[Senate Hearing 114-698]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-698

                   RENEWING COMMUNITIES AND PROVIDING
         OPPORTUNITIES THROUGH INNOVATIVE SOLUTIONS TO POVERTY

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

                               HEARING

                              BEFORE THE

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS


                             SECOND SESSION

                               __________

                             JUNE 22, 2016

                               __________

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin Chairman
JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska

                  Christopher R. Hixon, Staff Director
       Patrick J. Bailey, Chief Counsel for Governmental Affairs
              Joshua P. McLeod, Professional Staff Member
              Gabrielle A. Batkin, Minority Staff Director
           John P. Kilvington, Minority Deputy Staff Director
 Katherine C. Sybenga, Minority Chief Counsel for Governmental Affairs
              Portia R. Bamiduro, Minority Senior Counsel
 Lynn L. Sha, Minority Legislative Assistant, Office of Senator Carper
                     Laura W. Kilbride, Chief Clerk
                   Benjamin C. Grazda, Hearing Clerk
                           
                           
                           
                           C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Johnson..............................................     1
    Senator Carper...............................................     3
    Senator Ernst................................................    16
    Senator Tester...............................................    20
    Senator Peters...............................................    26
    Senator Lankford.............................................    31
Prepared statements:
    Senator Johnson..............................................    45
    Senator Carper...............................................    47

                                WITNESS
                        Wednesday, June 22, 2016

Robert L. Woodson Sr., Founder and President, Center for 
  Neighborhood Enterprise........................................     6
Peter L. Ochs, President, Capital II, Inc........................     7
Ron Haskins, Ph.D., Senior Fellow, Brookings Institute...........     9
Olivia Golden, Executive Director, Center for Law and Social 
  Policy.........................................................    11

                     Alphabetical List of Witnesses

Golden, Olivia:
    Testimony....................................................    11
    Prepared statement...........................................    67
Haskins, Ron:
    Testimony....................................................     9
    Prepared statement...........................................    56
Ochs, Peter L.:
    Testimony....................................................     7
    Prepared statement...........................................    53
Woodson, Robert L. Sr.:
    Testimony....................................................     6
    Prepared statement...........................................    48

                                APPENDIX

Chart referenced by Mr. Haskins..................................    57
Charts referenced by Mr. Haskins.................................    61
Chart referenced by Senator Johnson..............................    87
Chart referenced by Senator Johnson..............................    88
Chart referenced by Senator Johnson..............................    89
Responses to post-hearing questions for the Record
    Mr. Woodson..................................................    90
    Mr. Haskins..................................................    94

 
                   RENEWING COMMUNITIES AND PROVIDING
                    OPPORTUNITIES THROUGH INNOVATIVE
                          SOLUTIONS TO POVERTY

                              ----------                              


                        WEDNESDAY, June 22, 2016

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:01 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Ron Johnson, 
Chairman of the Committee, presiding.
    Present: Senators Johnson, Lankford, Ayotte, Ernst, Sasse, 
Carper, McCaskill, Tester and Peters.

             OPENING STATEMENT OF CHAIRMAN JOHNSON

    Chairman Johnson. Good morning. This hearing will come to 
order.
    I want to thank all of the witnesses for taking the time to 
attend and for your thoughtful testimonies. I am looking 
forward to hearing them and looking forward to hearing your 
answers to our questions.
    The mission statement of this Committee is relatively 
simple: to enhance the economic and national security of 
America. I believe they are inextricably linked. My approach to 
solving problems is always to look for the areas of agreement. 
And, based on the subject matter of this hearing, I think it 
is, probably, good to start with an area of agreement.
    I do not care where you fall on the political spectrum, as 
Americans, we share the same goal. We all want a safe, 
prosperous, and secure America. We are concerned about each 
other. No political party has a monopoly on compassion. We all 
want all of our fellow citizens to succeed and to have the 
opportunity to build a good life for themselves and their 
families.
    So, I mean, I would like to start there, because it is 
true. And, if you start and you look for areas of agreement, it 
is just a whole lot easier to find common ground on the areas 
of disagreement. And, we might find a few of those areas as we 
get into the testimonies.
    The other thing that is pretty much inherent in somebody, 
like myself, who comes from a manufacturing background--I solve 
an awful lot of problems--I understand the problem-solving 
process. You never solve a problem until you, first, properly 
identify it, properly define it, understand the reality, and 
admit you have the problem.
    So, I was hoping to have a couple of easels here to display 
them, but I do have a couple of graphs. I just want to start 
there. But, let us look at the reality and ask ourselves some 
questions.
    The first one is the number of Americans in poverty. And, 
as a government, we started measuring poverty in, I think, 
1959. And, you can see that, based on this graph\1\, when we 
first started measuring it, we had about 39.5 million Americans 
in poverty and the poverty rate was 22.4 percent. And, you can 
see the number of people in poverty--and the poverty rate--was 
falling, quite precipitously, through the early 1960s, because 
we had a booming economy. We had the ``Baby Boomer'' generation 
growing up after World War II and things in America were 
looking up. But, still, we are a compassionate society. The 
poverty rate--the number of people in poverty--was still too 
high, so, collectively, we decided to embark on a--and I know 
these numbers are, somewhat, subject to dispute--exactly what 
the numbers are--but, somewhere in 
the--in nominal dollars--$13 trillion to $19 trillion or $20 
trillion ``War on Poverty''.
---------------------------------------------------------------------------
    \1\ The chart referenced by Senator Johnson appears in the Appendix 
on page 87.
---------------------------------------------------------------------------
    Now, I think you have to ask yourself a question. I mean, 
did it work? We started passing some of the means-tested 
programs in about 1964 and continued to pass a piece of 
legislation in 1965 and 1966. Back then, in today's dollars, we 
were spending somewhere around $30 billion, per year, on some 
of those programs. We, basically, doubled that spending, 
starting in about 1966, after all of these programs were 
passed.
    I just want to refer people to the next chart\2\, because I 
think this shows--and, again, this is just the reality of what 
has happened since we embarked on a--again, whatever that 
number is--$13 trillion to $19 trillion or $20 trillion ``War 
on Poverty''. Basically, you can see that the number of people 
in poverty went from about 29.5 million people--we are up to 
about 47 million people. But, I realize the population has 
increased, so that is probably not the best measure. So, what 
about the poverty rate? Well, you can see that that has pretty 
much flatlined around the 15-percent level. We are a little 
under 15 percent, right now, today.
---------------------------------------------------------------------------
    \2\ The chart referenced by Senator Johnson appears in the Appendix 
on page 88.
---------------------------------------------------------------------------
    Now, I realize there is some dispute, in terms of how you 
actually measure poverty. Do you put, on top of what people 
earn, the welfare payments? Obviously, welfare payments, in 
terms of total income, pull people above that poverty line. 
But, from my standpoint--I thought the goal of the ``War on 
Poverty'' was to get people out of poverty on their own--
working and basically earning their own success. And, of 
course, those people that cannot help themselves--people that 
are never going to be able to make it on their own--obviously, 
we want to continue to help those folks to live a good life. 
So, again, those are just sort of the basic facts.
    And, the other line I want to point out here is the--and, 
this is, actually, Daniel Patrick Moynihan who started pointing 
this out. I know, as a social scientist, he started talking 
about out-of-wedlock birth rates in the mid-1960s. He paid kind 
of a heavy professional price for doing so, but he noted that 
the out-of-wedlock birth rate had gone from 4 percent to 8 
percent.
    He was alarmed by it, because--if you are concerned about 
poverty--it is true that, if you have an intact family, you 
have a far lower probability of being in poverty than someone 
struggling as a single parent trying to take care of their 
kids. And, that is not a value judgment on single-parent 
families--just, as it relates to poverty, you are going to have 
a lower probability of being in poverty if you have an intact 
family. Since the ``War on Poverty'' 
began--now, I think--last year, I think, we were up to 40.6 
percent of births occurring out of wedlock. I do not think that 
is a positive metric of success.
    So, again, with kind of that basis--I think those are 
pretty indisputable numbers. The causes and the results will 
probably be disputed, but that is really the purpose of this 
hearing: to try and lay out some realities and to try and agree 
on as much as we possibly can. And, again, I will go back to 
that goal. We all want a safe, prosperous, and secure America. 
We are concerned about each other. We want to help people that 
cannot help themselves. We want to help people to help 
themselves. We are a compassionate society.
    And, with that, I will turn it over to Senator Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thank you, Mr. Chairman. Thank you very 
much for holding this hearing today.
    It is great to see some of you again. Dr. Haskins, it is 
great to see you, Ron--and Olivia Golden as well. And, Peter 
Ochs, we welcome you here. And, Mr. Woodson, you are great to 
join us. And, thank you all for your work in these vineyards.
    Ron Haskins and I had a chance to work together pretty 
closely, back in the 1990s, during the Clinton Administration--
and along with the then-Governor from Wisconsin, Tommy 
Thompson, who was also Chairman of the National Governors 
Association (NGA). I was one of his successors. And, he and I 
worked closely together on welfare reform then, along with a 
guy named John Engler, who was the Governor of Michigan at the 
time.
    President Clinton used to say that work should pay more 
than welfare. People would be better off going to work than 
staying on welfare. And, if you think about what folks faced, 
prior to our welfare reform initiatives in the 1990s, the 
smart, rational decision for a lot of people was to stay on 
welfare. And, if you think about it, you go to work, what do 
you gain? You gain the right to pay taxes. You gain the right 
to pay for your health care. You probably lose Medicaid and you 
probably have to figure out how to pay for health care for 
yourself and your kids. You have to worry about 
transportation--how to get to work. You have to figure out that 
childcare and pay for that as well.
    And so, we pretty much had a system that encouraged people 
to get on welfare and to stay on welfare--and a lot of people 
did 
that. And, what we tried to do in my State--and in 49 other 
States--was to ensure that people were better off by going to 
work.
    And, in my State--in Delaware--we were given the 
opportunity to experiment, broadly. And, we did. We created a 
Family 
Services Cabinet Council, which involved a lot of members of my 
cabinet--one of whom, Carmen Nazario, was later stolen by 
Olivia Golden to go to work for her.
    But, we started--before children were born--a statewide 
campaign on teenage pregnancy. We placed a huge focus on 
parenting training--starting in hospitals--literally, where 
babies were born, before moms went home with their children--
and, hopefully, with dads. We had parenting training in our 
prisons. We found 
out--along with the late George Voinovich, who just died last 
week and who served on this Committee. George and I found out 
that about half of the kids in our States--in the country, 
actually--who were eligible for Head Start were not being 
funded by Head Start. So, we used State money to fully fund 
eligible 4-year-olds for Head Start.
    There was a big push for mentoring programs--all kinds of 
things that we did. And, we also changed Medicaid eligibility, 
so that, when people would go to work, they would not lose 
their Medicaid eligibility right away. The Earned Income Tax 
Credit (EITC)--one of the best anti-poverty programs, I think, 
we have ever had. States have introduced their own version of 
that to, again, make sure that work pays more than welfare.
    But, the idea there was to change the incentives. It helped 
to launch welfare reform in the midst of, maybe, one of the two 
longest economic recoveries in the history of our country. And, 
we raised the minimum wage during that period of time, because 
we wanted work to pay more than welfare.
    I think I may have mentioned we--I know, Peter, you have 
done a lot of work in prisons. And, I had a huge interest in 
corrections. I still do. And, we did all kinds of things, in 
our prisons, to better ensure that, when the guys and gals--
inmates came out of prison, they were better parents--not just 
better criminals. So, those are some of the things that we 
worked on at the State level.
    Not everybody likes the Affordable Care Act (ACA). One of 
the things that I like about the Affordable Care Act--among 
others--is that, when people actually do go to work and get off 
of welfare, they have health care. They do not give up their 
health care. It is a big deal. It is a really big deal. And, 
they can sign up for Medicaid. And, if their income rises over 
135 percent of the poverty line, they can sign up and 
participate in the exchanges in their State. So, the deal here 
is try to use some common sense and to use our hearts at the 
same time.
    And, I will close with this. There is a verse of scripture 
that I quote in here from time to time. The Chairman has heard 
it a number of times. And, it is Matthew 25: ``When I was 
hungry, did you feed me? When I was naked, did you clothe me? 
When I was thirsty, did you give me to drink? When I was a 
stranger in your land, did you take me in? ''
    And, I think we have a moral imperative--whatever our faith 
is--to the least of these in our society. But, given the fact 
that we still have a big budget deficit, we have a fiscal 
imperative to meet that moral imperative in a fiscally 
responsible way. And, that is what we are trying to do. And, 
this is a shared partnership--not just the Federal Government, 
not just the States, not just the faith community, and not just 
nonprofits. It is all of us, including the people, themselves, 
who are on welfare and want to be able to become self-
supporting and self-sustaining.
    President Obama is going to sign into law, legislation, at 
11:15 this morning, that the White House and I worked on for 
the last 4 years: the Frank R. Lautenberg Chemical Safety for 
the 21st Century Act, which amends the Toxic Substance Control 
Act of 1976 (TSCA). He was kind enough to ask me to come and to 
be there for the signing ceremony. And, I am asked to choose 
between two of my favorite children: that legislation, which I 
cared about and worked hard on--along with a bunch of my 
colleagues--and the subject here, which I have been focused on 
for years. And so, I wanted to start my morning with you.
    I thank you very much, Mr. Chairman, for giving me a chance 
to say a few things. And, we look forward to hearing from you 
and, probably, to communicating with you later on. God bless 
you all and thank you all for joining us.
    Chairman Johnson. Thank you, Senator Carper. My guess is 
that we both have written statements\1\ we would like to enter 
into the record. Without objection, do you want to----
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Johnson appears in the 
Appendix on page 45.
---------------------------------------------------------------------------
    Senator Carper. Let us do it\2\.
---------------------------------------------------------------------------
    \2\ The prepared statement of Senator Carper appears in the 
Appendix on page 47.
---------------------------------------------------------------------------
    Chairman Johnson. There we go.
    It is the tradition of this Committee to swear in 
witnesses, so if you would all rise and raise your right hand.
    Do you swear the testimony you will give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Mr. Woodson. I do.
    Mr. Ochs. I do.
    Mr. Haskins. I do.
    Ms. Golden. I do.
    Chairman Johnson. Please be seated.
    Our first witness is Robert Woodson. And, I do have to 
point out I have a bunch of these books that I am happy to give 
to all of the Senators. This is a wonderful book. It is called 
``The Triumphs of Joseph''. In it, Mr. Woodson describes a 
number of community-based organizations (CBOs)--often faith-
based--that were started by people who found redemption, turned 
their lives around, and 
then, turned their own personal redemption into helping other 
people--one person at a time.
    So, since I met you in a Senate Budget Committee hearing--
was that about 4 or 5 years ago?--Mr. Woodson was kind enough 
to give me a book. Now, it has paid off dividends, because I 
bought hundreds of these things and I keep handing them out. 
But, I really recommend all of the Senators to pick one up. 
And, I will give it to the other witnesses as well.
    But, Robert Woodson is Founder and President of the Center 
for Neighborhood Enterprise. Mr. Woodson has dedicated his life 
to helping low-income people address the problems of their 
communities. For more than four decades, he has promoted the 
principles of self-help and neighborhood empowerment as well as 
the importance of the institutions of civil society. Mr. 
Woodson.

