:

        According to the Congressional Budget Office (CBO), ``[t]he Federal
    Government devotes roughly one-sixth of its spending to 10 major means
    tested programs and tax credits, which provide cash payments or
    assistance in obtaining health care, food, housing, or education to
    people with relatively low income or few assets.'' Those programs
    include the Temporary Assistance for Needy Families and Supplemental
    Security Income programs under the jurisdiction of the Subcommittee on
    Human Resources, as well as the low-income subsidy for Part D of
    Medicare and the refundable portions of the earned income tax credit
    (EITC) and child tax credit (CTC), under the Committee on Ways and
    Means' health and tax jurisdictions. Further, CBO notes that ``[t]otal
    Federal spending on those 10 programs (adjusted to exclude the effects
    of inflation) rose more than tenfold--or by an average of about 6
    percent a year--in the four decades since 1972 (when only half of the
    programs existed).''

        A recent calculation by the Congressional Research Service
    indicated that there are at least 83 different Federal programs focused
    on helping the low-income population, and these programs are spread
    across more than a dozen Federal agencies. This broader list includes
    additional Human Resources programs such as the Child Support
    Enforcement program, Foster Care and Adoption Assistance, the John H.
    Chafee Foster Care Independence program, the Social Services Block
    Grant program, and the Child Care and Development Fund.

        While often individually and collectively called ``work supports,''
    research has demonstrated how low-income individuals collecting such
    benefits may receive little economic reward from increasing their
    earnings, especially if they receive benefits from multiple welfare
    programs. Those with incomes at or near the poverty line may be
    especially prone to losing more in benefits and tax credits than they
    gain from additional work and increased earnings. Recent research
    suggests that this effect may be exacerbated by certain policy changes
    that will further lower individuals' real financial gains from
    increasing their work and earnings.

        In addition to creating work disincentives, key Federal welfare
    programs provide assistance to low-income families and individuals
    without addressing factors that caused individuals to seek help in the
    first place. More broadly, of the 83 programs highlighted in the
    Congressional Research Service report, few Federal welfare programs
    require benefit recipients to participate in activities that help them
    find work or work more, escape poverty, and move up the economic
    ladder. Some programs provide assistance for indefinite periods, often
    without reviewing why the individual needs ongoing help. In some cases,
    benefits are provided without a representative of the program ever
    meeting the recipient in person.

        In announcing the hearing, Chairman Reichert stated, ``Our nation's
    welfare system should help people overcome their challenges and move up
    the economic ladder. Unfortunately, the current maze of programs not
    only fails to lift up many poor families in need, but it too often
    punishes those who work hard and do the right thing. It's time to
    highlight how this increasingly expensive system fails to address the
    real needs of low-income individuals and families, so we can determine
    how to craft reforms that provide the actual help families need to
    escape poverty.''

    FOCUS OF THE HEARING:

        The hearing will review current programs designed to assist low-
    income individuals and families, how they can create disincentives to
    increasing earnings, and how they often fail to address factors that
    caused individuals to seek assistance in the first place.

    DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

        Please Note: Any person(s) and/or organization(s) wishing to submit
    for the hearing record must follow the appropriate link on the hearing
    page of the Committee website and complete the informational forms.
    From the Committee homepage, http://waysandmeans.house.gov, select
    ``Hearings.'' Select the hearing for which you would like to submit,
    and click on the link entitled, ``Please click here to submit a
    statement or letter 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 Tuesday, July 2, 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 TTD/TTY in advance of the event (four
    business days notice is requested). Questions with regard to special
    accommodation needs in general (including availability of Committee
    materials in alternative formats) may be directed to the Committee as
    noted above.

        Note: All Committee advisories and news releases are available
    online at http://www.waysandmeans.house.gov/.

                                    ________

        Chairman REICHERT. I call the subcommittee to order.
        Today is the first hearing in a series on what government
    does to help low-income families get ahead, whether that is
    effective, and how that can be made to work better. We will
    start with a review of our current system and how much we
    spend, but, more importantly, whether that spending is
    effective in encouraging work and higher earnings by low-income
    individuals.
        So let's consider two facts. Fact one: We are spending more
    than ever to assist low-income individuals and families.
    According to the nonpartisan Congressional Budget Office, last
    year the Federal Government spent about $600 billion on just
    the 10 largest programs, which is over 10 times the $55 billion
    we spent in 1972 when half of these programs did not even
    exist.
        Fact number two: Despite all that spending, it is not clear
    that these programs are offering real help. For example,
    despite record spending, this is the slowest economic recovery
    in recorded history, with far too many families unemployed and
    living in poverty.
        Together, these facts make it hard for defenders of the
    status quo to say all is well, especially across the 83
    programs the Congressional Research Service has identified as
    assisting low-income families. And these facts make it even
    harder still for the millions of American families without
    stable work and reliable incomes as we now enter the 4th year
    after the recession has officially ended.
        Today, we will ask whether there are features of today's
    low-income programs that lead to little success in helping
    adults go to work and increase their earnings.
        As we proceed, I note we are intentionally taking a broader
    view than just those programs within our Subcommittee's
    specific jurisdiction. Our programs are key benefits for low-
    income families, but they do not represent all that taxpayers
    do to help low-income families. To really understand what is
    going on, you have to look at the big picture. So that is what
    we are going to do today, and that is what we are going to do
    in subsequent hearings.
        We are pleased to have a number of experts on these
    programs with us today, including someone who can provide a
    firsthand explanation--and this is something I insist upon. I
    always like to hear from those folks who have received help or
    have been seeking help and didn't receive help. We all can
    learn a lot from that kind of witness. And so we welcome Sada
    Randolph, a former client of America Works here in DC., to tell
    her important story. We are looking forward to that.
        Given the broadness of our topics, one hearing couldn't
    possibly do them justice. So our next hearing will build on
    what we learn today by exploring what really helps families and
    whether that knowledge drives what we spend our taxpayer money
    on.
        Finally, we will consider options for reform, including how
    we can work with our State partners to better coordinate the
    current maze of government programs to better serve families in
    need.
        Our goal is to help more low-income families leave poverty
    and achieve the American dream. That is not the Republican
    goal, it is not the Democrat goal; it is the goal of every one
    of us on this dais and every one of us in this room, I am sure.
    And the fact that too many of our fellow citizens have seen
    that goal slip from their grasp in recent years is our call to
    action.
        The status quo is simply not good enough. Spending more
    money on current programs is not good enough. Reforming
    programs so they spend smarter to achieve better outcomes is
    what we all should be working for. That is the challenge ahead
    of us.
        And I thank you.
        Mr. Doggett, you are recognized for your opening statement.
        Mr. DOGGETT. Thank you, Mr. Chairman.
        We are all committed to making every government program
    work as effectively and efficiently as possible for both the
    beneficiaries and taxpayers. But any attempt to label programs
    that are designed to promote economic opportunity or help
    struggling Americans as ``welfare'' doesn't move us toward that
    goal.
        I don't think that most folks across America believe that
    nursing care for seniors, Pell grants to assure that young
    people can achieve their full God-given potential, tax relief
    for working families, the school breakfast program, Head Start,
    and foster care, to which we devoted considerable bipartisan
    attention in this Committee, that they characterize those as
    ``welfare.'' But there are some among our colleagues who do and
    did during the last Congress in a call for reducing welfare
    spending.
        What I think we need to be focused on is a very specific
    conversation about how to make those programs under our
    jurisdiction, specifically the TANF program, actually move more
    people with existing resources from welfare to work. And I am
    committed to trying to do that.
        The Congressional Research Service report that was
    referenced in the announcement for today's hearing was put
    together at the request of Senator Jeff Sessions last October
    at the height of the Presidential campaign. He used that report
    to support the false claim that the United States spends more
    on Federal welfare than on any other program in the Federal
    budget. Now that the campaign is over with, I think we can
    probably leave that kind of rhetoric behind. It does not help
    us resolve these problems.
        I asked the Congressional Research Service very recently,
    in anticipation of this hearing, to do a further analysis of
    the spending in the top 10 programs that some Republicans have
    classified as welfare. Forty-nine percent of that spending goes
    to our senior citizens, the people that have built this
    country, and the disabled; 28 percent supports working families
    and individuals; 8 percent is for education; 14 percent is
    primarily for medical and food assistance.
        And, of course, we know there are efforts under way this
    week to cut five times as much from food security as the Senate
    did in its farm bill.
        Of the entire total, only about 1 percent is direct cash
    assistance to the needy in the form of the Temporary Assistance
    for Needy Families program.
        The written testimony submitted by some of our witnesses
    here today suggests that helping Americans during tough times
    will stop them from finding a job. One witness once even
    suggested that, if we just would have allowed more people to
    fall into poverty during the recession, they would be more
    likely to work.
        To me, that fundamentally misreads the character of the
    American people. I believe they want to work. They want to set
    an example for their kids and do right by their kids. And they
    want to engage in the struggle each and every day to do just
    that. We don't need to push more Americans into poverty for
    them to want to work.
        This also ignores the many programs within the jurisdiction
    of our Full Committee, such as the earned income tax credit and
    the Child Tax Credit, increase the value of work for anyone
    moving into a job that pays low or moderate wages. These Tax
    Credits increase the take-home pay of a minimum-wage worker.
    That is not only a major work incentive, but it also lifts
    millions of Americans out of poverty, including over a million
    Texans. Furthermore, research indicates that the efforts to
    make work pay, like the earned income tax credit, also help
    reduce generational poverty by boosting school achievement as
    well as future earnings.
        While the earned income tax credit and other programs
    designed to promote economic opportunity help Americans of
    every race and in every region, I am particularly pleased that
    Eric Rodriguez is here today from the National Council of La
    Raza to talk with us about how critical these programs are in
    supporting many Latino families as they achieve and maintain
    economic independence.
        And in terms of recent effort to assist people dealing with
    the severity of the recession, it is worth remembering that
    much of that assistance is already being reduced. The temporary
    tax assistance, the Medicaid expansion, the duration of
    unemployment benefits has also been significantly reduced. And,
    of course, the sequestration across-the-board cuts are cutting
    into many programs in a significant way.
        We can do more to promote and reward work, and we should,
    including reviewing and perhaps improving the phaseout points
    for some of these programs. But we need to do it together with
    a realistic view of the difference between these opportunity
    programs and what has traditionally been called ``welfare.''
        I yield back.
        Chairman REICHERT. Thank you, Mr. Doggett.
        Chairman REICHERT. And as you can see from the opening
    statements, there is agreement that we want to move people from
    welfare to work and we want to help people become successful,
    and there is also agreement that we need to be more efficient
    in our programs and maybe measure them a little bit more
    accurately, but some disagreement, maybe, on how we get there.
    We will work on that.
        Thank you, Mr. Doggett.
        So, without objection, each Member will have the
    opportunity to submit a written statement and have it included
    in the record.
        Chairman REICHERT. I want to remind our witnesses to limit
    their oral statements, please, to 5 minutes.
        And I will also let you know a little bit of a secret. At
    about 2:45, 2:50, you are going to hear some buzzers and bells
    go off. That means we will have to vote. So be ready for that.
        But, without objection, all the written testimony that you
    have will be made a part of our permanent record.
        And on our panel this afternoon, we will be hearing from
    Dr. Jeffrey Kling, Associate Director for Economic Analysis,
    Congressional Budget Office; Dr. Larry Mead, professor,
    Department of Politics, New York University; Jennifer Tiller,
    DC director, America Works; and Sada Randolph, former America
    Works client; Dr. Casey Mulligan, professor, Department of
    Economics, University of Chicago; and Eric Rodriguez, vice
    president, Office of Research, Advocacy, and Legislation,
    National Council of La Raza.
        Mr. Kling, you are recognized for 5 minutes.

