[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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                      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:]
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                     ____________

    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:]
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                     ____________

    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:]
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                     ____________

    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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