 TESTIMONY OF ROBERT WOODSON,\1\ FOUNDER AND PRESIDENT, CENTER 
                  FOR NEIGHBORHOOD ENTERPRISE

    Mr. Woodson. Thank you, Senator, for the opportunity to 
address this Committee. I come to you, with my testimony, as 
someone who has worked as a civil rights activist. And, also I 
have worked as a corrections officer (CO) and as a trained 
social worker in the poverty industry. So, my experience is 
first-hand.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Woodson appears in the Appendix 
on page 48.
---------------------------------------------------------------------------
    The fact is, we have spent $22 trillion, in the past 50 
years, on programs to aid the poor. And, 70 cents of every 
dollar goes, not to the poor, but to those who serve poor 
people. And, they ask, not which problems are solvable, but 
which ones are fundable. So, with our structural disincentives 
for people to move out of poverty, we have created a commodity 
out of poor people. To fund the solution, therefore, we must, 
first of all, diagnose the problem properly. You cannot 
generalize all poor people. There are four categories of poor 
people.
    There are those who are just broke--those whose character 
is intact. They have lost a breadwinner or a factory has moved 
out 
of town. People like that use the welfare system as it was 
intended--as an ambulance service, not a transportation system.
    Category two are people whose character is intact, but they 
look at the perverse incentives for achieving. Once they do, 
they will lose benefits. And so, they conclude that the numbers 
do not work. And, they stay on welfare.
    Category three are people who are either physically or 
mentally impaired. They need help.
    Category four are people who are morally and spiritually 
impoverished and, therefore, require some special intervention.
    The problem is, people on the left tend to look at all poor 
people as if they are category one, while people on the right 
tend to look at them as if they are all category four. And so, 
we miss each other. It is important for us to understand the 
problem and the type of poverty we are addressing.
    The group of people that concerns society most and are the 
most costly to us, is people in category four. And, these are 
the people that are the subject of my organization's efforts. 
We specialize in helping to promote transformation. If you just 
try to apply programs or give money directly to people who have 
some moral failings, you injure them with the helping hand.
    It is important, therefore, to look at an alternative way 
to help people in category four. But, we cannot find solutions 
for them by turning to our universities or professionals, who 
parachute in the programs they desire. The solutions are found 
in the community suffering the problem.
    At the Center for Neighborhood Enterprise, we do not do 
what the poverty industry does. They engage in what I call 
``failure studies''--or needs assessments. If you study 
failure, all you can produce is failure. So, we go into high-
crime, low-income neighborhoods and we identify the real anti-
poverty warriors.
    One is the mom that lives in public housing, has 5 
children, and was abandoned by her husband, at age 23, to rely 
on welfare. She gets off of welfare and then sends all five 
kids to college. Another, is the mom who has two children and 
sleeps in cars and in homeless shelters--yet her two girls 
graduate valedictorian and salutatorian and go on to succeed. 
Another, is Kurt Moore, a man who spent 13 years in prison, but 
came out, came to Christ, and then, started a small business, 
where he now employs 20 people in an auto detailing business.
    These are the real anti-poverty experts. Therefore, we must 
go into those neighborhoods and look for the anti-poverty 
experts, by exploring the capacities of poor people. And, once 
we find these experts, it is important to bring them to the 
table and to find out, from them, the source of their ability 
to achieve against the odds. And then, we must find what 
policies promote the expansion of these ``centers of moral 
excellence'', as opposed to always relying upon the advice of 
experts that never talk to the people suffering the problem.
    Chairman Johnson. Thank you, Dr. Woodson.
    Our next witness is Peter Ochs. Mr. Ochs is President of 
Capital III, Inc. and Seat King. In 2005, Capital III began 
utilizing inmate manufacturing labor from a State prison in 
Hutchinson, Kansas. His programs help foster economic, social, 
and spiritual capital, while teaching inmates a marketable 
skill.

  TESTIMONY OF PETER L. OCHS,\1\ PRESIDENT, CAPITAL III, INC.

    Mr. Ochs. Thank you. Thank you for being here.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Ochs appears in the Appendix on 
page 53.
---------------------------------------------------------------------------
    At the age of 40, I came to the realization that I was 
successful economically, but I was not satisfied with life. 
And, I think that was a result of not focusing on two other 
forms of capital: social and spiritual capital.
    I define social capital as those things that money cannot 
buy: great relationships, ambition, a goal in life, and the 
ability to live in harmony with your fellow man. Spiritual 
capital, as I define it, is just the moral code by which we 
live. It is ``love your neighbor as yourself,'' as it were. So, 
with this newfound ambition, 20 years ago, we changed the focus 
of our company from being just an economic enterprise to one 
with what we would call a ``triple bottom line'', where we 
create economic, social, and spiritual capital.
    So, in 2005, we had a manufacturing company, in a small 
Kansas town, that was growing rapidly. And, we simply could not 
find enough labor to supply that business with people, so we 
moved inside of a prison. And, it did not take me very long to 
understand--if I am honest with you, I moved into that prison 
simply for economic reasons, but, within a few months, I 
understood that the men that were incarcerated there were not 
much different than myself.
    And so, we took this opportunity to really put into 
practice the creation of economic, social, and spiritual 
capital. Let me define, briefly, for you, how we do that inside 
of the prison setting.
    If you are an inmate and work for the State of Kansas, you 
make 50 cents a day. If you work for us, you will make 
somewhere between $8 and $15 an hour--and that is set by the 
State of Kansas. In addition to the inmate winning, the State 
of Kansas wins. They take 25 percent of the gross salary for 
room and board. So, if you make $10 an hour as an inmate, the 
State of Kansas will take $2.50 for room and board. This year, 
our inmates will pay the State of Kansas more than $1 million 
in room and board. That is about 7 percent or 8 percent of the 
budget of that particular prison.
    The third entity that benefits is us. We get a steady, 
hardworking labor force that shows up on time every day. And, 
the last party to benefit is society, in itself. Restitution, 
child support, etc. comes out of their wage, if they owe that.
    So, that would be a summary of economic capital. Let me 
talk about social capital for just a moment.
    Inmates--we train them in welding, sewing, electronics, and 
computer-aided design. So, we have classes and they are 
learning those skills as they work for us.
    Family relationships are, probably, one of the greatest 
social capital benefits we have seen. It costs 17 cents a 
minute, if you are an inmate, to talk to your family. So, if 
you make 50 cents a day, you spend no time talking to your 
family over the telephone, OK? So, our average inmate probably 
spends 30 to 45 minutes, per day, visiting with their family--
primarily, doing homework with their kids we found.
    Disciplinary actions in the prison are down, substantially. 
If you have a disciplinary action, you cannot work for us for 
90 days. So, what you wind up doing is going back to 50 cents a 
day instead of $10 an hour, let us say.
    We also sponsor and teach classes on personal improvement: 
fathering, finances, interpersonal skills, etc.
    We think that recidivism is down. While we do not have 
specific empirical studies on that, we have employed 14 inmates 
that have come out of our manufacturing company inside of the 
prison on the outside--in our civilian workforce. Two of those 
14 have been re-incarcerated. That has been over a period of 5 
years. So, that is 14 percent. And, I think, as you know, 
recidivism rates, in most States, are north of 60 percent. 
Kansas is in the low 30 percent, but I think the reason for 
that is this ability for private company investment ``private 
investment company ability''--that allows for people to work in 
private companies.
    I would also tell you that, when an inmate leaves our 
employment, he, typically, has $5,000 to $10,000 saved up in 
the bank. We have tried to do the best we can to teach him some 
kind of a moral code. And, when he leaves, we do our best to 
get him a job. So, he has some money, he has a job, he has a 
mentor lined up, and he has some cash in the bank. The 
recidivism rates have to be declining, rapidly.
    I can also not overestimate the importance of self-esteem.
    Let me just finish up with spiritual capital. The most 
requested thing from our inmates is for some kind of guidance 
and teaching on moral codes, spiritual improvement, and 
guidance. And, we have started a seminary inside of the prison. 
We will graduate eight students from that seminary. It is a 3-
year, rigorous program. They will graduate next month. Those 
inmates have now become the primary mental health counselors in 
that prison, because of State budget cuts. Those dollars have 
gone away.
    Let me just, quickly, finish by encouraging you to consider 
three things. I do think we need criminal justice reform. Many 
of the inmates working for us, I do not think, need to be 
there. They should be out in society.
    And, second, I think, if we want to have a great 
rehabilitation record in prisons, it needs to be a partnership 
between government, private industry, and the faith-based 
community, doing, essentially, what we are doing. We have seen 
great results there.
    And, third, I think the elimination of poverty--economic, 
social, and spiritual poverty--is not an outside-in thing. It 
is an inside-out thing.
    If we do not transform the mind, the heart, and the soul of 
the inmate, we are not getting done what we need to get done.
    Thank you.
    Chairman Johnson. Thank you, Mr. Ochs. It sounds like you 
are at the forefront of prison reform.
    Our next witness is Dr. Ron Haskins. Dr. Haskins is Senior 
Fellow in the Economic Studies Program and Co-Director of the 
Center on Children and Families (CCF) at the Brookings 
Institution.
    Mr. Haskins spent 14 years on the staff of the House Ways 
and Means Committee's Subcommittee on Human Resources and has 
served as Senior Advisor to the President for Welfare Policy at 
the White House. Dr. Haskins.