       STATEMENT OF JEFFREY KLING, PH.D., ASSOCIATE DIRECTOR FOR
             ECONOMIC ANALYSIS, CONGRESSIONAL BUDGET OFFICE

        Mr. KLING. Mr. Chairman, Ranking Member Doggett, Members of
    the Subcommittee, thanks for inviting me to testify.
        I am going to do a review of what the spending has been on
    some of the major means-tested programs and tax credits, how it
    has grown over time, and what the Congressional Budget Office
    projects it is going to be into the next decade.
        The Federal Government devotes about one-sixth of its
    spending to 10 major means-tested programs and tax credits.
    They provide assistance for health care, cash payments and help
    obtaining food, housing, and education to people with
    relatively low incomes and assets.
        In 2012, Federal spending on those programs and tax credits
    totaled $588 billion. Medicaid accounted for more than 40
    percent of that spending, followed in size by the Supplemental
    Nutrition Assistance Program, or SNAP.
        Total Federal spending on those 10 programs rose 6 percent
    per year faster than the rate of inflation, or about a tenfold
    increase in the 4 decades since 1972, when half of those
    programs existed. As a share of the economy, Federal spending
    on those programs grew from 1 percent to almost 4 percent of
    gross domestic product over the period.
        Roughly half of that growth came from increases in spending
    for healthcare programs, Medicaid, and, to a far lesser extent,
    subsidies to help low-income people pay for prescription drugs
    under Part D of Medicare. That spending grew about fifteen-fold
    over the 1972 to 2011 period, from $20 billion to $305 billion.
    People who were elderly or disabled accounted for about two-
    thirds of the Medicaid spending and all the Medicare spending
    in 2011.
        The primary reason for the growth in healthcare spending,
    which averaged about 7 percent a year above the rate of
    inflation, was increased spending per participant. General
    growth in healthcare costs, shifts in the composition of
    beneficiaries, changes in the services covered by the program,
    and the availability of supplemental payments to healthcare
    providers all contributed to that growth.
        Had the amount of spending per participant in Medicaid
    remain unchanged over those 40 years, total spending on
    healthcare programs discussed here would have been about $88
    billion in 2011, or less than a third the actual amount.
        In addition to the increases in spending per participant,
    the number of participants increased from 17 million in 1972 to
    53 million in 2011 because of population growth and policy
    changes that increased eligibility for Medicaid.
        Growth in programs that provide cash assistance and
    programs that help people obtain food, housing, and education
    were about equally responsible for the other half of the total
    increase in spending over that period for those programs.
        Spending on cash assistance programs and tax credits, the
    largest of which is the refundable portion of the Earned Income
    Tax Credit, rose from $18 billion in 1972 to $151 billion in
    2011, nearly 6 percent a year above the rate of inflation.
        Spending on programs that help people afford food, housing,
    or education, the largest of which is SNAP, rose from $17
    billion to $172 billion, also about 6 percent a year above the
    rate of inflation in their growth. Unlike growth in spending on
    Medicaid, which stemmed primarily from greater spending per
    participant, growth in those programs resulted primarily from
    increases in the number of participants.
        If current laws don't change, total spending on these
    programs will grow faster than inflation over the next decade.
    But the differences between programs are pretty large.
        Spending on means-tested healthcare programs are projected
    to more than double, an average annual increase of 8 percent
    above the rate of inflation. That rise reflects expected growth
    in the cost of providing medical care. It also reflects
    expanded eligibility for assistance and new types of assistance
    to be provided under the Affordable Care Act. That law will not
    only make more people eligible for Medicaid but will also allow
    many low- and moderate-income people who do not qualify for
    Medicaid to purchase Federally subsidized health insurance.
        In contrast to spending on healthcare programs, total
    spending on the cash assistance programs and tax credits I have
    discussed is projected to fall over the next decade. That
    expected decline mainly stems from changes in the earned income
    tax credit and Child Tax Credit, which have changes that are
    scheduled to occur under current law.
        CBO also estimates that spending on nutrition and education
    programs will decline in the next 10 years, partly because
    spending on SNAP is projected to drop substantially as the
    economy continues to recover.
        There are additional details on these programs in a report
    that we issued in February of 2013, and I would be happy to
    answer any questions that you have about it.
        Thank you.
        Chairman REICHERT. Thank you, Mr. Kling.
        [The prepared statement of Mr. Kling follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                         ____________

        Chairman REICHERT. Mr. Mead, you are recognized for 5
    minutes.

    STATEMENT OF LAWRENCE M. MEAD, PH.D., PROFESSOR, DEPARTMENT OF
                     POLITICS, NEW YORK UNIVERSITY

        Mr. MEAD. Thank you, Mr. Chairman. I appreciate this
    opportunity to testify about Federal welfare programs.
        And the question we are asking is what we can do to make
    these programs more effective in moving low-income Americans
    ahead. I think that largely means what can we do to promote
    work in welfare, because it is through employment that most
    Americans get ahead.
        I think the welfare reform of the nineties showed
    essentially how to do that. In the Personal Responsibility Act,
    we enforced work more firmly than before, but at the same time
    we provided new benefits in the form of wage subsidies and
    child care to make it possible for people to go to work. So we
    combined help and hassle. We enforced work; we also promoted
    work.
        Equally important, the politics of reform was quite
    constructive. It was strongly bipartisan. Both parties
    contributed to the outcome. And the upshot was really not to
    downsize welfare but, rather, to change its nature so that it
    did indeed promote work.
        And I think my central message today is that we need
    another welfare reform that will do the same thing in some
    other programs. I recommend three steps, primarily.
        One is that we need to strengthen the work test in TANF. It
    does have some weaknesses, and especially the fact that States
    can sanction families that don't comply only partially and
    allow the mothers who are not working to keep most of their
    benefits. I think that is a mistake. We should require that the
    case be closed in those instances, and I think we would have
    higher work participation if we did.
        We ought to have a firmer work test in the SNAP program, or
    food stamps. Food stamps has some requirements on the books,
    but they are not very strong and they are not well-implemented.
    We need to be more serious about that and require that States
    achieve certain activity levels, as they have to do in TANF. I
    would certainly require one parent in a food stamp family, if
    it is a two-parent family, to be employed.
        We should also consider similar requirements in housing and
    even in EITC, where we commonly think that the credit produces
    higher work levels. Actually, I don't see persuasive evidence
    for that. EITC creates incentives both for and against work. I
    think we should consider an hours threshold, as we do in TANF.
    We should require, for people who get the EITC credit, they
    should have to work 20 or 30 hours a week rather than just
    whatever hours they choose. And if we did that, I think we
    would see more impact on work levels.
        The second thing we should do is institute a work test for
    men. Well, how do you do that when the men are not usually on
    welfare? Well, what we can do first of all is have a higher
    wage subsidy for single workers without children, most of whom
    are men. They should get a better subsidy.
        But, at the same time, we should enforce work for groups
    that are supposed to be working. And I am thinking particularly
    men who owe child support and aren't paying and also men
    leaving prison on parole. These groups are supposed to work;
    they often don't do so. And States have begun to institute work
    programs to enforce work for those groups. So, again, the
    combination of help and hassle, of benefits with requirements.
        The single best thing this Committee could do to promote
    that development is to allow the funding for child support work
    programs to be reimbursable under Title IV-D. This is, I think,
    an essential change which I hope you will consider.
        The third thing that we should do is rein in the disability
    programs. They are growing too rapidly. We have too many people
    on both Social Security Disability and especially SSI. We need
    to reconsider the idea that disability is open and shut, that
    either you are disabled or you are not. It would be better for
    the recipients and for society if we had partial disability,
    partial benefits, coupled with some activity requirements,
    where we expect people to work to a certain extent or engage in
    community service.
        We can't simply create a massive disincentive to work by
    giving people a pension where they never have to work for the
    rest of their lives; indeed, they can't work. We have to get
    away from that and both tighten up the rules for eligibility
    but also have some kind of activity requirement for those on
    these benefits. The Europeans, by the way, are ahead of us in
    this. They are starting to do this, and we need to do it, as
    well.
        Another thing they have done in the Netherlands is to
    require employers to be the initial funders of benefits for
    disabled people. So they don't have an incentive, as they do
    now, to shift their workers onto SSI rather than unemployment
    insurance because they don't pay anything for SSI and they do
    for UI. We need to consider requiring the employers to get some
    skin in the game.
        So I think disability programs are also important.
        In my written testimony, I consider a number of other
    impediments to people working that are often cited,
    disincentives lack of jobs inequality, a couple of others. And
    I want to emphasize that I think none of these are really very
    important, and we shouldn't be distracted by them. We can talk
    further about disincentives. You are going to hear from
    Professor Mulligan about that. I don't think it is very
    important. And we should focus instead on building an
    administrative work test where we actively tell people, you
    have to work, and we oversee to make sure they do it.
        Thank you.
        Chairman REICHERT. Thank you, Mr. Mead.
        [The prepared statement of Mr. Mead follows:]
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                         ____________