 TESTIMONY OF RON HASKINS, PH.D.,\1\ SENIOR FELLOW, BROOKINGS 
                          INSTITUTION

    Mr. Haskins. Thank you very much, Mr. Chairman and Ranking 
Member Carper. I am glad to be here. It is a privilege to 
testify on this important topic.
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    \1\ The prepared statement of Mr. Haskins appears in the Appendix 
on page 56.
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    I was asked, by staff, to cover four topics: spending on 
means-tested programs, basic trend data on poverty and 
opportunity, the importance of action by local communities, and 
whether evidence-based policies can improve our success in 
fighting poverty. Other than that, I can talk about anything I 
want to in my 5 minutes, so---- [Laughter.]
    I have provided some scaled-down figures, from my 
testimony, to the Members and I am going to refer to those.
    So, first, is total spending. I gave you a chart\2\ that 
shows the total spending of the top-10 means-tested programs. 
The Members should have it in front of them. The bottom line 
is, it increased every year. It has increased, dramatically, 
over the entire period since 1962. It has increased, from about 
$18 billion, to $609 billion. This does not include State 
spending. Between the Federal Government and the States, on 
means-tested programs--loosely called welfare programs--we 
spend about $1 trillion a year--and rising.
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    \2\ The chart referenced by Mr. Haskins appears in the Appendix on 
page 57.
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    Now, we did have a substantial drop for the first time. 
That is, probably, because of the great additional spending 
that we had in the stimulus bill that was enacted in 2009. I 
think we will pick up spending again. It already started last 
year and it will continue. So, we spend a lot of money.
    The second thing, I think, that is really important for 
this Committee to understand is that spending on social 
programs and spending on children, as a percentage of all 
Federal spending, is declining. And, the reason that is 
happening is because spending on Social Security, Medicare, and 
Medicaid--I call them the ``big three.'' They have no budget 
and no control. They just grow and they are squeezing all other 
Federal spending--except interest. Between those three programs 
and interest, we will spend 62 percent of Federal revenues--
this is according to the Congressional Budget Office (CBO)--in 
2025. So, we have to do something about that. It looks good 
right now, but it is going to get worse.
    The second thing I want to talk about is poverty and 
opportunity. It is true, as the Chairman said, that, if you 
look at the official poverty rate, we have not made much 
progress. But, I think that is very misleading. I think we 
should look at a broader definition of poverty. There are 
several available from the U.S. Census Bureau called the 
Supplemental Poverty Measure (SPM).
    And, if you do that--if you look at Chart 5\1\--it is the 
third chart here, but it is five and I did not want to confuse 
the Members. It is five in my testimony. This was done by the 
Center on Budget and Policy Priorities (CBPP). It shows what 
happens to the official poverty measure when you include the 
benefits from means-tested programs that I just described to 
you. And, the answer is, for everybody, poverty declines 45 
percent--and, for kids, it declines 40 percent.
---------------------------------------------------------------------------
    \1\ The chart referenced by Mr. Haskins appears in the Appendix on 
page 61.
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    Even more directly, in Chart 6\2\, this shows--and it is 
done by the Congressional Research Service (CRS)--untouched by 
anybody's biased hands. And, what it shows is that, if you look 
at life in a state of nature, for single-mother families--this 
is only single-mother families--they are the most poverty-
stricken group. They are five times as likely to be poor. 
``Life in a state of nature'' means just based on their own 
earnings--a huge poverty rate--almost half last year, all 
right? And then, if we start including the government benefits, 
it steps down all of the way. It steps down between 50 percent 
to 48 percent.
---------------------------------------------------------------------------
    \2\ The chart referenced by Mr. Haskins appears in the Appendix on 
page 61.
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    And, that is why, generally speaking, I think we have a lot 
of incentive built into our structure of the work support 
programs plus earnings--which are up because we have more low-
income families working now than we had in the past--in part, 
because of welfare reform. That strategy, I think, is the 
single most effective strategy that we have discovered so far--
except Social Security.
    And, that leads to the shocking conclusion: If you give 
people money, they will be less poor. That is what Social 
Security does. But, if you want them to earn it, and then, 
subsidize their income, this is the way to do it. We figured 
that out. We could improve it, but it is a great way to do it.
    I want to say one word about mobility. We have very little 
mobility. It has not changed. It is not getting worse, but we 
have less mobility than many countries--especially from the 
bottom to getting higher. We have very good data showing that 
the probability of a kid born to the bottom 20 percent--whose 
parents' income is in the bottom 20 percent--it is roughly 
$23,000 this year--has twice the chance of being in poverty 
when they grow up--twice the chance, at 43 percent, instead of 
20 percent. You would expect the bottom fifth to be just 20 
percent, but it is 43 percent.
    So, we need to do something about opportunity. We made 
progress against poverty, I think, way more than progress 
towards opportunity. That is something that we really need to 
focus on.
    The next thing I want to talk about is communities. I only 
have a few things to say. Bob wrote the book on community 
initiatives. And, if you really want to know about communities, 
do not just read his book--go see the communities that he has 
worked in, with great success. But, implementation is always 
local. So, we need more control of Federal money at the local 
level and at the State level. I think we should figure out a 
way to do that and to do it successfully--based on evaluation--
so that the groups that Bob works with--and other local 
groups--can have a lot more flexibility and be more effective 
in what they do.
    I mentioned, in my testimony, a study by economist Raj 
Chetty, which shows that communities across the United States 
have huge differences in mobility, based on things like their 
public schools, the percentage of married-couple families in 
the community, and so forth--identified many factors. So, this 
is very important. Communities should be a part of a poverty 
strategy.
    And, lastly, I just want to say one word about evidence. 
Evidence is more important now than it has ever been--and 
Congress recognizes that. Congress has passed at least five 
pieces of legislation, in the last 2 years, that increase our 
use of evidence. We have more successful programs, which have 
been shown by rigorous studies to be a success, than we have 
ever had in the past. That is a good foundation. The role of 
Congress should be to make sure that grant funds are spent on 
those programs that have a strong record of success, that we 
continue to evaluate those programs, and that we open Federal 
data systems in the Federal Agencies and the U.S. Census Bureau 
to more research. That would allow us to learn a lot more than 
we know now.
    Thank you, Mr. Chairman.
    Chairman Johnson. Thank you, Dr. Haskins.
    Our final witness is Olivia Golden. Dr. Golden is Executive 
Director at the Center for Law and Social Policy (CLASP). Dr. 
Golden served as Commissioner of the Administration on 
Children, Youth, and Families (ACYF) and then as Assistant 
Secretary for Children and Families at the U.S. Department of 
Health and Human Services (HHS). She has served as an institute 
fellow at the Urban Institute and has served at the Federal, 
State, and local levels. Dr. Golden.

 TESTIMONY OF OLIVIA GOLDEN,\1\ EXECUTIVE DIRECTOR, CENTER FOR 
                     LAW AND SOCIAL POLICY

    Ms. Golden. Thank you very much. Chairman Johnson, Ranking 
Member Carper, and Members of the Committee, thank you for the 
chance to testify on this crucial topic.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Golden appears in the Appendix on 
page 67.
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    You have heard that I am Executive Director of the Center 
for Law and Social Policy and that I have also led these 
programs at the Federal, State, and local levels as well as 
studied their effectiveness as a researcher. So, I wanted to 
draw on all of those in making four main points in my written 
testimony.
    First--and this is a point that Ron just made as well--the 
nation's core economic security programs are highly effective. 
As Ron said, when you measure them right, they cut poverty 
almost in half, they improve nutrition and health care for 
millions of people, and they promote work.
    And, from the research perspective, there is a growing body 
of rigorous research showing that these supports have positive 
effects on children's health, their education, and their work 
outcomes many years later. For example, expanding health 
insurance coverage for low-income children has large effects on 
high-school completion, college attendance, and college 
completion.
    The second main point is that changes in the economy, which 
have fostered low-wage jobs that are unstable, lack sufficient 
hours, and require volatile, last-minute job changes, mean that 
high employment rates do not translate into low poverty rates. 
In fact, the majority of people who get help from the core 
safety net programs are working--they are just earning too 
little to make ends meet. Nearly 70 percent of poor children, 
today, live in families with at least one worker. So, their 
problem is not a reluctance to work. It is low wages, insecure 
jobs, or too few hours.
    The third main point is that community-based innovations 
are the most effective when they build on the foundation of a 
strong safety net. Research demonstrates that families who are 
highly vulnerable and face multiple challenges--often the focus 
of intensive community programs--are especially likely to need 
health and mental health services. And, they are also likely to 
need financial support to meet basic needs, such as food and 
shelter, while they address more long-term changes in their 
lives.
    So, a priority, in supporting community innovation, should 
be expanding Medicaid in all States, ensuring continued support 
for a strong Supplemental Nutrition Assistance Program (SNAP), 
and providing other economic supports. I wanted to give an 
example from my own experience to illustrate the point.
    When I led the District of Columbia's child welfare 
system--so dealing, every day, with the tragedies of child 
abuse and neglect--in the years before the Affordable Care Act, 
I found it tragic when a child would enter our care because her 
mother had an untreated mental health problem, like depression. 
If that parent had been able to get treatment earlier, the 
child might have been spared the trauma of maltreatment and the 
trauma of being removed from her family.
    But, in the absence of health care for everyone, we could 
only try small-scale innovations to help very few. Today, 
though, not only the District, but the 31 States that have 
expanded Medicaid, have an extraordinary opportunity to meet 
the health and mental health needs of vulnerable families. At 
CLASP, we are partnering with both community innovators and 
State and Federal policymakers to seize this opportunity.
    The fourth and final point is that, in order to reduce 
poverty and expand opportunity, Congress should avoid bad 
ideas--those that the evidence demonstrates do not work--and 
should seize opportunities that build on research and 
experience. Starting with the bad ideas that evidence suggests 
do not work, the available evidence suggests that block grants 
do not work for core safety net programs. Their appropriations 
shrink, drastically, over time and they cannot respond to 
economic downturns.
    So, during the recent ``Great Recession'', for example, 
SNAP and Medicaid, which are not block grants, provided greater 
support to States, communities, and families as need rose. But, 
the capped Temporary Assistance to Needy Families (TANF) block 
grant, which allowed, as Senator Carper discussed, opportunity 
for innovation at the beginning--now its value has shrunk by a 
third 
and it left families and States without resources during the 
recession--just when they needed help the most.
    Overly flexible approaches, like block grants or large-
scale waivers, can also divert funds from a program's core 
mission. And, they are not well-suited to national goals like 
ensuring that every American starts life healthy and well-
nourished. Instead--and Ron talked about this--they contribute 
to disparate life chances, based on where a child is born.
    So, to reduce poverty and to renew communities, Congress 
needs to tackle the economic headwinds facing workers and to 
fill remaining gaps in the safety net. My testimony identifies 
five ``next steps'': to ensure access to high-quality child 
care and early education, to expand effective workforce 
development programs and career 
opportunities, to tear down financial barriers to post-
secondary success--that is a key aspect of work--to fix gaps in 
the safety net for the neediest Americans, and, finally, to 
establish minimum standards for wages and job quality--so that 
jobs support, rather than destabilize, families. And, I am 
thrilled that Mr. Ochs added a sixth, which would be to reduce 
incarceration and conduct criminal justice reform.
    Thank you and I look forward to your questions.
    Senator Carper [Presiding.] Thank you all. Those are 
wonderful testimonies and we are grateful to hear them--
grateful that you are here.
    I just was trying to write down, while you spoke, some 
things that we agree on. I like to start by saying, ``Well, 
what do we agree on? '' One, we need to think with our hearts, 
but also with our heads. We need to remember this is a shared 
responsibility. It is not all on the Federal Government. It is 
a broadly shared responsibility with others. It includes State 
and local governments and it includes individuals and families. 
It includes the faith community, nonprofits, and so forth.
    Almost every one of you has, basically, said that we 
should--just not in so many words: ``Find out what works. Do 
more of that. Find out what does not work and do less of that, 
too.'' There is a fair amount of agreement here. I am not 
surprised and I am actually encouraged by that.
    I am going to start, Dr. Golden, with you. And, I am going 
to ask you to--thinking about what Speaker of the House Paul 
Ryan, the former Chairman of the Ways and Means Committee--
where Ron worked for, what, 14 years?--has proposed. And, what 
I would like for you to do for us--each of you, starting with 
you, and then Ron, and Mr. Ochs, and Mr. Woodson, but I--
mention a thing or two you like about the proposal and maybe a 
concern that you have about what is being proposed--and very 
briefly--very succinctly.
    I am going to have to run out of here to run and vote and 
then head for the White House, but we will lead off with that, 
please.
    Ms. Golden. So, I think what I like is that he is focusing 
on poverty. And, I would say something that he has proposed, 
before, that I like--and that there is bipartisan support for--
is expanding the Earned Income Tax Credit, which is a work 
incentive, to be much greater for adults without children. But, 
that is not in this current plan. It is a past agreement.
    Senator Carper. All right. We did a fair amount of work on 
the Earned Income Tax Credit, as you know, late last year.
    Ms. Golden. Absolutely. That was truly important.
    Senator Carper. Some of it was program integrity work, but 
also, I think, the idea was to make it permanent.
    Ms. Golden. Yes. And, that is a truly important 
accomplishment, both for promoting families' work, because that 
is one of the things that helps people work more--and it 
reduced poverty by a great deal.
    In terms of concerns, I think the plan is inaccurate about 
the success of the safety net. That is a point both Ron and I 
made. It is in my testimony, with a lot of research about the 
dramatic reductions in poverty as a result of the safety net 
and the way the safety net supports work.
    It does not recognize the extent to which low-income people 
today are working. And so, what we need are work supports and 
improvement in low-wage jobs. And, it turns to solutions that 
actually do not have evidence in terms of words about 
flexibility and requirements for work, rather than what we know 
about what succeeds for work.
    So, for example, Congress passed a bipartisan workforce 
bill that says that what you really need is the capacity to 
succeed in a post-secondary credential. That is what you need 
to succeed in a job. So, I would say those are concerns.
    Senator Carper. OK. Great. Thank you. Thank you so much.
    Dr. Haskins, same question--a couple of things you like 
about this proposal and maybe one that you have a concern 
about. And then, we will go to Peter Ochs.
    Mr. Haskins. The emphasis on evidence, I think, is 
terrific. We have, residing in Federal data systems in all of 
the Agencies and in the Census Bureau, a treasure of 
information that, as a study by Chetty, which I mentioned in my 
testimony, points out, could be used to learn a lot more about 
poverty, the solutions to poverty, and how to increase 
opportunity. So, I think that, first, that is a good thing.
    Second, he wants to strengthen work requirements in food 
stamps and housing. We have very modest work requirements in 
both programs now. They should be stronger. I was recently a 
part of a group of Brookings Institute and the American 
Enterprise Institute (AEI)--bipartisan--eight liberals and 
eight conservatives. We met for 15 months, five times, in New 
York and Washington to develop a comprehensive plan for 
reducing poverty and increasing opportunity.
    And, the liberal side agreed with more work requirements, 
on the condition that no one lose their benefits without being 
offered a job. That strikes me as a good bargain. I do not know 
how the Committee would feel about that, but I think it is 
worth it, because everybody needs to get this message from the 
welfare programs: They have to work. They cannot just stay on 
welfare.
    Senator Carper. OK, thank you.
    Mr. Haskins. Third, the emphasis on local initiative and 
local programs, I think, is well-placed. We need more local 
energy. I agree, somewhat, with Olivia. I am concerned about 
block grant States, which have not done a great job with the 
TANF block grant. I do not think that their decisions have been 
completely responsible.
    Senator Carper. I would agree.
    Mr. Haskins. So, I think what we ought to do is give 5 or 
10 States the option of having much more flexibility in the use 
of Medicaid, food stamps, housing, and so forth. And, they 
would have to present a plan about exactly what they are going 
to do and how they are going to spend the money so that at 
least there would be a plan. Right now, there is no plan for 
TANF States to do whatever they want to, so they spend the 
money on child protection and all kinds of other things. And 
then, once they do that, they cannot get it back to spend on 
welfare for recessions and other purposes.
    So, it is a compromise. I think it is a reasonable 
compromise. If we do not enlist local government, local 
citizens, and local business, we are not going to be successful 
in reducing poverty.
    Senator Carper. All right, thank you. Thank you.
    Mr. Ochs. And then, I am going to have to run--two minutes 
and then I am going to have to run, but----
    Mr. Ochs. Yes, sir.
    Senator Carper. Go ahead, please.
    Mr. Ochs. I am unfamiliar with the specifics of Congressman 
Ryan's proposal, so I really could not comment on that. But, I 
can just tell you, as an entrepreneur, the less regulation you 
can put on us, the more jobs we will create.
    Senator Carper. All right.
    Mr. Woodson, just very briefly? I have 1 minute and I have 
to run. Please go ahead.
    What do you like and----
    Mr. Woodson. I like Paul Ryan's antipoverty agenda, because 
it consolidates programs and lets recipients apply in one place 
for the services they need, so they do not have to run all over 
the place to qualify for numerous programs. I like that part of 
it. And, I also think it devolves responsibility to a 
government level that is closer to the people.
    What I do not like about the plan is that--I do not think 
local government is any less bureaucratic than national 
government. I support charitable tax credits, where the 
allocation of resources is devolved directly to taxpayers, who 
can write off a portion of their tax liability and give that to 
an organization in their community.
    We had bipartisan agreement on this back in the 1990s, but 
the Bush Administration walked away from it. I think we should 
reconsider charitable tax credits that devolve responsibility 
and authority to individuals who donate, rather than having the 
government involved.
    Senator Carper. OK.
    I thank you all. I would love to stay here. And, we are 
going to be following up with you--probably each of you--to 
further pull great ideas out of your fertile minds.
    And, I like to say that everything I do, I know I can do 
better. The same is true of all of us. The same is true of all 
of our Federal programs--however well-intentioned. So, what we 
want to do is ``find out what works, do more of that; find out 
what does not work and do less of that.'' And, you have given 
us a lot of good things to think about.
    So, thank you. Thank you for your work in these vineyards 
as well--and your personal example--your personal life and your 
business life.
    All right, I think the next person up is a lieutenant, 
retired--so lieutenant colonel in the Army--and her name is 
Joni Ernst. And, she is a wonderful Member of this Committee. 
Senator Ernst.