        Chairman REICHERT. Ms. Tiller and Ms. Randolph, you are
    recognized for 5 minutes.

     STATEMENT OF JENNIFER TILLER, SITE DIRECTOR, AMERICA WORKS OF
     WASHINGTON, DC.; ACCOMPANIED BY SADA RANDOLPH, FORMER AMERICA
                              WORKS CLIENT

        Ms. TILLER. Good afternoon, Mr. Chairman and Members of the
    Subcommittee.
        America Works started in 1984 as the first for-profit
    welfare-to-work company in the United States. Operating for 12
    years before welfare reform, America Works placed welfare
    recipients into private-sector jobs.
        Armed with knowledge and data, we lobbied Congress for
    nationwide welfare reform. After almost 30 years, America Works
    has broadened beyond welfare recipients to include returning
    prisoners, food stamp recipients, noncustodial parents,
    homeless individuals and families, veterans, those with HIV-
    A(IDS, and the disabled on Social Security Disability
    Insurance.
        Over the years, we have worked to get 350,000 people
    working in different States and cities throughout the country.
    As you can see from the document that was submitted on Friday,
    in New York City we are measured against all competitors and
    are consistently ranked as the number-one performer. We know
    that following is essential to our success.
        Over the years, America Works has taken on tough social
    problems which cost the taxpayers billions of dollars, with the
    belief that if a job is provided, dependency on the government
    diminishes and disappears.
        To that end, we have rapidly attached ex-offenders to work,
    therefore reducing recidivism to crime. We have taken people
    with a lifelong benefit of SSDI and gotten them employed and
    independent. America Works has taken people out of homeless
    shelters and showed that by providing jobs we vastly decrease
    the cost of homelessness. If work were the central social
    policy through which each problem is examined, we could create
    productive citizens and lower our expenses.
        America Works pioneered the work-first model. This has been
    critical to erasing years in which welfare recipients spent in
    and out of education and training programs which seldom led to
    jobs. When the regulations were being written for welfare
    reform, States were limited to a very small percent of people
    allowed to be in education and training programs. This forced
    employment first and training later for upgrading and improving
    prospects.
        America Works pioneered performance contracting, meaning
    you only get paid when and if you get someone a job and they
    actually keep the job. This technique forces greater
    productivity and outcomes. Unfortunately, most efforts still
    reimburse employment activities based uponline-item budgets,
    not job outcomes. Again, in the attached document submitted on
    Friday, you can see comparisons between America Works and
    various States' one-stop centers.
        America Works has operated with voluntary and mandated
    programs. When we began, everyone was voluntary. In 1996, with
    the Welfare Reform Act, all of that changed for welfare
    recipients. Productivity and outcomes vastly increased. Over
    the years, in New York City we have seen an expansion into
    mandatory requirements not just for welfare recipients but also
    for noncustodial parents, food stamp recipients, and homeless
    shelter residents.
        America Works recommends the Committee to undertake an
    expansion of work requirements for the growing group of people
    who receive transfer payments and public subsidies.
        Thank you for your time and consideration.
        And I introduce Sada Randolph.
        Ms. RANDOLPH. Good afternoon.
        I attended America Works last year, May of 2012. During
    that time, it was the same time that I had a terminally ill dad
    and also was a single parent with a son.
        When I attended America Works, the staff members really
    helped me in so many ways, as far as interview skills, resume
    building, the way to properly fill out an application for a
    job.
        And in doing so, with their efforts and also my own
    determination, I became employed with Jemsek Specialty Clinic
    as a medical records clerk. I have been there for a year, and
    also I have purchased my first brand-new car.
        So I am forever grateful to America Works.
        Chairman REICHERT. Thank you both for your testimony.
        And congratulations on your first brand-new car.
        [The prepared statement of Ms. Tiller follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                         ____________

        Chairman REICHERT. Mr. Mulligan, you are recognized for 5
    minutes.

    STATEMENT OF CASEY B. MULLIGAN, PH.D., PROFESSOR, DEPARTMENT OF
                    ECONOMICS, UNIVERSITY OF CHICAGO

        Mr. MULLIGAN. Chairman Reichert, Ranking Member Doggett,
    Members of the Committee, thank you for the opportunity and
    honor to discuss with you today how public policy has changed
    the reward to work.
        A basic economic principle is that the monetary reward to
    working has important effects on how many people are employed
    and how much they work. People without jobs or otherwise with
    low incomes sometimes receive benefits from social safety net
    programs. The benefits are rarely called ``taxes'' by laymen,
    but economists understand the benefits to have many of the
    characteristics of tax rates because a program beneficiary
    loses some or all of her benefits as a consequence of accepting
    a new job.
        I have illustrated the reward idea in Figure 1. The left
    bar measures the resources available when working, and the
    right bar measures the resources the same person would have if
    not working, including subsidies received net of taxes paid.
    The difference between the two bars is the monetary reward to
    working.
        Now, consider adding a new safety net program or expanding
    an old one. Exactly because it gives more help when not
    working, the new program reduces the reward to working. The
    combined effect of taxes and subsidies on the reward to
    accepting a new job can be summarized as a penalty--the
    effective amount that is lost from paying taxes and replacing
    benefits associated with not working.
        I like to express the penalty as marginal tax rate, namely
    as a percentage of employee compensation. If there were no
    penalty, then the marginal tax rate would be zero. Thanks to a
    labyrinth of tax and subsidy programs, the marginal tax rate
    can sometimes equal or exceed 100 percent, which means that at
    least as many resources are available when not working as when
    working. In such cases, a person might have more resources
    available to use or save as a consequence of working less.
        Legislation that cuts or credits taxes can nonetheless
    reduce the reward to working and increase the marginal tax rate
    if it cuts taxes more for those who work less than it cuts
    taxes for those who work more. High marginal tax rates are
    associated with small incentives to seek, create, and retain
    jobs. The consequences of high marginal tax rates are felt all
    over the economy, even by persons whose individual rates might
    not be all that high.
        At the same time the safety net programs implicitly tax job
    acceptance, they also implicitly subsidize layoffs, because the
    programs absorb some of the income and production an employer
    and employee together lose when an employee stops working.
    Layoff subsidies give employers and employees less incentives
    to take steps that might avoid or delay layoffs.
        America absolutely must have taxes and safety net programs
    even though they reduce the reward to working and even though
    they subsidize layoffs. But if this Congress wants to
    understand what is happening in the labor market or to the
    budgets of social programs, it would be counterproductive to
    approximate marginal tax rates as zero or to assume them to be
    eternally constant regardless of what incentives are embodied
    in new legislation.
        Of course, unemployment insurance program benefits are now
    available longer into unemployment spells than they were 6
    years ago, but also don't forget the new modernization
    provisions now provide unemployment benefits in a variety of
    circumstances, when they were formally unavailable. The food
    stamp program expanded in a variety of dimensions. The Recovery
    Act helped unemployed people pay for their health insurance.
        Figure 2 shows my estimates of 10 years of marginal tax
    rates coming from tax and subsidy programs, taking into account
    that some of the poor and unemployed do not participate in all
    or sometimes even any of the safety net programs. The combined
    effect of these and other changes through 2013 was to reduce
    the reward to work--that is, increase marginal tax rates for
    most of the non-elderly population.
        The reward to work will be further eroded beginning in
    January, when several significant provisions of the Affordable
    Care Act take effect. The new work disincentive provisions
    include: the sliding scale that sets premiums for people who
    buy health insurance under new marketplaces, a scheme for
    premium assistance that essentially resurrects the Recovery
    Act's COBRA subsidy in a more comprehensive form, employer
    penalties, and hardship relief from the individual mandate. The
    cumulative effect of all of this legislation is to increase
    average marginal labor income tax rates by 10 percentage points
    over what they were in 2007.
        A presumably unintended consequence of the recent safety
    net expansions has and will be to reduce the reward to working
    and thereby keep unemployment and poverty rates high and keep
    national spending low longer than they would have been if
    safety net rules had remained unchanged.
        Thank you.
        Chairman REICHERT. Thank you.
        [The prepared statement of Mr. Mulligan follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                         ____________

        Chairman REICHERT. Mr. Rodriguez.

        STATEMENT OF ERIC RODRIGUEZ, VICE PRESIDENT, OFFICE OF
      RESEARCH, ADVOCACY, AND LEGISLATION, NATIONAL COUNCIL OF LA
                                  RAZA

        Mr. RODRIGUEZ. Thank you, Mr. Chairman, Ranking Member
    Doggett, and distinguished Members of the committee. For 20
    years I have worked on antipoverty issues. It is a great
    pleasure to be here just to share our perspective.
        I would just like to make a few key points in my testimony.
        The first is that many of the Federal programs that we are
    talking about here that are designed to assist low-income
    families are doing what we have asked them to do and what was
    intended, in many ways.
        The second is that some of the tax credits that have
    already been mentioned in particular really stand out in terms
    of their impact on rewarding work and stand out as a Federal
    policy to reward work over time. And it is well-documented and
    there is really substantial research to support that.
        Finally, there are a lot of ways that we can lift up
    families out of poverty through Federal initiatives if we
    choose to invest more in those key particular areas.
        So the great recession has been devastating, I think as we
    all know. The national unemployment rate now is 7.6 percent,
    down from 10 percent in 2009. You have to go back to the early
    1980s to see a nationwide rate at that level. Today, there are
    still more than three unemployed workers for every job
    available.
        At the same time, we have had a housing crisis that took a
    devastating toll on working families. Substantial declines in
    household income and wealth, particularly among Latino and
    African-American families, have eroded financial security for
    all American working families.
        The Federal social safety net includes a range of programs
    that we have mentioned here that serve nonworking elderly, of
    course, the disabled, children, but also working families--and
    increasingly working families. Programs such as SNAP, Medicaid,
    and TANF are designed to provide basic security and, in the
    aggregate, help provide broadly shared financial stability
    during difficult times.
        SNAP participation grew, as we have already mentioned, 27
    percent between 2007 and 2009, but as a result of the
    recession. These programs and efforts are not designed to
    remedy macroeconomic or labor market issues, but rather to help
    families deal with the fallout from these macro trends.
        One of the most valuable and effective responses we have
    seen comes in the form of tax credits. In 2011, just by way of
    example, the EITC prevented 6.1 million people, including 3.1
    million children, from slipping below the poverty line. The
    credit has also been proven to have other positive effects for
    working families. And, again, extensive research is there to
    support that.
        Expansions of credits and programs that assist low-income
    workers have been a central piece in economic recovery, as you
    have seen. In fact, the safety net reduced poverty by almost
    half in 2010 by accounting for the positive effect of programs
    like SNAP as well as the low-income tax credits.
        Yet some argue that these programs discourage work. In
    general, benefits decrease as earnings rise, and we know this.
    But, as in the case of the tax credits, policymakers can
    mitigate those effects through properly designed phaseout
    rates.
        But, by and large, increasing employment, boosting wages,
    lifting up income and earnings, and improving levels of wealth
    for families, as we all want, can be best achieved when jobs
    and economic opportunity are plentiful. Stabilizing families
    during an economic downturn is certainly a sensible first step,
    and needed.
        The evidence is clear that means-tested antipoverty
    programs have served as foam on the runway that Main Street
    needed to soften the harsh effects of our financial crisis. But
    American businesses are still hesitant to hire. It may take
    years for the labor market to return to help without further
    interventions.
        Targeted efforts to create jobs, such as funding for
    infrastructure repairs and rebuilding in low-income
    neighborhoods, are smart, commonsense solutions. Raising the
    minimum wage, expanding access to paid leave, affordable child
    care, are also all important at rewarding work and important
    during this time.
        However, policy does seem to be moving in a different
    direction, and let me just give you three quick examples.
        The Federal budget sequester, of course, has been
    devastating on complementary programs. An estimated 270,000
    people will be cut from Federal job training programs that
    serve youth. Latinos will lose about 25,000 slots in Head Start
    programs.
        The recent version of the farm bill also raises great
    concerns. SNAP has been proven to be highly effective, yet we
    are seeing $4 billion in the Senate and possible cuts of $20
    billion in the House version of the farm bill--again, issues
    that we are really concerned about.
        And the Budget Control Act, recently signed, made permanent
    a lot of the tax credits that were put in place in 2001, but
    the EITC was only expanded or extended for 5 years and not made
    permanent, so a major concern.
        So, in summary, most of the programs that we are talking
    about have served the purpose that they were intended to serve.
    Tax credits remain crucial in this regard. And policy options
    are in front of us if we can invest in those areas.
        Thank you very much.
        Chairman REICHERT. Thank you, Mr. Rodriguez.
        [The prepared statement of Mr. Rodriguez follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                         ____________