               OPENING STATEMENT OF SENATOR ERNST

    Senator Ernst. Thank you, Ranking Member Carper.
    And, I would like to thank all of our witnesses today as 
well. This is a topic that I have a very special interest in, 
of course. Iowa--I am intent on combating rural poverty. And, 
what we have seen--and just using some numbers--going back a 
few years--but, in the 2013-2014 school year, just in my home 
community--the community that I live in--about 65 percent of 
our primary grade school children were enrolled in the free and 
reduced lunch program. And, statewide, we see about 41 percent 
of our children participating in that program.
    So, that is an indication of where we are as a State--and 
poverty--and those that qualify for those needed programs. But, 
I do want to dive in a little bit more. We need to talk about 
it a lot more. We have to come together and really work on some 
of these issues. So, I am glad you are here, today. I love the 
passion that we hear from all of you, so thank you very much 
for that.
    One of the foundations of our country's identity--and a 
number of you have really hit upon this--regardless of anyone's 
background--is that we understand that everyone that works hard 
should have an opportunity to succeed. And, I am glad that some 
of you have stated that, today--and that we will work on 
improving the programs designed to help those that are really 
in need.
    And, I would like to start the questioning with Mr. Woodson 
and Mr. Haskins, please. As you know, the Federal Government, 
operating through 13 different agencies, oversees 80 different 
programs designed to serve low-income Americans. And, according 
to the Government Accountability Office (GAO), these programs 
are too fragmented and overly complex for clients to navigate 
and for program managers and policymakers to assess program 
performance.
    I would love to hear some of your opinions on that as well 
as what potential limitations the complexity of these programs 
presents to the folks, as they seek to understand how to 
utilize this system. And, what suggestions could you offer as a 
means to reduce the programmatic duplication? So, a lot of 
issues there--a lot of duplicative programs. How do we make it 
easier to navigate?
    Mr. Woodson. Well, I would like to just start with, I 
think, what Paul Ryan has recommended. There should be, 
wherever possible, some consolidation and coordination of these 
programs.
    But, more importantly, the programs, themselves, must be 
reformed. I will give you one example. The system today is 
designed for self-perpetuating foster care. Seventy percent of 
everybody in prison has spent some time in the foster care 
system. Everyday, a half-million kids are in foster care. These 
are programs financed by the Federal Government and run by the 
State. I want to just walk you through how the problems of 
these young people not only continue, but expand within the 
system.
    Only 3 percent of children coming into that system have any 
psychological dysfunction. But, the moment that they come into 
the system, after being abandoned and neglected by their 
parents, they experience three or four or five moves. The more 
they move, the more they decline and the more the system moves 
them deeper in--from foster care, where the reimbursement rate 
is $15,000 a year, then to a $20,000 reimbursement rate, in a 
group home, etc. The more the system destroys the child, the 
more value the child is to the providers of services to the 
poor.
    A solution is what my friend Pastor Soaries in Somerset, 
New Jersey has done, where the church has taken on its original 
role as a community hub and it has operated a system of foster 
care and adoption, where there is no attrition rate of foster 
families and more children are moving into adoption. I think we 
need to look at models of re-privatization of government 
programs by devolving responsibility back to the church and 
some of the other neighborhood institutions--where outreach 
originated until the Federal Government took them over.
    The more we can devolve government roles back to private 
charity and back to private institutions, the better the 
outcomes will be. We could go step by step through a number of 
program areas and look at prospects for re-privatization.
    Senator Ernst. Thank you. I appreciate that input. Dr. 
Haskins.
    Mr. Haskins. First, the 80 programs are definitely 
excessive. They are overlapping, redundant, and all of that--
and it would be good to try to reduce them. The only time that 
I know about--successfully reducing the number of programs--was 
back in welfare reform, in 1996. We killed, I think, three 
daycare programs. We did not cut them. We put all of the money 
in one place, gave it to the States, and gave them more 
flexibility in using the money.
    I think most people agree that that has been a successful 
thing. Congress has added more money several times since then. 
So, I think that was a good approach. And, that is, roughly, 
the approach that Paul Ryan would like to take--to consolidate 
programs and give more control to the States.
    But, I want to caution that, once you give the States more 
flexibility, they will use it. And, they may use it in ways 
that you do not like--that the Congress does not like. This has 
been a particular concern of Democrats. It would be very 
difficult--I think, impossible--as long as Democrats control 
the Presidency or the House of Representatives, to pass 
legislation that creates these kind of big block grants.
    So, I think the way to go is demonstrations. If you could 
show that these are more effective ways to do it and that the 
States and localities have good ideas--including not just the 
government, but using more of the money in the private sector 
as well, with voluntary agencies and so forth, which we have 
thousands and thousands in the United States--that will be a 
good way to do it.
    Senator Ernst. Yes.
    Mr. Haskins. Can I say one thing about foster care?
    Senator Ernst. Sure.
    Mr. Haskins. Yesterday, the House passed--I believe they 
have since already passed the Family First Prevention Services 
Act of 2016. It has other things in there. But, listen, this is 
really important.
    Title IV-E has a bunch of open-ended entitlements. It, 
roughly, pays to take the kids out of their homes. The States 
cannot get money out of that, until they at least reduce the 
parents' rights and take the kid out of the home. IV-B is 
supposed to be for services and prevention and it is tiny. It 
has hardly grown at all.
    So, years ago, Mr. Johnson, a member of the Ways and Means 
Committee, proposed letting the States have more flexibility to 
use that money, so they did not have to remove the kids from 
the home and so they could use it for prevention and treatment. 
And, Democrats did not like it. They killed the bill every time 
we tried to pass it and Olivia will probably tell you why.
    But, I still think this is a solid idea. And, this 
legislation we passed opens a little hole in that Title IV-E, 
so the States can get money out of IV-E to use for prevention 
and treatment and to avoid the very problem that Bob is talking 
about. Once you take the kids out of the home, it is, ``Katy, 
bar the door.'' You do not know what is going to happen. I 
think, if you are totally honest, you admit that.
    But, anyway, we ought to learn how to use prevention better 
than we do now. I think we can all agree on that.
    Senator Ernst. Right.
    Ms. Golden. And, one of the keys--so, to take prevention--
back to your original question--Medicaid and the Medicaid 
expansion is one important source of prevention. So, I agree 
that the new Family First Prevention Services Act of 2016 
offers an opportunity to do a little bit of helping parents 
upfront. And. those States that also have access to Medicaid 
services, because of the expansion, can then put those things 
together.
    So, that takes me back to your question about what to do 
with this complexity. And, I think, the first headline I want 
to say is that I spend a lot of time working with six States--
Governors and legislators of both parties--Idaho, North 
Carolina, South Carolina, Illinois, Colorado, and Rhode 
Island--which have done a great job of delivering Medicaid and 
food assistance--SNAP--which are 
the--and childcare subsidies, to some degree--in a way that is 
much more seamless for the States and for families. They did 
not need changes in Federal laws.
    And, one of the big things they discovered was there were a 
lot of myths about the Federal law. In fact, the core Federal 
programs, typically, are there for a reason, like to make sure 
that every American does not go hungry or can get health care. 
And, when a State is committed to making that less burdensome 
and more effective, they can find ways to do it. I mean, there 
are lots of examples.
    One simple one is that it is much more burdensome, both for 
workers and for families, if you make people bring in their pay 
stubs from work every time. They, probably, need both health 
care and food assistance. If you can copy those documents, 
technologically, or use----
    Senator Ernst. Right.
    Ms. Golden [continuing]. The data system, it is much 
quicker.
    Senator Ernst. Great.
    Ms. Golden. So, I think that is the headline.
    The second really short headline I will pose----
    Senator Ernst. Yes, very quick.
    Ms. Golden [continuing]. Is that, usually, when you look at 
any chart that has a long list of programs, what it will have 
is a couple of big ones and then small ones. And, the small 
ones are typically there because the real problem is not enough 
resources. So, when you are trying to address, say, the fact 
that child care just reaches 1 in 6 eligible children, the 
Congress may create a small program for a particular targeted 
group.
    But, I think one of the important ways to solve that is by 
making sure that the core programs are resourced enough so that 
you do not have to add lots of additional other little pieces 
to get to those core priorities.
    Senator Ernst. Very good. Well, I appreciate all of your 
input today.
    I apologize for going over. This is a very important topic, 
Senator Johnson. Thank you, Chairman, for bringing this 
forward. I think we need to explore a lot of these ideas and 
have some very good discussions on it.
    But, thank you all very much for being here.
    Chairman Johnson [Presiding.] Thank you, Senator. And, make 
sure you pick up your ``Triumphs of Joseph.'' [Laughter.]
    As long as we are on this topic, though, Dr. Woodson, did 
you mention Irene Pernsley in this conversation? I was voting. 
Did you talk about the story on page 28 of your book?
    Mr. Woodson. No. And, that is an example of what I talked 
about.
    Chairman Johnson. Just quickly----
    Mr. Woodson. I am from Philadelphia and I worked as a 
trained social worker in that system. And, many years ago, 
there was a young social worker, Ms. Irene Pernsley, whose 17-
year-old daughter had a baby out of wedlock. And, they placed 
that child up for adoption, assuming that the child would find 
a loving home. That healthy baby boy went into the system.
    Irene Pernsley later became the Commissioner of Social 
Services for the city of Philadelphia. Eighteen years later, a 
friend who was a consultant told Irene that there was a child 
in the system named Pernsley--and asked if she had any 
relatives in the system. She said, ``No, my grandson was 
adopted 18 years ago.'' The consultant said, ``Well, there is a 
Pernsley here.''
    That healthy child had remained in the system for his 
lifetime. Four people attempted to adopt him, but--because the 
child was getting high reimbursements from the local agency. 
Irene sought information from the agency, which she was 
funding, and they denied her access to information about her 
own grandson. That child was a commodity in that system.
    The agency that had him in its care lost its license. But, 
this is a typical example of the kind of perverse incentives 
that exist within the system. Fifty-three of these well-
established social service agencies have been put into court-
ordered receivership--including the one in Washington, D.C.--
because of their injury to children.
    Ms. Golden. We brought it back. We are so proud of bringing 
it back.
    Mr. Woodson. Yes. Right.
    Ms. Golden. Yes--and wrote about that.
    Mr. Woodson. But, the point is, they were in court-ordered 
receivership.
    One final point: these group foster homes, around the 
country, are the primary source of sex trafficking. Pimps wait 
outside these group homes, run by the State, on Friday and 
Saturday nights so that girls--13 years old and 14 years old--
can crawl out of windows and get into their cars in the city of 
Atlanta and dance in strip clubs and prostitute themselves. 
This is the kind of outrage that we are tolerating in society 
that goes unrecognized and unaddressed as we talk about the 
professionalization of service delivery.
    The only answer to that, is to take the responsibility away 
from the government--whether it is Federal, State, or local--
and devolve authority and resources directly into the hands of 
private churches, where there are higher levels of 
accountability. We must find a way of devolving authority from 
the government. We have been doing it wrong for 50 years. Now, 
it is time to go back to what worked, prior to the government 
getting involved.
    Chairman Johnson. But, again--just to summarize--a child 
was given up for adoption as an infant. Eighteen years later, 
that same child was not adopted and was in foster care.
    Mr. Woodson. Exactly.
    Chairman Johnson. We know the benefits of adoption compared 
to foster care. Senator Tester.

              OPENING STATEMENT OF SENATOR TESTER

    Senator Tester. Thank you, Mr. Chairman.
    Montana must be in a different country, because our foster 
parents do not get paid enough money----
    Ms. Golden. Right.
    Senator Tester [continuing]. To keep a foster kid. It is 
not a money-making proposition. The foster parents, in Montana, 
are doing it out of love for those kids and that is the only 
reason they are doing it.
    And, I would also just say that if there is a kid that is 
put in the foster care system, where the hell is the oversight? 
Where is the Mayor? Where is the Mayor of Philadelphia?
    Mr. Woodson. Right.
    Senator Tester. Where is the Mayor of Atlanta, if these 
kids are being prostituted?
    These people are not doing this stuff in a vacuum. If they 
are doing it----
    Mr. Woodson. Right.
    Senator Tester [continuing]. There needs to be oversight. 
And, I do not know which came first--the chicken or the egg--
and I do not know which came first--the government or the 
churches. I do not know if the churches were doing it--and quit 
doing it--and the government took it over--or if the government 
swept it away from them--but, the truth is, the real problem 
here is poverty. That is the real problem. And, there are some 
other issues, too, but I do not want to get into those.
    I mean, this is a high-powered panel here. I want to talk 
about--in Montana, it is, probably, no different than in the 
inner city. We have reservations that have 80 percent 
unemployment. Businesses do not want to move there. When it 
comes to hope, there is not much of it. And, consequently, 
poverty--housing, water, you go down the list--it is not a 
place people covet.
    So, how do we turn that around? I would like the people on 
this panel to give me the three most important things that need 
to be done--whether it is at the Federal, State, or local 
level--to encourage businesses to come to create good-paying 
jobs to lift these people out of poverty. I just want you to 
give me your top three.
    Ms. Golden. So, my three--should I----
    Senator Tester. Yes.
    Ms. Golden. I would say--and these come--while I do not 
know Montana really well, I have worked a lot in Idaho, so--and 
rural----
    Senator Tester. Just give me your top three, as it applies 
to New York City--I do not care. Just give me your top three.
    Ms. Golden. The whole country.
    First, I do think that it is crucial to focus on babies and 
young children. Everywhere--including in rural communities--
young children and their parents are the poorest. And so, one 
of the pieces is to focus on early childhood: home visiting, 
early Head Start, etc.
    Second, you have put your finger right on the set of issues 
surrounding jobs, which, I think, is crucial. And so, one piece 
of that, I think, is about improving jobs, themselves--the 
minimum wage and job quality--strategies that--paid sick days. 
But, the other part is about ensuring that people get the 
skills and the training, so they are able to succeed at work. 
And, that is not just about workforce programs. It is also 
about community colleges and post-secondary education.
    And, I actually do know that Montana is really interested 
in career and technical education strategies, including in the 
Indian communities--around the reservations--to help make 
powerful connections----
    Senator Tester. OK.
    Ms. Golden [continuing]. All of the way to school.
    Senator Tester. OK.
    Ms. Golden. And, again, I am not sure if this is three or 
four, but I would also say that using subsidized and 
transitional job strategies, where you need them--because 
sometimes what you need--people need to eat while they are 
learning and building skills. And so, whether it is 
apprenticeships, on-the-job training, or transitional jobs, 
that is an important piece as well.
    Senator Tester. OK. Mr. Haskins.
    Mr. Haskins. OK, I think trying to convince businesses to 
come to the reservation is a losing proposition. Why would they 
do it?
    Senator Tester. That is correct.
    Mr. Haskins. People are not trained. There are all kinds of 
environmental problems, transportation issues, and so forth.
    Senator Tester. So, what do----
    Mr. Haskins. So, here is what I would do: First, training 
is crucial, like Olivia said. The training has to be in 
consultation with local business and it has to be providing 
skills for jobs that are available in the local economy. That 
is number one.
    Senator Tester. Amen.
    That is right. That is correct. I could not agree with you 
more.
    Mr. Haskins. OK, good.
    Senator Tester. It does not do any good to train people to 
do theater set designs----
    Mr. Haskins. I am glad to be correct. I wish I could tell 
you something new.
    Ms. Golden. Right.
    Senator Tester [continuing]. If there are no theaters, 
right?
    Right on. Keep going.
    Mr. Haskins. All right. The second thing is to forget about 
taking business to the people. Reservations should set up 
transportation. They should develop relationships with 
businesses that are within 50 miles or whatever. And, they 
should have transportation that they can arrange--small buses 
or vans or something--to take people to their jobs and to bring 
them back.
    Senator Tester. OK.
    Mr. Haskins. I think that would be a much more successful 
strategy.
    And then, the third thing, which you know very well, is to 
develop businesses using Native Americans on the reservation, 
itself. A lot of reservations do this. On some of them, it is 
gambling and industries associated with gambling, but others 
are associated with tourism, showing interesting things that 
are part of their handicrafts--crafts that the tribes make. So, 
developing businesses on the reservation would be a third thing 
I would do.
    Senator Tester. OK, that is good. Peter.
    Mr. Ochs. Yes, we have several manufacturing companies. I 
can tell you, 5 or 6 years ago, literally, we supplied products 
to original equipment manufacturers, OK? So, we would provide 
products to people that build other things, which the consumer 
is going to buy.
    Over the last--let us say, 10 years--those original 
equipment manufacturers, who we were producing for, have come 
to us and just literally said, ``You have to reduce your price 
by this or that, etc.'' OK?
    Senator Tester. Right.
    Mr. Ochs. And, basically, we have seen a lot of that going 
offshore, OK?
    Senator Tester. Yes.
    Mr. Ochs. I am a manufacturing guy, so----
    Senator Tester. Fair trade policies, is that where you are 
heading?
    Mr. Ochs. I am sorry?
    Senator Tester. Fair trade policies, is that where you are 
heading with this?
    Mr. Ochs. Well, I am a free-market guy, so I think that is 
one thing. I think it boils down to the American people. Do you 
want to pay $20 for a pair of jeans that were made in China or 
$40 for a pair of jeans that were made in the United States? I 
am going to put it back on the American people.
    Senator Tester. OK.
    Mr. Ochs. There are some businesses abusing the system. I 
agree. But, overall, the free market is alive and well in the 
United States of America.
    Senator Tester. Yes.
    Mr. Ochs. And, until Americans say, ``We are going to buy 
American''----
    Senator Tester. Yes.
    Mr. Ochs [continuing]. I think we have a problem.
    Senator Tester. Yes. OK.
    Mr. Woodson. People just do not look at price. People want 
to know the value of goods and the work that they provide. The 
first of my three recommendations is to create violence 
reduction and civil order--returning civil order to a 
community. Nobody can operate a business if there is not civil 
order.
    Senator Tester. I would agree with that. Yes, keep going.
    Mr. Woodson. The way you do that is to empower the people 
inside of those same cultural and geographic zip codes who have 
demonstrated that they can help transform and redeem people. 
And then, once a heart has been transformed, opportunity works.
    And, the same is true with drug addiction. Drug addiction 
has risen--not only in low-income communities, but all over the 
country. The answer is not professional therapeutic 
intervention--it is moral restoration. And, again, for this, I 
would look to local institutions.
    The third element is transportation--similar to the program 
of Pastor Jerome Smith's church, in the Senator's city of 
Milwaukee. This church is providing vans to take people out to 
where the jobs are, but it is also promoting personal 
restoration.
    So, those would be my three recommendations.
    Senator Tester. Well, I appreciate you guys--I am sorry I 
was not here for your opening remarks and your testimonies, but 
I appreciate you being here. I appreciate your perspectives.
    We deal with a lot of frustrating things in Washington, 
D.C.--and excuse me for going over, Mr. Chairman--but poverty 
is one of those tough nuts to crack, I have to tell you, 
because we 
are talking about Indian Country, where we have 70 or 80 
percent--I am sure the inner cities are the same way.
    And, there are so many challenges that you do not know what 
to do first. You do not know whether to rebuild the K-12 
education or to do the preschool education. You do not know 
whether to empower the community colleges and the technical 
colleges, to be able to get a well-trained workforce with jobs 
that actually can employ people, or whether to put it in 
transportation and police protection--or in spiritual 
reinvigoration. It is all part of the equation.
    But, I do want to thank you guys. I think this is a good 
discussion and I think this is an opportunity to start to 
figure out ways we can bore down to really make a difference. 
The only other thing I would add to all of your comments is 
that the Federal Government cannot fix people's problems alone. 
We need help from the people on the ground to make this happen. 
If we work together, we can make it happen. Thank you all.
    Mr. Woodson. Thank you, Senator.
    Ms. Golden. Thank you.
    Chairman Johnson. Thank you, Senator Tester.
    If you just wait for 2 seconds--I want to answer--because I 
know Mr. Ochs answered a question from Senator Carper, in terms 
of what we can do, and he said that we could reduce the 
regulatory burden.
    Now, I was talking to one Wisconsin paper manufacturer. 
Just four regulations, issued recently, are costing that paper 
manufacturer the equivalent of $12,000 per year, per employee. 
Now, the Wisconsin paper association came up with cost 
estimates--somewhere between $12,000 and $22,000 is the cost 
per year, per employee, of the regulations issued over the last 
5 years. So, that regulatory burden is massive. And, if we can 
reduce that, you will have more money going to people's 
paychecks as well.
    Senator Tester. And, I would say it depends on what the 
regulation is. If that regulation there is downshifting costs 
to the next generation, that regulation needs to be enforced. 
If that regulation is regulation for the sake of regulation, 
you are exactly right.
    Chairman Johnson. We have a $2 trillion regulatory burden--
which is about $14,800 per household--so it is massive.
    Again, I want to thank all of you.
    And, Senator--whoops. Rats. [Laughter.]
    Give that to him--page 28. [Laughter.]
    Thank you.
    Mr. Ochs, in your testimony, you were talking about how one 
of the reasons that you did this was because you could not find 
enough people for your manufacturing plant. I have been in 
manufacturing for 30-some years. It was many years before I 
could hire enough people. I have traveled around the State of 
Wisconsin, tirelessly. There is not one manufacturing plant I 
visited, in 6 years of traveling around the State, that can 
hire enough people. That is an unbroken record--not one.
    Mr. Ochs. Right.
    Chairman Johnson. Why? What is your evaluation of that? I 
mean, we are talking about jobs. We are talking about all of 
these opportunities. Why can manufacturers not hire people? I 
have my own theories. I would like to hear yours.
    Mr. Ochs. Sure.
    I think, first, we have really turned from a production 
society to a consumer society, OK? So, one factor is that 
everybody is thinking consumption instead of production--and 
manufacturing is, primarily, production.
    I think, also, in some sense, manufacturing is a difficult 
job. It is, oftentimes, a physical job. And, why work for $15 
an hour doing that when you can work for $15 an hour doing 
something else? In our case, we were in a small town and we 
just simply did not have the labor resources there.
    And, I will second your motion on regulatory burden. It is 
difficult for us to compete, as a small business--and small 
businesses create most of the jobs in the country, as we know--
to compete with the large institutions. We have, literally, 
seen large companies who love the regulatory burden, because 
they can afford it and they can stand it, but they know the 
small guys cannot.
    Chairman Johnson. It is a barrier to entry----
    Mr. Ochs. Yes, it is a barrier to entry.
    Chairman Johnson [continuing]. And, to competition.
    Mr. Ochs. Yes.
    Chairman Johnson. And, again, the numbers are, I suppose, 
somewhat disputable, but I would say they are also undeniable. 
I mean, when you talk about people--$12,000 to $20,000 per 
year, per employee--just from the regulations issued over 5 
years. And, you can argue about specific regulations, but $2 
trillion--a number of studies put it at that--divided by the 
number of households--$14,800 per year, per household. It is a 
massive regulatory burden and that is money that could be in 
people's paychecks.
    Ms. Golden. On the ``why,'' Senator Johnson--one of the 
things that we do a lot of work on at CLASP is career 
pathways--on how you can create a pathway where somebody, who 
is starting out in a school system that is not giving them what 
they need--that does not have the basic requirements----
    Chairman Johnson. Are we talking about school choice?
    Ms. Golden. No, I am talking----
    Chairman Johnson. I have other questions for you.
    Ms. Golden. OK, great.
    Mr. Haskins. Could I add something really quickly?
    I was in Wisconsin 2 years ago, meeting with the State 
legislature. And, they invited a manufacturer, who told an 
anecdote about needing welders. And, he said good welders could 
make $60,000 to $70,000 a year.
    Chairman Johnson. Yes, right.
    Mr. Haskins. And, he said they are always short because 
they----
    Chairman Johnson. Yes.
    Mr. Haskins [continuing]. Cannot get trained people.
    Chairman Johnson. Yes.
    Mr. Haskins. He said he would even be willing to train 
them, but then, they go to another plant, so----
    Chairman Johnson. So, here is my----
    Ms. Golden. And, we used to have----
    Chairman Johnson. Here is my theory on the case: First of 
all, we tell our kids, you have to get a 4-year degree, which 
implies that working in a factory is somehow second-class 
status. Nothing could be further from the truth. All work has 
value.
    We pay people not to work. Let us put up a chart.\1\ As 
long as we are talking about this, let us put up the one from 
the head of the Pennsylvania welfare department. I think, Dr. 
Woodson, you might have been in the Budget Committee hearing a 
number of years ago. This is a study done--households headed by 
a single mom, in Pennsylvania--shows the welfare cliff.
---------------------------------------------------------------------------
    \1\ The chart referenced by Senator Johnson appears in the Appendix 
on page 89.
---------------------------------------------------------------------------
    And, basically, just to quickly summarize--and it is kind 
of a difficult chart to read, but, for a single mom, in 
Pennsylvania, it was marginally beneficial for her to make up 
to $29,000. Past that point, because of the increase in taxes 
and the reduction in welfare benefits, there was no marginal 
value. She did not put another penny in her pocket until she 
was able to make $69,000 per year.
    So, you have that massive gap. It pays to keep working up 
to $29,000. Past that point, somebody who is economically 
rational would sit there and go, I am not going to work 
anymore.
    Ms. Golden. It is not----
    Chairman Johnson. Very few people go from $29,000 up to 
$69,000. It does not happen all that often. So, that would be, 
certainly, my evaluation of why manufacturers cannot get enough 
workers. We denigrate the trades. We do.
    I was head of the ``Partners in Education Council'' of our 
chamber. And, we actually had an initiative--first, life 
skills, but then, the next step after high school was--we 
asked, ``How do we give kids and their parents the information 
they need about all of their options after high school--above 
and beyond just 4-year degrees?''
    And so, I must have, in these meetings, said a hundred 
times, ``We have to stop denigrating the trades.'' I had made 
the comment, and 5 minutes later, a very sympathetic school 
administrator was talking about a young man and, basically, 
said, ``Well, Bill is kind of struggling in school. I mean, let 
us face it; all he is ever going to be is a mechanic.''
    Now, fortunately, the head of Oshkosh Tire was at the other 
end of the table. And, she goes, ``Hey, I need those 
mechanics.'' At which point, the administrator goes, ``Oh, that 
is not what I meant.'' Unfortunately, that is exactly what she 
meant.
    So, again, it is an attitude we have inbred in our culture 
that says that there are first-class and second-class ways of 
realizing your full human potential. Nothing could be further 
from the truth. All work has value.
    And, by the way, in Wisconsin, so many manufacturers pay 
for the training. You leave high school, you go into 
manufacturing, and you do not have to get $30,000 into debt. 
You can actually get a job, you can start making money, and 
then, the company, themselves--because they cannot find 
workers--they will pay for your education. You never have to go 
into debt. But, we do not tell our kids that. We tell our kids, 
you have to get a 4-year degree. And, we have done a huge 
disservice.
    I have more time, so I will turn it over to Senator Peters 
right now.