        Chairman REICHERT. Well, now we will move into the
    question-and-answer phase. And I would like to begin by asking
    Ms. Randolph a couple of questions.
        Have you testified before Congress before?
        Ms. RANDOLPH. No.
        Chairman REICHERT. Isn't this fun?
        Ms. RANDOLPH. Yes.
        Chairman REICHERT. Well, good. I am glad you are having
    fun. So we are just going to have a conversation, okay?
        Ms. RANDOLPH. Okay.
        Chairman REICHERT. We just want to learn from you, because
    I think it is really important. You have been there, done that.
    You have been through the system. I mean, all these guys are
    smart guys and gals that are sitting here, but you are the one
    with the wisdom and the experience, as far as I am concerned,
    okay?
        Ms. RANDOLPH. Okay.
        Chairman REICHERT. So you went to the Department of Human
    Services in New York, right?
        Ms. RANDOLPH. No, in DC.
        Chairman REICHERT. In DC.
        Ms. RANDOLPH. Yes.
        Chairman REICHERT. I am sorry, in DC. And you were provided
    with some benefits----
        Ms. RANDOLPH. Yes.
        Chairman REICHERT [continuing]. Right. And then you went to
    America Works.
        Ms. RANDOLPH. Yes.
        Chairman REICHERT. What was different? What was your
    experience? What is the difference in the two? How did you find
    yourself becoming successful through what America Works does
    versus the Department of Health?
        Ms. RANDOLPH. Basically, the support from America Works,
    both as far as finding employment but also in personal.
    Because, at that time, I was going through a personal matter.
        They helped me with so much as far as building my
    confidence, helping me with finding employment and staying
    determined, staying on track. Even though I had all this going
    on in my personal life, I had them to come to every day to talk
    to, also for them to support me in any way possible.
        When I got there, it seemed it was just great. I loved it
    there. I really did.
        Chairman REICHERT. What didn't you get at the Department of
    Human Services in DC.?
        Ms. RANDOLPH. Just the benefits.
        Chairman REICHERT. Just benefits.
        Ms. RANDOLPH. Yes. So what you really were looking for was
    someone who could tell you, you know what, Sada, you can do
    this----
        Ms. RANDOLPH. Yes. Yes.
        Chairman REICHERT [continuing]. To build your self-
    confidence, you can get a job like this, you can have a dream.
        Ms. RANDOLPH. Yes.
        Chairman REICHERT. So how did they help you build that
    confidence? What were some of the things that they did?
        Ms. RANDOLPH. Every day I would come in, they would sit
    down and talk with me. If I had any personal issues as far as
    transportation or anything that would keep me from getting to
    America Works, they would help me with that. Also, helping me
    with my resume, my interview skills, whatever I needed help
    with. Also, searching jobs with me. One-on-one time was most
    important to me, and I received that when I got to America
    Works.
        Chairman REICHERT. And when you were working with Human
    Services, how did you feel? I mean, you were just getting
    benefits. Were you frustrated? Were you anxious? Were you
    looking for work?
        Ms. RANDOLPH. I was looking for work, because I know I am a
    smart girl----
        Chairman REICHERT. Yes.
        Ms. RANDOLPH.--and I knew that was not where I wanted to
    be. But I also had a child feed. So, I mean, with them I did
    become frustrated, but I also was grateful--
        Chairman REICHERT. Sure.
        Ms. RANDOLPH [continuing]. Because I had a way to feed my
    son.
        Chairman REICHERT. Right.
        Ms. RANDOLPH. Yeah, so I just became a little frustrated,
    but----
        Chairman REICHERT. You would rather be where you are
    today----
        Ms. RANDOLPH. Yes.
        Chairman REICHERT [continuing]. With a job versus----
        Ms. RANDOLPH. Yes.
        Chairman REICHERT. Yeah. Good.
        Ms. Tiller, what would you say to someone who might look at
    Ms. Randolph and say she represents a few people who are easy?
    She is obviously a very bright young lady, someone who may be
    easy to find work for, as opposed to many other people on
    benefits who can't be put to work right away without years of
    education or training or similar services.
        Ms. TILLER. Generally, everyone who comes to any of our
    America Works offices are people who, before they met us, were
    not believed in. So regardless of the duration on TANF or any
    types of services before, it is building that confidence that
    Sada referenced.
        It is advocating on their behalf when it comes to their
    housing situation or additional benefits needed or childcare
    subsidies. It is making sure that anyone who walks into our
    office is matched appropriately to a job. You know, work first
    works best.
        So we make sure that any individual--we look at their
    wraparound services that are needed. We offer them a
    comprehensive approach. But, really, it is just building their
    confidence.
        Chairman REICHERT. Yeah. Well, thank you so much for what
    you do and America Works does.
        And congratulations to you, Ms. Randolph.
        Ms. RANDOLPH. Thank you.
        Chairman REICHERT. You are welcome.
        Mr. Doggett, you are recognized.
        Mr. DOGGETT. Thank you, Mr. Chairman.
        And thanks to all of our witnesses.
        Mr. Kling, I know that the CBO has studied a number of
    times the earned income tax credit, I think most recently in
    your November 2012 marginal tax rate report.
        Does the research indicate that the EITC has helped pull
    people into the labor market by increasing the value of work?
        Mr. KLING. Yes, Congressman, it does. We have a report that
    was specifically on the refundable tax credits that is even
    more recent, from January. And that is clearly spelled out
    there.
        Mr. DOGGETT. The report I looked at said it makes work more
    appealing and that studies have found that expansions of the
    EITC between 1986 and 1996 significantly increased the movement
    of single mothers into the work force.
        Mr. KLING. Those are our findings, yes, sir.
        Mr. DOGGETT. And by boosting the value of work, has the
    EITC also reduced poverty rates for Americans in low-wage jobs?
        Mr. KLING. That is correct.
        Mr. DOGGETT. Thank you.
        Mr. Rodriguez, what will be the effect on poor families of
    significantly changing the earned income tax credit?
        Mr. RODRIGUEZ. Well, if the changes are meant to lessen the
    credit in some way or----
        Mr. DOGGETT. Yes.
        Mr. RODRIGUEZ. --cut back on eligibility in some particular
    way, I think it would be devastating. I think as many of you
    know, the effects of the credits, I think, are proven to reduce
    poverty.
        But, also, on an individual level, many families, you know,
    they go to work. They look forward to their tax refunds at the
    end of the year. They use it to pay off bills and other basic
    necessities. The notion that we will be reducing refunds in
    some way, I think, could have a very, very devastating impact
    and certainly set us back with respect to the recovery.
        Mr. DOGGETT. And, Mr. Kling, on the issue of food security
    and the SNAP program, I believe that CBO projects that the
    overall spending on SNAP will drop substantially in real terms
    over the next decade under existing law, if we just maintain
    the existing law.
        Mr. KLING. That is correct.
        Mr. DOGGETT. And this is based on the premise that the
    program grew when the recession was the deepest, and we think
    that is changing. And it accounts for the fact that the food
    stamp benefit levels will drop some this fall because of
    changes that are already set to take effect in the SNAP law.
        Mr. KLING. Yes, sir. We think that the economy is on a path
    toward recovery. And, over the next decade, that will have a
    substantial impact on reducing the amount of expenditure in the
    SNAP program.
        Mr. DOGGETT. Thank you.
        And, again, Mr. Rodriguez, in terms of what the impact will
    be on Latino families and other families if the House were to
    enact the bill that is before us this afternoon--in fact, that
    is what the bells were ringing about, to bring that up--that
    involves five times as much of a cut in the SNAP program as
    that made by the Senate.
        Mr. RODRIGUEZ. Yeah, as we discussed, SNAP and the EITC
    work pretty closely together to assist families who are
    working. And, as you know, the State and local impacts of the
    EITC, SNAP payments are tremendous on local economies. You
    know, in Texas alone, 2.7 million households claim the EITC.
    That is over a million families that are receiving those
    benefits. I think SNAP has very similar overlays, and so you
    are looking at deep impacts in similar places. And I think we
    should be very concerned about that.
        Mr. DOGGETT. We have heard substantial criticism of some of
    the existing programs today from some of the other witnesses.
    What do you believe are some of the strategies that we need to
    pursue in order to get long-term reductions in poverty?
        Mr. RODRIGUEZ. Well, I certainly think, you know, looking
    at the EITC, for those who may be concerned about some of the
    work incentives or discouraging, again, I think the phaseout
    rates offer some, I think, pointers in that direction.
        I think further work support investments--transportation
    subsidies, childcare subsidies--that help workers either stay
    in the work force or expand their hours seems to me to be a
    good direction to go in, in addition to some of the job-
    creation and job-growth elements that I have mentioned before.
    And they are in my testimony.
        Mr. DOGGETT. And is early education and avoiding these
    across-the-board cuts in Head Start a part of that also?
        Mr. RODRIGUEZ. Absolutely. Part of the research that we
    have seen talks about intergenerational poverty and how that
    affects families. And we certainly have seen research that
    shows that children of recipients of the tax credits do better
    in terms of educational outcomes and college attainment. And so
    I think we would be definitely concerned about the effects on
    the longer-term implications for families, as well.
        Mr. DOGGETT. Thank you.
        Thank you Mr. Chairman.
        Chairman REICHERT. Thank you, Mr. Doggett.
        Mr. Young, you are recognized for 5 minutes.
        Mr. YOUNG. Thank you, Mr. Chairman, for holding this
    important hearing.
        I thank all of our panelists.
        Ms. Randolph, your testimony was incredibly inspiring to
    me. And I think the idea here is to try and figure out ways to
    reform the programs at issue today so that our social safety
    net does not become a cage for many Americans; instead, it
    becomes what it was intended to be, to my mind: a springboard
    to go out and realize your capabilities, put those to use, and
    make a better life for yourself and your family. And you
    certainly embody that, so thanks for being here today.
        Times are tough. Some of the solutions I have already heard
    put forward today with respect to improving the lives of people
    on the margins of our society involve greater expenditure. I
    know that argument can be made, but I would like to invoke the
    old British saying which is, ``Now that the money has run out,
    we shall have to begin to think.'' It is time for us to think
    creatively about how a number of these programs are structured.
    And to do that, I think in some cases it would be helpful to
    have more information.
        Prior to 1988, it was impossible to determine what
    percentages of AFDC recipients were actively engaged in
    workfare, job search, training, or other efforts to reduce
    dependence. States actually competed with each other in
    disseminating misleading data, which implied that most of those
    who made up their caseload were engaged in serious efforts to
    leave the government rolls.
        With the passage of the 1988 welfare reform legislation,
    States were required to report accurately the activities of
    their AFDC recipients. It was soon revealed that only a tiny
    fraction of recipients were actually engaged in job search and
    training. And that information, garnered through those 1988
    reforms, led to the intellectual foundation for later welfare