              OPENING STATEMENT OF SENATOR PETERS

    Senator Peters. Well, thank you, Mr. Chairman.
    And, thank you to the panel for your testimony here, today, 
on a very important topic: how we make sure that everybody in 
this country has the opportunity to achieve whatever their 
version of the American dream is. So, people should have the 
opportunity to do that.
    Mr. Ochs, I would like to just ask you to talk a little bit 
about some of your programs, because this is an issue that I 
have thought a great deal about--and I am concerned about, when 
it comes to folks who have gone to prison and are paying their 
price to society, which they should. These are individuals that 
have done something wrong. They need to pay their price--do 
their time.
    But, what we find is that, too many of them, when they get 
out, they find out that they are actually serving a lifetime 
sentence. It is not a sentence for 5 years or 10 years or 
whatever it may be. And, it does not seem to be dependent upon 
whether or not they get skills as well. Now, you provide some 
wonderful skills for the folks that you have talked about. I 
appreciate your comments on that and it is wonderful to have 
those skills, but, my experience is that it does not matter 
when they get out, but that employers are simply unwilling to 
hire somebody who has spent some time in prison.
    The whole system is premised on second chances--that if you 
have done your time, you should have a second chance to be able 
to get back on your feet. And, I know a number of young men and 
women want to do that, particularly, young men in some of the 
cities in my State, who never get that chance ever.
    Now, you have talked about hiring some individuals and I 
applaud you for doing that with your company. I also applaud 
you for your statement that you help folks get jobs when they 
get out. But, if you could tell us some of the impediments that 
you find for these individuals--because, I assume, they are 
having a difficult time getting hired--just like they are in 
Michigan. What can we do to help these individuals and to help 
employers hire these individuals--to give them the second 
chance that the system is premised on?
    Mr. Ochs. Sure.
    The greatest impediment is that they have a felony on their 
record----
    Senator Peters. Right.
    Mr. Ochs [continuing]. And so, who wants to hire a felon?
    Senator Peters. Right.
    Mr. Ochs. And, I know you are familiar with ``ban the 
box.'' And, we are, probably, for that.
    I would say that, before that, I think we just need to 
educate the business community that these are not all bad 
people. There is a stigma in society and somehow we have to get 
over that stigma in society that says that because this person 
came out of prisons and has felonies, he is not worth hiring.
    We are working amongst the businesses we know and the 
nonprofits we know to try to reduce that. We, literally, have a 
group--because of the ability to not hire people, we think 
there is a great opportunity for felons coming out of prison to 
get jobs, but they need training, they need mentorship, and 
they need some kind of accountability, I think, for a year, 
maybe, after they are out.
    We just had a gentleman that was in for 47 years. He came 
out. We hired him. He went back in 3 months later. And, he 
wrote me a long apology and he said, ``Pete, I am sorry, but I 
cannot live outside anymore. I have been inside too long.''
    And, the system--there is no rehabilitation inside of the 
prison system. And, I think it starts inside of a prison. We 
have to start training. We have to, some way, create economic, 
social, and spiritual capital inside of the prison. And so, we 
have to incentivize businesses, nonprofits, or faith-based 
people to get in there and do that, OK? When they come out, 
there needs to be some kind of a re-entry ramp that helps them, 
for a period of time, to do that, I think.
    Ms. Golden. And, I would just add, if I may----
    Senator Peters. Yes, please.
    Ms. Golden [continuing]. Because I am very much hoping we 
can touch base afterwards, to work together on this--we just 
did a forum, sponsored by CLASP and others, with young people, 
including those who had been incarcerated--and others. And, I 
would underline exactly what you said about ``ban the box'' and 
reaching out to employers, but also about the role of education 
and training.
    And, I mean, it think is also an important point for 
Senator Johnson's theme, which is that preventing the initial 
incarceration is also about work opportunities, training, and 
job opportunities, because people who are incarcerated--not 
only does it disproportionately hit communities of color hard, 
but it disproportionately hits people without a high school 
diploma. It is about school discipline. It is about the ways in 
which you interrupt that.
    And so, I am just tremendously excited to see the interest 
in this room, in thinking about how employment strategies and 
training--and that happens before, that happens during, and 
that happens after--can be solutions.
    The only other solution I would mention is that we hear a 
lot from young people--both before and after--about health, 
mental health, and trauma. And so, I would also put those on 
the list of strategies that are part of the solution.
    Senator Peters. Thank you.
    Mr. Woodson. Senator.
    Senator Peters. Mr. Woodson.
    Mr. Woodson. There are several barriers--to presume re-
entry. One important factor is a prisoner's contact with his 
natural support system--his family.
    Some of those 2.3 million incarcerated individuals must pay 
as much as a dollar a minute to make telephone calls home. Two 
companies make $1.2 billion providing telephone service to 
inmates. It is outrageous. My daughter lives in Costa Rica. It 
costs me nothing to call her. It would be a dollar a minute if 
she were in prison. And, that is a burden on families.
    The second barrier is that, if you come out of prison and 
you have a trade--and if you were a plumber or electrician, for 
example--you lose your license to operate. Ohio Governor John 
Kasich came together with Democrats and Republicans and passed 
legislation that would restore the licenses of former inmates.
    Some who are released from prison do not have 
identification. They do not have a driver license, so they 
cannot get to work. Yet, it can take up to 6 months for a 
person coming out of prison just to get a driver license.
    So, there are practiced barriers that we place in their 
path that can be easily addressed. Occupational licensing must 
be restored, identifications should be easier to get, and the 
fees for telephone calls to families from prison must be 
lowered. Currently, those calls represent a $1.2 billion 
industry. In addition to the profits of community firms, 40 
percent of the money from inmates goes to those prisons. It is 
the biggest fleecing of inmate families in America. This is a 
national outrage that is being ignored.
    Senator Peters. Well, I appreciate all of your comments on 
this. And, I also appreciate the comments on ``ban the box,'' 
which is going to be critical to at least give an individual 
the opportunity to interview and not to be thrown out before 
they even get a chance to make their case to somebody. And, 
presumably, if they make their case, an employer may be 
impressed and say, ``I am willing to take that chance.''
    But, nevertheless, even with the training and all of the 
aspects that you have brought up--which are all very important 
points--you still get to the point where an employer feels 
like, ``I do not know if I want to take this risk with someone 
who has this felony--even though they have interviewed well and 
come across as sincere.''
    I mean, is there something that we should be doing to make 
it easier for those employers that are on that edge? And, I am 
sure you have all seen this.
    Dr. Golden, do you have an idea?
    Ms. Golden. Well, I guess I have two thoughts.
    One is that people who have had the experience, like Mr. 
Ochs, are very powerful ambassadors----
    Senator Peters. Right.
    Ms. Golden [continuing]. To other employers.
    Senator Peters. Right.
    Ms. Golden. And, we have seen that work in other arenas.
    I think the second thing that I would say--and this is 
partly because we have been working with States on workforce 
strategies that take advantage of some of the opportunities 
that Congress authorized--for example, for on-the-job training 
or subsidized employment. Sometimes, if the employer has a 
tryout opportunity, as part of training and skills--and, as a 
part of that training and skills, if somebody is working and 
they get to see them, that is also important.
    Transitional jobs, similarly, give somebody the comfort 
that, not only do they look good on paper, but they have 
actually worked--either in my organization or for a supervisor 
somewhere else.
    So, I think those are--I do not think there is a single 
perfect answer----
    Senator Peters. Right.
    Ms. Golden [continuing]. But, I think those are pieces of 
it.
    Senator Peters. Yes, go ahead.
    Mr. Ochs. In Kansas, I think we have a $2,400 tax credit 
for a new employee. And, that is useful, for us, because that 
covers the training costs for that first 4, 5, or 6 months. And 
so, of course, tax credits are great--and are a great 
incentive. So, that would be something you could consider also.
    Senator Peters. Now, of course, you hire some folks that 
come out. You said you hired 14, I believe, in your testimony.
    Mr. Ochs. Yes.
    Senator Peters. You employ considerably more in the prison, 
I would imagine. As folks are coming out, how do you make the 
decision as to who to hire? They have worked for you in the 
prison? And, is that, in some way, instructive for us to have 
other employers use that sort of process?
    Now, obviously you are in a different position, because you 
have actually seen them work and you have the opportunity to 
supervise them----
    Mr. Ochs. Sure.
    Senator Peters [continuing]. But, are there still some 
lessons that may be helpful to us, as we think about helping 
folks actually get employed with these----
    Mr. Ochs. Yes. We have just simply made the commitment, 
personally, that if they come out of that prison and they 
parole to Hutchinson, Kansas, where our main office is and 
where our main manufacturing facility is, we will hire them. We 
will make a space for them, OK?
    Once again, I think a trial period where you would not be 
subject to the unemployment situation and the laws, etc.--that 
would be helpful. Tax credits would be helpful. I think it is 
just a matter of the business community needing to start 
educating each other on how these are--it is a great supply of 
labor--and however we can do that. It is an education thing.
    Senator Peters. Right.
    Mr. Ochs. I have lots of friends that are fellow business 
owners and I just, literally, get on the phone and say, ``Here 
is Joe. He is coming out. He is a good guy. He has worked for 
me. You need to give him a chance.''
    Senator Peters. That is great.
    Mr. Ochs. And, they employ them.
    Senator Peters. Great.
    Mr. Ochs. And, we do that throughout cities in Kansas.
    Mr. Woodson. Senator, I would not undervalue your presence, 
as policymakers, in the communities we serve. I have the 
pleasure of taking Congressman Paul Ryan, every month, to site 
visits in a different city. And, just the fact that he came and 
visited a program helped to validate it. And, I am sure similar 
visits by Senator Johnson and others, who would take the time 
to visit our programs, would serve as a means of validating 
them and highlighting their importance. That is something 
beyond your legislative role, but it could make an important 
difference.
    Senator Peters. Right.
    Mr. Woodson [continuing]. Your reputation helps to validate 
what we do.
    Senator Peters. Great. Thank you so much. Thank you for all 
of your answers.
    Chairman Johnson. So, Senator Peters, let me describe a 
program that is actually working--doing exactly what Robert 
Woodson is talking about. And, we named it after his book. We 
called it the Joseph Project.
    And, it was teaming up with Pastor Jerome Smith of Greater 
Praise Church of God in Milwaukee, Wisconsin. And, what Pastor 
Smith does is he identifies, he vets, and he screens, but then 
he gets people to commit to turning their lives around. And 
then, what we do, with our Senate staff, we go in as a 
constituent service a 1-week training program.
    We teach them soft skills. We teach them interview skills. 
And then, we set them up with interviews. And, they are getting 
jobs. They are getting real careers. It has actually been so 
successful that the Sheboygan County Economic Development 
Corporation donated two vans to provide the transportation.
    The program is still in its infancy. We have had, I think, 
10 of these different training programs. He starts with about 
60 individuals and then, again, by screening, vetting and, 
again, getting them to commit to succeed, he winnows it down to 
about 12 people. And, generally, those training sessions have 
somewhere between 12 and 20 people. And, it actually works--
other than our Senate staff just doing it as constituent 
service, there is no government funding--there is no government 
program. It is just an individual, community-based and faith-
based program helping people, one person at a time.
    One of the individuals, whose name is Willy--one of the 
graduates--I just saw him up at Nemak, a company in Sheboygan, 
Wisconsin--he said that he had gone through, literally--he 
said, ``I would need your hands to get the number of 
fingers''--the number of job-training programs and placement 
programs he has gone through. And, he said that the difference 
between this program and those--it kind of gets to what you are 
talking about, in terms of the foster care system--is that the 
people in the Joseph Program, they are not concerned about 
their program, they are not concerned about their government 
funding, and they are not concerned about themselves. He said, 
``They are just concerned about us.''
    But, again, that is a community-based and faith-based 
program that actually works--no government involvement other 
than, as Robert talked about, you are using the Senate office 
to highlight success--and it actually works. Senator Lankford.

             OPENING STATEMENT OF SENATOR LANKFORD

    Senator Lankford. Thank you. Thank you, Mr. Chairman.
    Thank you all for being here and for the work that you do 
all of the time in dealing with poverty issues across the 
country.
    Mr. Haskins, let me bring this up to you first. There are 
some interesting studies that you have done dealing with just 
marriage--two-parent households, one-parent households, and 
what I believe you call the three norms. I did not hear you 
mention it earlier in your testimony. I had to slip out for a 
vote and then come back--and want to make sure we come back to 
that, because I want to make sure I have this right.
    I believe, in your study, you have identified three norms: 
if someone completes high school, if they have a job, of any 
type, working full-time, and if they delay parenthood until 
marriage, they have a 71 percent success rate in getting out of 
poverty. I want to make sure that number is correct and have 
you be able to highlight that.
    Mr. Haskins. Yes, it is. It depends on the year that you do 
it. This is based on a representative sample of the American 
population and it just describes how, if people meet those 
three criteria, they have over a 70 percent chance, depending 
on the year, of avoiding poverty--not getting out of it--of 
avoiding it--in any given year, when you do this study.
    And, conversely, if they violate all three norms, they 
have, like, a 10 percent chance of being--I am sorry, about a 
70 percent chance of being in poverty. So, yes--and it is just 
correlational. It just describes what the actual situation is.
    So, the implication is, if we could get kids educated, if 
they waited until 21 and married before they had a baby, and if 
they worked full-time at whatever job they could get, they 
would avoid poverty.
    Ms. Golden. And, just may I add to that----
    Senator Lankford. Sure.
    Ms. Golden [continuing]. Because, I think the point that it 
is correlational is really important, because, one of the 
things that I highlighted, in my testimony, is that about 70 
percent of poor kids live in families where somebody is 
working, but they are often not able to get enough hours.
    And so, full-time work, for most low-wage workers, is not a 
choice. I actually just talked to someone the other day who is 
working 3 days a week, trying to live and get by, here in D.C., 
and go to school the rest of the time----
    Senator Lankford. Right.
    Ms. Golden [continuing]. And, they just cannot get more 
hours. So, I do think that the evolution of low-wage work, in 
terms of hours and schedules, is very important.
    In terms of single-parent families, I do want to highlight 
that about 5 million children are poor in married couple 
families. And so, the percentages are different, in part, of 
course, because it is so much harder to raise kids and work 
full-time, but I do want to highlight that, for a large chunk 
of poor children, the challenge is hours and wages.
    Senator Lankford. OK.
    Ms. Golden. And so, we need to really focus on that.
    Senator Lankford. Yes. For someone like myself, who grew up 
in a single-parent household--which, by the way, today is my 
mom's birthday, so I can say happy birthday to her, as well. 
But, she worked incredibly hard----
    Ms. Golden. Yes.
    Senator Lankford [continuing]. To be able to raise my 
brother and I in a single-parent household--and also just to 
set an example and to set the character traits.
    Ms. Golden. Yes.
    Senator Lankford. It just goes back to something, Robert 
Woodson, you have said multiple times--that I have heard you 
say. It is not a matter of going into a neighborhood and saying 
that everyone here is not successful.
    Mr. Woodson. Exactly.
    Senator Lankford. That is not true. There are good examples 
in every neighborhood and in every community where people have 
beat the odds on it. And, what I am trying to look at, with 
this research--and what you had mentioned before, Dr. Haskins--
was the evidence. What are the things that we know work? 
Finishing high school, having a full-time job, and delaying 
having children until you are married.
    You also had mentioned, I think, in some of your evidence--
if I remember the number right--there is a five times higher 
poverty rate for those that are in a single-parent household 
than there is for those that are in a two-parent household. 
Correct? Not correct?
    Mr. Haskins. Yes, that is correct. That is correct. Dr. 
Golden likes to state how many kids live in married couple 
households. Fine. But, the odds are that, if you get married 
and if you stay married, your financial situation will be much 
better. And, by the way, we now have huge research--I have been 
alive long enough to know that this has changed, dramatically.
    The academic world used to think that marriage was not that 
big of a deal for child development. Now, there is almost 
universal agreement that it has a huge impact on children. Kids 
who are reared by married-couple families do better, in many 
important respects, than kids who are reared by single parents.
    I used to work in the Bush Administration. And, the 
President wanted to talk about the importance of marriage. The 
first thing he always said was, ``The hardest job in America is 
being a single parent and I admire single parents.'' So, he did 
not want to cast any aspersions----
    Senator Lankford. Never.
    Mr. Haskins [continuing]. On single parents. But, the facts 
are the facts. And, if you are talking to kids--if they want to 
do the best by their children and for their own well-being--
they will get married, they will not have children outside of 
marriage, and they will maintain their marriage once they are 
married.
    Senator Lankford. Because that worked for them.
    Ms. Golden. And, I think the two conversations are 
connected, because the high incarceration rates for young men 
are a very big contributor to young women's and young men's 
inability to become a stable couple.
    Senator Lankford. Right, not having that same connection.
    Ms. Golden. So, that is a solution----
    Senator Lankford. I want to come back to another barrier on 
that.
    Ms. Golden. Right.
    Senator Lankford. Mr. Woodson, were you going to say 
something as well?
    Mr. Woodson. Yes, I just think--and Ron and I have had this 
discussion many times before. What concerns me about the 
academic community is that they do not study situations where 
there are cohorts of low-income families that have demonstrated 
that data is not destiny. There are some who have started life 
in that disadvantaged group, but who found surrogate ways to 
cope and to rise up.
    I saw the success rate of a public housing development, 
where residents sent 460 kids to post-secondary education and 
witnessed the dramatic reduction of teen pregnancy in that 
development. But, I did not see researchers coming into 
circumstances like that to study the successes of people, in 
spite of their situations. ``60 Minutes'' can find them, the 
networks can find them, but our academic community does not 
seem to be interested in studying the successes of people in 
those situations.
    Senator Lankford. Do you think it is because they want a 
big sample and want to show a large statistic, rather than 
trying to look at one area and say that it was successful? And 
then, you cannot really, statistically, extrapolate that 
everywhere--though you can find what you have identified 
extremely well--is this house and this house----
    Mr. Woodson. Exactly.
    Senator Lankford [continuing]. Next-door to each other, 
dramatically different outcomes--had the same situation, same 
neighborhood, and same family dynamic, but this family worked 
and this family did not.
    Mr. Woodson. Exactly.
    Senator Lankford. These kids succeeded and got out and 
these did not. What happened?
    Mr. Woodson. Exactly. That is what we should be asking. It 
seems to me that the research community should make their 
protocols fit the reality of the people, rather than requiring 
the people to meet their criteria and protocols.
    Senator Lankford. So, let me ask you a question as well--
and that deals with marriage penalty. We still have areas, in 
Federal tax law--in means testing and such--where there are 
marriage penalties.
    Interestingly enough, if you are a veteran and you have a 
service-related disability--with a veteran, there is actually a 
marriage bonus that is there. So, that incentivizes marriage in 
the veterans system. But, in other areas, Social Security 
Disability Insurance (SSDI) being one of those, there is a 
marriage penalty that is built into it.
    Are there other areas of the Federal tax code that you 
think would disincentivize marriage? I would hope there is 
nothing built in there that would disincentivize full-time work 
or disincentivize getting a high school education.
    So, when I look at those three factors, based on what you 
are identifying--let us just talk about the marriage penalty. 
Are there any areas in the marriage law, right now--or things 
that you have seen--that would disincentivize marriage--from 
the Federal code?
    Ms. Golden. I think Congress fixed the major Earned Income 
Tax Credit issues, so I think that is something to take credit 
for.
    Mr. Haskins. I do not think it is exactly fixed, but I 
think, in general, the negative effects of the tax code on 
marriage are vastly overstated. We have a very good research 
study based on--the only way to know is to do a national 
probability sample----
    Senator Lankford. Right.
    Mr. Haskins [continuing]. So, it is representative. If you 
do that, the EITC, for most couples, actually provides an 
incentive to marry, because, when they are--this is based on 
cohabitating couples below 200 percent of poverty. I can send 
you the reference. And, believe it or not, they, generally--
about 70 percent of them have an incentive to marry, because 
their EITC goes up. And, the reason is that the way that EITC 
works----
    Senator Lankford. Right.
    Mr. Haskins [continuing]. Is it increases, throughout a 
range, up to about----
    Senator Lankford. Social Security Disability Insurance goes 
in the other direction. If you are on SSDI----
    Mr. Haskins. Yes.
    Senator Lankford [continuing]. And you go into marriage, 
then there is a penalty on that. You get a reduction.
    Mr. Haskins. Yes.
    Senator Lankford. So, it disincentivizes marriage in the 
disability rules.
    Mr. Haskins. There were lots of situations like that in the 
past. Well, we have some like that in work, as well, as this 
chart that the Chairman showed earlier shows.
    Senator Lankford. The cliff.
    Mr. Haskins. Yes, but if you look at an actual sample of 
people--the Urban Institute has done this--there are not people 
that get all of these benefits----
    Ms. Golden. Right.
    Senator Lankford. Right.
    Mr. Haskins [continuing]. Especially males. So, you can 
make up cases and make it look like the tax code is really 
providing huge disincentives, Senator, for both work and for 
marriage, but when you actually look at a sample of people that 
have various characteristics and how much welfare they actually 
get, there is not that much disincentive.
    Ms. Golden. And, just to reinforce that, my written 
testimony has a long review of the research on work incentives. 
And, I think, actually, there are some actual mistakes in this 
chart--when we saw it before--which we can get back to you on.
    But, even separate from that, I think Ron's point is the 
key point. When you look across low-income people, the Earned 
Income Tax Credit increases with work, particularly, in those 
States that have taken the Medicaid expansion. There is no 
longer the big disincentive that you lose your health 
insurance. So, there is support for work for the large majority 
of people that you find in a sample.
    Coming back to full-time work--particularly, for childcare, 
because childcare is something that you are going to need to 
work full-time in many families--either households with both 
parents or with a single parent. It is far too expensive to be 
able to do, even with a pretty steady job, at a low wage. And 
so, the need is just far greater than what is available. And 
so, someone can get to a place where their childcare subsidy is 
no longer available.
    And, the law is flexible enough to let States fix that, but 
it is a dollar problem. The dollars for childcare have been 
going down and we need more there. But, I think that is 
something that Congress could do to support incentives for 
work--but I think that is kind of the main gap to fill.
    Senator Lankford. Well, I would just only say this, if I 
can make one quick statement. I spoke to my mom earlier today, 
obviously, on her birthday, to wish her a happy birthday. And, 
she said, ``What are you working on, today? '' I said, ``Well, 
actually, we are working on terrorism and poverty, today.'' 
[Laughter.]
    And, she said, ``If you could fix both of those for me, 
that would be a good birthday.'' [Laughter.]