    reforms which incorporated a work requirement, to the benefit
    of people like Ms. Randolph.
        So my questions pertain to evidence-based policymaking, and
    they will directed toward Mr. Mead and Mr. Mulligan.
        In terms of other Federal programs, such as SSI or SNAP,
    which programs currently require States to report on the
    activities of government benefit recipients?
        Mr. MEAD. To my knowledge, TANF is the only program that
    has detailed requirements of reporting on what recipients are
    engaged in. I don't believe we have that in food stamps or SSI.
        Mr. YOUNG. Mr. Mulligan, would you agree with that
    assessment, to your knowledge?
        Mr. MULLIGAN. The SNAP program has a quality control sample
    that I believe comes from each of the States. I don't know
    exactly the administrative role of the States in that, but each
    of the States is represented there. The Department of
    Agriculture makes it available every year. It is a yearly
    sample of people who are actually on the SNAP program, the type
    of household they live in, whether they are working----
        Mr. YOUNG. Right.
        Mr. MULLIGAN [continuing]. Those sort of issues.
        Mr. YOUNG. So we have 83, by my last count, what some call
    welfare programs. Others characterize that as an unfair term,
    although I think just about every panelist used that term. We
    will call them means-tested Federal benefit programs.
        Just about all of them require no sort of work requirement
    or even requirement that there be some reporting on the
    activities related to work or job search of the recipients.
        Should the Federal Government extend these reporting
    requirements to other means-tested government programs, in your
    estimation? And if we should extend these requirements, should
    we also apply rigorous evaluations to determine the
    effectiveness of these programs on benefit recipients?
        Mr. Mead.
        Mr. MEAD. Well, in principle, I would favor that, but let's
    remember there are administrative costs associated----
        Mr. YOUNG. Sure.
        Mr. MEAD [continuing]. With this kind of reporting.
        I don't know that all the programs need it. It seems to me
    that the major programs are those that most of the recipients
    are likely to be on, including food stamps, TANF, EITC. We
    should content ourselves with getting good reporting on those
    programs. And if, in those connections, people are working,
    fulfilling the requirement, then that is going to take care of
    the others. So I don't think we need to see this as a general
    problem--
        Mr. YOUNG. I will interject, due to limited time.
        And, Mr. Mulligan, I believe we have spoken offline about
    this issue, and you share that perspective; we should focus
    more on where most of the money goes, frankly, on reporting
    requirements for those programs. Is that correct?
        Mr. MULLIGAN. Yes, start with the big pieces. And I also
    recommend that--the Census Bureau runs some surveys of the
    population, especially the poor population, the SIPP and the
    Current Population Survey. Those could be cleaned up and
    improved for the purpose of measuring program participation
    more completely. And that would be made administratively more
    cheap and valuable for research.
        Mr. YOUNG. And, finally, based on these findings, this
    information gathered, should the Federal Government incorporate
    evidence-based funding criteria into these well-intentioned
    programs? Yes or no, if you can, because my time has expired.
        Mr. MEAD. In principle, yes. But we have to sometimes carry
    out studies to determine what the effects are.
        Mr. MULLIGAN. Yeah, I would say yes.
        Mr. YOUNG. Thank you.
        Chairman REICHERT. Okay. Thank you, Mr. Young.
        Mr. Lewis, you are recognized.
        Mr. LEWIS. Well, thank you very much, Mr. Chairman.
        I want to thank each and every one of you for being here.
        Except for the Associate Director of CBO and Ms. Randolph,
    have any of you been without a job or known someone without a
    job after 2007, known someone that didn't have a job or
    couldn't find a job? Make it brief, please.
        Mr. MEAD. Yes. I have friends who have been unemployed.
        Mr. LEWIS. Okay.
        Ms. TILLER. Yes, I have had friends who have been
    unemployed.
        Mr. LEWIS. Okay.
        Yes, sir.
        Mr. MULLIGAN. My wife was laid off at the beginning of the
    year. She is still unemployed.
        Mr. LEWIS. Okay.
        Mr. RODRIGUEZ. Likewise, yes. Not my wife, but, you know, I
    have had----
        Mr. LEWIS. Thank you. Did any of the people that you know,
    any of your friends try to take relief or seek relief from any
    of these Federal programs?
        Mr. MEAD. In the cases I know, I don't know, but I don't
    believe so.
        Mr. LEWIS. Okay.
        Ms. TILLER. I wouldn't be made aware.
        Mr. LEWIS. Okay.
        Yes, sir.
        Mr. MULLIGAN. I am not sure I understood your question.
        Mr. LEWIS. I think my question is, did anyone you know try
    to seek out benefits of these Federal programs?
        Mr. MULLIGAN. Well, my wife looked at unemployment
    insurance, which is a State program.
        Mr. LEWIS. Okay. That is okay. I think some of the
    resources come from the Federal Government.
        Mr. RODRIGUEZ. The answer is yes, but--yes.
        Mr. LEWIS. Well, let me--are any of you taking the position
    that we should just de-fund these programs and get rid of them
    and let people fend for themselves?
        Mr. MEAD. I am not in favor of that. My concern is that we
    require people to work in return for benefits, but I am not in
    favor of cutting the benefits. We still need to help people.
        Mr. LEWIS. So you are not in favor of abolishing the
    program, that the Federal Government get out of the business of
    helping people, throwing people a lifeline.
        Mr. MEAD. I don't think the problem in welfare is that we
    are helping people. The problem is sometimes that we are not
    expecting people to help themselves.
        Mr. LEWIS. Okay.
        Mr. Chairman, I would like to yield the balance of my time
    to Mr. Davis.
        Mr. DAVIS. Thank you very much, Mr. Chairman.
        And thank you, Mr. Lewis.
        Chairman REICHERT. If I could just interrupt, Mr. Davis,
    very quickly. We have 2 minutes to get over to vote.
        Mr. DAVIS. All right. Then I will just say that the line of
    questioning I think that we are seeing pursued in some way is
    this whole business of, are people likely to not seek work
    because of the benefit that they might be receiving?
        The benefits that I have seen people receive generally were
    not enough to be the kind of reward that might say to a person,
    I don't really need to go out and seek work as assiduously as
    someone thinks because I am receiving a benefit that is rather
    minimal.
        And I will continue to pursue that. Our time is obviously
    up, and we have to run and vote, but when we return. So thank
    you, Mr. Chairman.
        Chairman REICHERT. Thank you, Mr. Davis.
        Thank you, Mr. Lewis.
        And I apologize to the witnesses. We are going to disappear
    for a few minutes. We will be back as soon as we can. If you
    could please remain, we have just a few more Members to ask
    questions, so I would ask your patience.
        The Committee hearing now will be in recess.
        [Recess.]
        Chairman REICHERT. The subcommittee will come to order,
    please.
        So thank you for your patience.
        We will begin questioning again, and we will recognize Mr.
    Renacci for 5 minutes.
        Mr. RENACCI. Thank you, Mr. Chairman.
        I want to thank the witnesses for your testimony.
        Ms. Randolph, I want to congratulate you for what you have
    been able to do. I think that is one of the positives of these
    programs, and we need to have more of those. So,
    congratulations.
        It is interesting because, in my previous history, I used
    to always have staff come up to me and say, well, the more
    money we spend, the better off we will be. And I used to try
    and tell them that there comes a time when the more money you
    spend sometimes, you are just wasting it.
        And I think what we really need to do is make sure that the
    programs that we are spending money on, that the return is
    there and that we are getting people back to work. That has to
    be the key, just like Ms. Randolph was able to do. Those are
    the keys to these type of programs.
        Mr. Mead, I want to direct a question to you. In December
    of 2011, approximately 193,000 individuals received TANF
    benefits in my home State of Ohio. Although shocking to me at
    first, this number was small in comparison to the 2 million
    individuals receiving SNAP benefits.
        In your testimony, you mentioned that other programs could
    benefit from similar work tests used in the TANF program. Can
    you tell us more about some of the benefits of a work-first
    approach to our welfare system, just a little more in detail?
    Because I think that is the direction we should go in.
        Mr. MEAD. In order to get welfare recipients to work, you
    have to have an administrative structure where you say to them
    that they must work and you arrange it. You help them get it
    together by arranging child care, finding a job, actually
    working, staying at the job, et cetera. It has to be mandatory,
    it has to be a condition of eligibility that they do this.
        And it is not as if--I am not suggesting they don't want to
    work. They do. But, typically, they have to get organized to
    actually do it. And so you need to have a program structure
    that brings that about.
        We have that structure in TANF, but we don't have it in
    food stamps. That is the big difference. In food stamps, there
    are formal requirements on the books, but we don't actually
    have a program standing behind it. We don't actually have in
    most localities--there are some exceptions --but we don't have
    an actual program on the ground where people are faced with an
    operational requirement to do something. That is the big
    difference. And we need to move that way in SNAP.
        Mr. RENACCI. Sir, do you believe that we are providing the
    real help necessary to get to that point? Or, do we have to
    revise the system?
        Mr. MEAD. I think we have to revise SNAP to provide a
    program structure like what we have in TANF. Now, I don't mean
    the rules would be identically the same. Food stamps covers a
    wider population, with many different types of families. We
    have to think seriously about who exactly would have to work
    and how much and so on. So there are issues there that you
    wouldn't face in TANF.
        But we need to do that, we need to set up a structure. That
    is what is now missing. And then you can combine practical
    help, which people need and I am in favor of, like the benefit,
    with a requirement that people also help themselves. So you
    have this joint effort where the government and the recipient
    together work on going to work.
        Mr. RENACCI. Ms. Tiller, if you speak to those out of work,
    most will tell you they want a chance to earn more money, help
    their family, improve their situation in life. Getting
    individuals back to work really must remain the goal of the
    public assistance programs.
        You have assisted a variety of individuals in your
    organization. Do you come across individuals who are not
    willing to work?
        Ms. TILLER. Of course we do, but it is all about rebuilding
    confidence and making folks more self-aware and then helping
    them with the tools to get them to a point of employability.
        Mr. RENACCI. What are some of the things your organization
    does to help people realize the benefits that they can gain
    from working?
        Ms. TILLER. We show them mathematically that work pays; it
    pays more than receiving TANF benefits. We do countless
    trainings that focus on rebuilding their self-awareness,
    including talking about family structure. Then, also, pre-
    employment initiatives: resume building, confidence building,
    presentation, aesthetic presentation, things of that nature.
        Mr. RENACCI. Ms. Randolph, your goal, it sounds like, and I
    just want to confirm that, was really to get back to work. You
    wanted to get to work.
        Ms. RANDOLPH. Yes.
        Mr. RENACCI. So you were just looking really for the tools
    to help you move in that direction and be able to find a job
    and find employment for yourself and your child; is that
    correct?
        Ms. RANDOLPH. Yes.
        Mr. RENACCI. Very good.
        Thank you, Mr. Chairman. I yield back.
        Chairman REICHERT. Thank you.
        Mr. Reed, you are recognized.
        Mr. REED. Thank you, Mr. Chairman.
        And thank you to the panel.
        I am very interested in having a conversation this
    afternoon about an issue that is very important to me, and that
    is to focus on the working poor.
        Because, to me--and, Mr. Rodriguez, you kind of talked
    about it a little bit in the phaseout situation--is that we
    have policies now, in my opinion, at the Federal level that
    don't reward the people that are going to work, the ones who we
    want to stand with that are pulling themselves out of the
    turmoil that we all agree that we want to address here from
    Washington.
        So, Ms. Tiller, from your experience, what are the barriers
    to re-employment that you come across on a regular basis?
        Ms. TILLER. Some of the barriers include limited
    experience, limited education, limited knowledge of current
    events. So we work to work with our participants to make sure
    that they are trained in pre-employment initiatives to get back
    to work, and then we address additional education and whatnot.
        Mr. REED. So are we talking about, when you say education,
    are we talking about, like, skill sets----
        Ms. TILLER. Uh-huh.
        Mr. REED [continuing]. Workforce development----
        Ms. TILLER. Soft skills, hard skills, yes.
        Mr. REED. Soft skills and hard skills. Now, when you say
    that--because I have heard that numerous times, and I am
    interested in getting it on the record--soft skills, what are
    you referring to?
        Ms. TILLER. Presentation, how you articulate. Also, your
    overall being, your self-awareness. That is what I would
    consider soft skills. Your communication skills, are you
    organized.
        Mr. REED. And when you say that, have you ever asked anyone
    that you have come across in your experience in that situation
    where you are helping them develop those skills why they didn't
    have those skills to begin with?
        Ms. TILLER. Sure.
        Mr. REED. And why was that? What was their response?
        Ms. TILLER. A variety of reasons. Household composition,
    limited education.
        Mr. REED. Okay, household composition, limited education.
    That is a nice D.C. term. What do you mean by that?
        Ms. TILLER. How they grew up.
        Mr. REED. How they grew up, their home environment.
        Ms. TILLER. Yup, what their family structure was like.
        Mr. REED. Okay. And then have you ever come across folks
    that maybe have a drug problem or an alcohol problem?
        Ms. TILLER. Uh-huh.
        Mr. REED. Is that something--if you could verbally state
    for the record that you have?
        Ms. TILLER. Yes, we have.
        Mr. REED. And is that something that is a big issue, or is
    that a relatively small, insignificant issue, in your
    experience dealing with----
        Ms. TILLER. Well, it is an issue. Again, we look at work as
    the central activity, and then we focus on all of the other
    barriers that need addressing. And we make sure to warmly refer
    participants to the appropriate services so that they get
    complete wraparound services.
        Mr. REED. And just so I have a sense for the record, is
    that something that you occasionally come across or is that
    something that you regularly come across?
        Ms. TILLER. Regularly.
        Mr. REED. Regularly.
        Ms. TILLER. Uh-huh.
        Mr. REED. Because I am finding that, talking to my work
    force development directors and others in the district and to
    employers, that that is a real issue to re-employment. And so I
    am glad to hear that verified by you here today.
        Ms. Randolph, I want to talk about--your story is really--
    you know, we could spend a lot of time with the experts here,
    but your story is really something I want to explore.
        Clearly, you are setting an example. You are out there
    doing it right. How does what you do impact your son? Could you
    state that for the record?
        Ms. RANDOLPH. It impacts him greatly. I want to set an
    example for him to show him that the sky is the limit. He can
    do anything he puts his mind to.
        Mr. REED. And have you had a conversation with him along
    those lines, or is it----
        Ms. RANDOLPH. Yeah. Well, not----
        Mr. REED [continuing]. Just, not do what I say, but do what
    I do?
        Ms. RANDOLPH[continuing]. Not quite because he is only two.
        Mr. REED. Okay.
        Ms. RANDOLPH. So we haven't got there yet. We haven't got
    there yet.
        Mr. REED. Well, I would tell you, you know, I am the father
    of a 12- and 14-year-old, and I can tell you--and I am the
    youngest of 12, so I have 11 other older brothers and sisters.
    And I can tell you that I remember the adage, it is only about
    2 percent of what your parents say that you do; it is what they
    do that you incorporate and become.
        And, Ms. Tiller, you talked about it on household
    composition and being reflected in the next generation that is
    coming down.
        And, Ms. Randolph, could you describe your household
    composition when you were growing up?
        Ms. RANDOLPH. Well, I grew up in a single-parent home with
    just my mom. I had my dad in my life, but it wasn't a marriage
    or a two-parent home.
        I grew up kind of rough, but I always knew that education,
    and keep pushing, that I will be okay, I will be fine. So I
    never let my surroundings discourage me or turn me around from
    what I wanted to do and the dreams that I wanted to come true.
        Mr. REED. And who taught you that education was key?
        Ms. RANDOLPH. My mom.
        Mr. REED. That is what my mom taught me.
        Ms. RANDOLPH. Yes.
        Mr. REED. She was a single mother after my father passed
    when I was 2. And she taught that lesson to me very, very
    directly. So I appreciate that.
        Because that is an issue, I think, that gets lost in our
    conversation. We talk a lot about the benefits and the cash
    that we could give to individuals, but we are not talking about
    the cycle of dependency, the cycle of poverty, and how you
    break that.
        And I am very interested in--and, Ms. Randolph, I applaud
    you because you are setting an example for that 2-year-old that
    I can assure you, in my humble opinion, will pay huge dividends
    not only for him but his kids and your grandkids. So God bless
    you. Keep up the great work.
        And, with that, I yield back.
        Ms. RANDOLPH. Thank you.
        Chairman REICHERT. Thank you, Mr. Reed.
        Mr. Davis, you are recognized.
        Mr. DAVIS. Thank you very much, Mr. Chairman.
        And I want to thank all of our witnesses for being here
    this afternoon.
        Ms. Randolph, let me congratulate you for the progress that
    you have made. It seems to me that I know thousands of
    individuals like yourself. I have lived and worked in the inner
    city of Chicago all of my adult life, and so I have seen
    individuals.
        Do you have friends and family Members, perhaps, who had
    similar experiences and are having similar success to yours?
        Ms. RANDOLPH. No.
        Mr. DAVIS. No?
        Ms. RANDOLPH. No.
        Mr. DAVIS. Ms. Tiller, let me ask you, do you know other
    agencies and organizations that are having the kind of success
    that you are having with your programs?
        Ms. TILLER. I can only speak to America Works.
        Mr. DAVIS. So you don't check other programs and how
    effective they are or read literature about what they do?
        Ms. TILLER. Sure, I read about them. I know of others in
    existence. But today I am only speaking to America Works.
        Mr. DAVIS. Okay.
        Mr. Kling, I note that spending for the kind of programs
    that we are talking about has increased tremendously over the
    years. Are there any societal conditions that may have spurred
    some of this? Or do we see any results, like a difference
    perhaps in life expectancy since 1972, since much of this has
    gone to health care?
        Mr. KLING. There are some important societal trends.
    Population growth is a big driver of why the number of
    participants has gone up in many programs. In the healthcare
    programs, there is a general rise in healthcare costs per
    participant that affects the Medicaid program that reflects a
    societal trend, yes, sir.
        Mr. DAVIS. And I note that in some communities, especially
    where there have been certain kinds of programs, that the
    infant mortality rates, for example, have been reduced--that
    is, that people not only live perhaps longer but they live a
    bit better. And so I am thinking that some of that might be
    accounted for as a result of the increased expenditures.
        Dr. Mulligan, let me thank you for being here. You come
    from one of my favorite, most favorite institutions. One of the
    things I bemoan a little bit sometimes is that the University
    of Chicago is not in my congressional district, although I have
    a large number of other colleges and universities, but not the
    University of Chicago.
        Let me ask you if you have observed the impact of the
    availability of work opportunities on whether or not people are
    employed. Or what does opportunity have to do with unemployment
    in some settings?
        Mr. MULLIGAN. Maybe a good way to answer your question
    would be the Figure 1 in my testimony, where I view the reward
    to work as a comparison between what you can get when you are
    not working and what you get when you are working.
        And I think what you meant by ``opportunity'' is what would
    happen if you could get more while working, if you could get a
    better job or a more high-paying job. And that increases the
    reward. And, on average--not every single individual responds
    this way, but, on average, when people have a bigger reward,
    they respond to it by working more. That is fairly clear as an
    average proposition.
        Mr. DAVIS. On the availability of work, in my mind, I am
    reminded that when I came to Chicago and the community that I
    live in, there were solidly good-paying manufacturing jobs all
    over the place. I can name at least 20 major corporations and
    companies that were located there. And so the individuals in
    the community where I lived basically had jobs. Hotpoint,
    Motorola, General Electric, International Harvester, Sears--you
    name it, they were there.
        And so my question really was about the impact of job
    availability. I see that my time has expired, Mr. Chairman,
    so----
        Chairman REICHERT. Thank you.
        Mr. Kelly is recognized.
        Mr. KELLY. Thank you, Chairman.
        And thank you all for being here.
        I think, Ms. Randolph, what you said was probably the most
    important thing. And I know that you are actually the person
    doing these things. You have actually been through it, you have
    been through the programs. Because I think what Ms. Tiller
    did--when you said, they gave me confidence, I think that is
    the key to it. I can't imagine waking up in the morning and
    having no reason to get out of bed.
        Now, I know we come up with programs, and they are well-
    intentioned. But when you disincentivize people to go after
    something, when you take away their hopes and dreams, you are
    kind of reinforcing that we are going to give you enough money
    to stay where you are.
        These programs were not designed to keep people in poverty.
    They were designed to lift them out of poverty. The skills that
    you learned, though, gave you the confidence to go in and apply
    for a job.
        The town that I am in now has seen heavy, heavy
    unemployment. And I have young people coming up to me all the
    time saying, you know, ``Mr. Kelly, are there any jobs that you
    know about?'' I say, ``Go to the work force people. Talk to
    them.'' ``I don't know how to do those jobs that are
    available.''
        So you wonder about what are we doing with folks, because
    if the idea is to help them, give them a bridge from where they
    are to where they want to be, that works. I mean, that is what
    worked for you. I can see it in your eyes. You are a confident
    young lady. You said, ``I knew I was a smart girl.'' And so you
    had the confidence, but then they helped you build it so you
    could go when you were seeking a job and speak with confidence
    and get the job. And that is really--I mean, you are doing it.
        How many more people would you say fall in that category
    but they just don't have that confidence yet to go out and look
    for a job or to interview for a job? Either one of you, because
    you are both working with great numbers of people. You created
    350,000 jobs, or at least got people jobs, right?
        Ms. TILLER. Uh-huh.
        Mr. KELLY. Okay.
        Ms. TILLER. So, thousands. Thousands per month in offices
    nationwide.
        Mr. KELLY. Okay. All right.
        See, I get the confusion, because sometimes we think, well,
    you know what, our hearts are willing, but sometimes our
    wallets are weak. And we talk about how we want to help people,
    but then we say there is only so much we can do. See, I don't
    believe for 1 minute by disincentivizing people that you are
    helping them. I don't want to give people enough money to stay
    where they are. I want to give them an opportunity to dream
    again.
        Mr. Mead, availability of jobs. Are there not enough jobs
    out there for folks? Or where are we with that?
        Mr. MEAD. There is no definitive proof, but I would say
    jobs of a low-skilled, low-paid variety are widely available in
    America today. The indications are that low-income people can
    get jobs quickly. The problem is more keeping the jobs. Their
    problem is far more obtaining an adequate wage to enter the
    middle class.
        That has been true for decades. This is not a new problem.
    But the major difficulty, though, for this group is not that
    they are working at low wages. Two-thirds of the poor didn't
    work at all in last year. And it isn't because they can't get a
    job. It is that they are doing other things. Their lives are
    preoccupied with other concerns.
        They are not saying in survey studies that I can't get a
    job. Only 12 percent of the nonworking poor adults in 2011--or
    2012--no, well, but the latest year, anyway--12 percent say
    that the reason is they can't find a job. Vastly more important
    are concerns in private life. They are retired or taking care
    of the family, they are ill, they are in school. Those are much
    more important.
        So people are not saying they can't get a job.
        Mr. KELLY. Okay.
        Now, going back to Ms. Randolph, okay, you have a little
    boy?
        Ms. RANDOLPH. Yes.
        Mr. KELLY. All right. Two years old?
        Ms. RANDOLPH. Yes.
        Mr. KELLY. See, when I was growing up--I mean, the central
    part of who we are as a people has always been the family. It
    has always been centered around the family, the family unit,
    the ability of the mother and father to work together to
    provide a future for their children, to provide wellbeing for
    them.
        And I look at some of these programs and I am saying, well,
    why are we telling people that, you know what, if you are
    married, we are going to penalize you for being married? It
    seems to me like we don't reward good behavior, but we make
    people think about, well, maybe it is better if I am not
    married, I can benefit more from not being married. I would
    just say maybe short term but not long term.
        Ms. RANDOLPH. Uh-huh.
        Mr. KELLY. I heard you talk about your family and the way
    your family was structured. So, I mean, you all see it every
    day.
        Ms. RANDOLPH. Yes.
        Mr. KELLY. We see it in this country. As our families
    continue to crumble, as we don't have that family nucleus, we
    lose what it is that is uniquely American, and that is to
    provide for those coming after us with a great deal of heart
    and a great deal of passion.
        Is that not happening? I can't believe the numbers that we
    are looking at now of unmarried people with children. It is a
    tough row to hoe even when you are married, but unmarried?
    Unless you incentivize it.
        Could we change it? Would that help?
        Mr. MEAD. I don't believe, as I have said, that incentives
    are the core problem. The core problem is the lack of a
    structure that promotes and enforces work connected to these
    welfare programs. We need to have a program in which there are
    case managers who make sure that those who want to work
    actually do it and help them sort out the problems and so on.
        It is not going to happen automatically, and it is not
    going to happen in response to incentives. Incentives are, I
    believe, a distraction from the main difficulties, which are
    actually administrative.
        We need to do with food stamps and these other programs
    what we have already done with TANF. Set up a structure where,
    if you get support, you are reliably required also to work. We
    have to do that. And when we do that, we will see results.
        Mr. KELLY. Getting up with a purpose every morning is the
    key to it. You have to have that, whether it is that 2-year-old
    little boy who is driving you or just wanting to be part of a
    society that continues to make things better for those coming
    after us.
        I have used up my time. Thank you all for being here, and
    thank you so much for what you are doing.
        Congratulations. Keep up the good work.
        Chairman REICHERT. Mr. Crowley.
        Mr. CROWLEY. Thank you, Mr. Chairman.
        Ms. Randolph, it is a pleasure to have you here before us
    this afternoon, and congratulations to you on all your success.
    And I wish you nothing but more success in the years to come
    for you and your little boy and for your family, your overall
    family.
        I just have a couple of questions for you, though, if I
    could, just to get a better sense of your situation and how we
    can apply that to others.
        Ms. RANDOLPH. Okay.
        Mr. CROWLEY. When you were moving into your position last
    year, you apparently were aware of the Earned Income Tax
    Credit; is that correct?
        Ms. RANDOLPH. Yes.
        Mr. CROWLEY. And how did you find out about that?
        Ms. RANDOLPH. For the tax year? I found out about it once,
    I guess, I applied for my taxes.
        Mr. CROWLEY. Okay. So did your accountant tell you or did--
    --
        Ms. RANDOLPH. Yes.
        Mr. CROWLEY. So they told you. Did you receive any
    information about continuing medical coverage under Medicaid,
    if needed?
        Ms. RANDOLPH. Did I receive any information?
        Mr. CROWLEY. Yeah, that if you needed to continue health
    care, that you would have access to Medicaid if you needed it?
        Ms. RANDOLPH. Yes, I did.
        Mr. CROWLEY. And did you receive any explanation about
    getting any help with daycare expenses for your child?
        Ms. RANDOLPH. Yes.
        Mr. CROWLEY. Are you now receiving any of these supports
    like EITC or transitional Medicaid or childcare subsidies?
        Ms. RANDOLPH. Yes.
        Mr. CROWLEY. You are receiving those subsidies.
        Ms. RANDOLPH. Yes.
        Mr. CROWLEY. Thank you.
        Ms. Tiller, when one of your clients leaves the TANF
    program for a full-time job but receives assistance with child
    care or transitional Medicaid or, in fact, gets EITC, do you
    think of that person as a welfare recipient or as a worker?
        Ms. TILLER. As a worker.
        Mr. CROWLEY. As a worker.
        Ms. TILLER. Uh-huh.
        Mr. CROWLEY. I appreciate your response because I think
    that gets, in part, to the crux of what we are talking about
    here, those who would imply that EITC or even on transitional
    Medicaid or receiving even childcare subsidies so that they can
    work and their child can be in an enriching environment, that
    that is a form of welfare. Some on this Committee believe that
    that is another form of welfare.
        I don't believe so, Ms. Randolph. I think what you are
    doing is more than admirable; it is heroic. It is heroic, what
    you are doing. And I hope that there are millions more like you
    out in the world. It is what makes America great. So thank you.
        Ms. RANDOLPH. Thank you.
        Mr. CROWLEY. Mr. Rodriguez, in your testimony, you
    mentioned some of the benefits of EITC, including long-term
    gains in education and earnings by recipients.
        Can you elaborate a bit more on the broader economic
    benefits of the EITC program and other tax credits for working
    families? When families receive these credits, what impact does
    their resulting spending have on our overall economy?
        Mr. RODRIGUEZ. Yeah, sure. Thank you.
        I mean, I think there are, as I mentioned, some really good
    studies out there that really show, not to mention the
    anecdotal evidence of people who are working directly with
    families to get tax credits each year, it pumps millions of
    dollars, billions of dollars into the economy, millions of
    dollars into local economies; as well, these help families to
    certainly pay off bills but also do employment-related things
    like buy cars that take them to work and pay for other
    transportation, childcare costs, other kinds of things that I
    think have tremendous employment effects, as well.
        And I think the research that we cited around long-term
    effects on families and kids in families who are receiving the
    tax credits I think stands for itself.
        Mr. CROWLEY. Thank you.
        So it seems that we are talking about programs that not
    only strengthen the individual but strengthen all of us, lift
    all boats, and also improves the overall economy of our
    country.
        I hope that the benefits of these valuable programs and the
    very real need for these resources are not overlooked in a rush
    to claim credit for cutting so-called ``welfare.'' Don't
    forget, our Constitution has in it to provide for the general
    welfare. When did the word ``welfare'' become so maligned? When
    did it become a negative and a pejorative, as opposed to
    something positive, as apparently our Founding Fathers had
    thought so when they included that line in the preamble of our
    Constitution?
        I particularly want to thank Ms. Tiller for your comments
    when I asked the question about whether you thought that those
    programs, as applied to Ms. Randolph, were for welfare and you
    said they were not. And I think that is a very honest answer,
    and I appreciate that very much. Because I think it goes to the
    heart of what we are talking about here today, that these
    programs are not forms of welfare. They are helping lift people
    up who are struggling, who are working in this country and
    trying to make ends meet.
        That is what Ms. Randolph is doing every day. She is
    working in this company, this healthcare company. And I applaud
    her, and I applaud you for your forthright answer.
        Thank you. I yield back.
        Chairman REICHERT. I thank the gentleman.
        Thank all of you for being here today, and thanks for your
    patience as we left for a few minutes to vote.
        I would like to especially thank Ms. Randolph for her
    appearance here today. Sometimes Congress can be a little
    intimidating for any of us, but especially for someone who has
    not been here before.
        We are excited about your progress. People have mentioned
    that. You have been sort of the focal point. You are sitting in
    the center, and everyone is kind of drawn to you and your smile
    and your success.
        And, the Federal Government, I think we would all agree,
    does have a role in helping people get back on their feet. We
    must be there.
        And I hope that you continue to receive these benefits and
    you continue to move on in your life and look for promotions
    and not only buy your first car but end up buying your first
    home. And I can see you are already planning that, by nodding
    your head.
        So we are just honored to have you here and appreciate all
    the work that all of you in the panel have done. We want to get
    this right. We want to be able to be here as a help to people,
    but we want to have people like Ms. Randolph, who stand up,
    too, and take responsibility, who want to move forward with
    their lives.
        And the government is here to help you move forward. And
    maybe 1 day you might even work for the Federal Government and
    you can say to people, ``I am from the Federal Government, and
    I am here to help.'' Maybe not.
        Thank you all very much.
        The hearing is adjourned.
        [Whereupon, at 3:56 p.m., the subcommittee was adjourned.]
        [Submissions for the Record follow:]

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