    Chairman Johnson. How old is your mom?
    Senator Lankford. I am not supposed to say.
    Chairman Johnson. Oh, OK.
    Senator Lankford. So, let us just say that she is older 
than I am, so I will---- [Laughter.]
    I will leave it at that. But, we will pray she has a good 
day, in the days that we can.
    Chairman Johnson. But, there is a certain point where all 
of a sudden it becomes a moment----
    Senator Lankford. We are not at the ``badge of honor'' 
level yet, but----
    Chairman Johnson. OK, good.
    Senator Lankford [continuing]. But, I will still protect 
the lady's age. [Laughter.]
    Chairman Johnson. So, picking up on Senator Lankford's line 
of questioning, we did get the charts--better late than never.
    I just want to go down the line. So, there again you have 
the line of demarcation--our ``War on Poverty.'' Well-
intentioned--no doubt about it. I have often said that the 
definition of the Federal Government ought to be the law of 
negative unintended consequences.
    You look at those three metrics: poverty rates, the number 
of people in poverty, and out-of-wedlock birth rates. I mean, 
you cannot look at those three metrics and say that those are 
metrics of success. But, I would just kind of like to go down 
the line. What is the explanation for out-of-wedlock birth 
rates going from 8 percent to over 40 percent once we 
instituted these ``War on Poverty'' programs? Dr. Woodson.
    Mr. Woodson. First of all, we have to understand that 
aberrant behavior was never associated with poverty. Prior to 
the 1960s, the black community was often used a moral barometer 
of the country. If you look at the 10 years of the Great 
Depression, when we had a 25 percent unemployment rate and a 
negative Gross National Product (GNP)--the black community's 
actual marriage formation rate increased over that of whites 
during that decade. So, obviously, race relations and poverty 
are not related--or correlated--with aberrant behavior.
    But, all of that changed in the 1960s. And, I do not have 
time to walk you through it, but, what happened was, social 
planners began to detach work from income and promoted welfare 
as a right, rather than stop-gap insurance. And, with regard to 
black families, it was viewed as almost reparations that they 
were entitled to.
    Among the academic social planners, the definition of a 
nuclear family was interpreted as being racist. People were not 
encouraged to work or to marry. Welfare went up at a time when 
unemployment in New York was 4 percent among black males. But, 
yet, welfare dependency saw a spiral up as the government 
encouraged people to sign-up on the roles. The social planners 
at Columbia University--Frances Fox Piven, Richard Cloward, and 
the others, who oppose our free market system--said that, if 
they could promote the mindset of entitlements, that could 
force the Nation into income redistribution.
    This is documented in Fred Siegel's book, ``The Future Once 
Happened Here.'' And, there are other writings that tell the 
story of what happened in the black community when we fell off 
of this cliff. In 1965, 85 percent of all black families had a 
man and a woman raising children. Yet, at a time when civil 
rights laws were passed and the government spent all of this 
money on its antipoverty programs, the black family steadily 
declined.
    Chairman Johnson. Mr. Ochs, do you have any thoughts on 
that before I--have any theories on that?
    Mr. Ochs. It is a lack of fatherhood, from our perspective. 
And, when we interview our inmates and say, ``What is the main 
thing you missed growing up? Why are you in prison? ''--I think 
it is a lack of fatherhood.
    Back to your previous question, with regard to why are 
there not manufacturing companies, in 2009, we laid off 
approximately 25 percent of our workforce due to the recession. 
Approximately 9 months later, we started hiring them back. We 
were only able to hire back about 50 percent, because the ones 
that had gone on unemployment benefits--and whatever other 
thing--said, ``It is not worth that extra few bucks.'' And, 
they were averaging $16 or $17 an hour.
    Chairman Johnson. Well, I heard the exact same story from a 
painting contractor from Fond du Lac, Wisconsin, who, finally, 
got a couple of big jobs and went to hire all of his crew back. 
None of them would return. And, they were very honest and said, 
``Well, it does not pay until our unemployment benefits run 
out.'' To add insult to injury, he lost those two jobs to those 
same workers, who did them for cash. Again, that is the 
reality. Those are the unintended consequences. Dr. Haskins.
    Mr. Haskins. Yes, the standard explanation for what has 
happened with the family is both cultural and economic. So, in 
terms of culture, our values have changed very dramatically.
    It used to be, in the old days, that--when I went to high 
school, if a young girl became pregnant, the parents often sent 
her away. It was shameful. And, there was much less premarital 
sex. There was much more early marriage. All of those things 
have changed very dramatically. Sex did not go out of style, 
but marriage did. Our marriage rates have plummeted, for every 
group of women, except for college-educated women. They still 
have very high marriage rates.
    So, there have been big changes in values. And then, if 
you--in culture--but there are also big----
    Chairman Johnson. Let me just say, could it be, though, 
because a single mom--a young woman can actually get benefits 
from the government and it is a little less necessary for her 
to have a husband?
    Mr. Haskins. It could, but----
    Mr. Woodson. So, look----
    Mr. Haskins. Let me finish, Bob.
    Chairman Johnson. I mean, could that be a part of the 
problem?
    Mr. Haskins. Yes, it could. But, then, it is hard to 
explain why it is that whites have had such dramatic increases 
in the past, say, 15 years when, under the theory that Bob 
gives you, it should have happened a long time ago, because 
they could have gotten those benefits before--but they did not.
    And, now, more recently, whites are following the same 
path--so are Hispanics--as blacks did. And, they are, 
gradually, catching up, in terms of non-marital births and low 
marriage rates.
    Chairman Johnson. Again, so, for millennia, you had husband 
and wife and intact families. And then, all of a sudden--boom, 
we just have this breakdown of that, basically, foundational 
building block of a society. You are not seeing any 
correlation? It just kind of happened? The water changed or 
just----
    Mr. Haskins. No.
    Chairman Johnson [continuing]. Things just happened or----
    Mr. Haskins. Wait. I am not saying that welfare does not 
play a role. There are incentives that are unfortunate and it 
does play a role. Why do we look for single explanations? This 
is a very complex issue.
    Chairman Johnson. Well, I am not----
    Mr. Haskins. There are lots of things that contribute to 
it. It is not just one----
    Chairman Johnson. I know, but there are a lot of programs 
that might have contributed to that.
    Ms. Golden. Right. Sure.
    Chairman Johnson. Dr. Golden.
    Ms. Golden. Sure. Let me give you a couple of points on 
that and then on one of the others.
    I think the other thing to headline is that everybody, 
including poor people, are having babies much later than they 
ever did. The teen birth rate is the lowest it has ever been. I 
think, sometimes, people get the picture that what we are 
seeing is people having babies young. We are not. Everybody is 
postponing childbearing a great deal.
    And so, then you get to the question of, do we want to have 
an economy where, really, a young woman and a young man cannot 
have stable enough economic lives to feel they can get married 
and have a family until they are in their late 20s or at 30--or 
do we want a world where getting married at 24 or 25 would work 
for people?
    So, I do think--and Ron makes this point--that the 
causality, about how the economy has changed, how that has 
affected people's choices, and how the culture has changed--and 
I would add incarceration, because, when I talk to young 
women--I still remember conversations--people would say, ``We 
cannot get married, because it means providing for somebody 
else.''
    And so, I do think that it is important to note that the 
solutions out there--I think the evidence--the research 
evidence about what has shown success, in terms of marriage 
rates, is about dramatic economic improvements and jobs--and I 
do think reforms in incarceration would be helpful----
    Chairman Johnson. With incarceration, that is a chicken-
and-egg type of situation, because Mr. Ochs is talking about 
how the primary reason that you are hearing people give about 
why they are in prison--they kind of attribute it to the fact 
that they did not have a father in the home.
    Ms. Golden. Well, I think, in general, poverty for young 
kids is a chicken-and-egg phenomenon.
    Chairman Johnson. I am asking Mr. Ochs.
    Ms. Golden. Sorry.
    Chairman Johnson. Was that, basically----
    Mr. Ochs. Yes, definitely. And, I think part of the 
success----
    Chairman Johnson. So, the breakdown of the family could 
result in higher crime rates, which would lead to higher levels 
of incarceration. I mean, it really is a chicken-and-the-egg 
type of thing.
    Ms. Golden. And, researchers tried----
    Chairman Johnson. I want to talk about other unintended 
consequences.
    A little story from my own experience. We, as our business, 
used to employ people--what we called, in Wisconsin, Huber Law. 
But, people there are serving time. And, unlike moving our 
plant into the prison, we would bring the prisoners. And, 
oftentimes these were from the county jail. And, oftentimes, 
they were people who had served a longer sentence and this is 
what they were doing the last 6 months to a year--an incredibly 
successful program.
    From my standpoint, there were a number of lives that were 
turned around with that. But, then, social justice advocates--
putting pressure on the big companies--that come in and audit a 
manufacturer, like myself, found out that we were actually 
employing people from prison labor. And, they felt that was 
some sort of forced servitude. And so, in order for us to 
maintain those contracts, we had to stop doing that. I mean, 
think of that. Again, a very negative unintended consequence 
from social justice advocates--did not really help people, 
whatsoever.
    Part-time work. How many different programs, Dr. Woodson, 
are there, in the Federal Government, which incentivize 
employers not 
to have full-time workers, because once--this gets back to 
over-regulation. Once you go above 20 hours a week, once you 
are--Obamacare side effect, correct? How many manufacturers now 
are--or businesses, in general, are not going above 50 
employees, because of all of these government programs and 
regulations that prevent that? Does anybody want to speak to 
that?
    Mr. Woodson. I do not have an answer for that.
    Chairman Johnson. Mr. Ochs.
    Mr. Ochs. Now, we employ several hundred people, so we are 
above the 50. But, that has been a definite deterrent to going 
above 50 people. And, you had asked the first question--I am 
sorry--related to----
    Chairman Johnson. I am just talking about unintended 
consequences, right now.
    Mr. Ochs. Yes.
    Chairman Johnson. Part-time work--Huber Law. Do you have a 
program like that, in Kansas?
    Mr. Ochs. Yes, we call it work-release. And, that is still 
alive and well in Kansas. We started with work-release and then 
moved from the work release into the prison.
    Ms. Golden. And, we have talked a lot, with employers, 
about scheduling because, as we talked about earlier, part-time 
work is a huge challenge for families. And, increasingly, with 
technology, it is not just part-time, but part-time with no 
notice about schedules or hours. And, I think what we hear from 
employers is not--and I think this is consistent with the 
research--not about regulation, but about choices that they 
have made, perhaps, without thinking through always----
    Chairman Johnson. Trust me--regulation is a big component 
here. I mean, trust me--I know, firsthand, and I talk to a lot 
of people.
    Ms. Golden. Sure. And, we talk mostly to retail, health 
care, and those sectors. We have not talked as much with the 
manufacturing industry, because the part-time issues are very 
intense in the retail sector, for example.
    Chairman Johnson. Dr. Haskins, you talked about--give 
people money, they will be less poor. I think that is one of 
the debates, when you are talking about poverty rates--people 
in poverty--out of poverty. Do you tack on the transfer 
payments that they are getting, in terms of the assistance? All 
of a sudden they are out of poverty. I think the better 
definition would be out of poverty and out of dependency.
    From my standpoint, I thought the goal of the ``War on 
Poverty'' was to not just give people money, so they have--so, 
based on the total amount of take, not just that they are not 
at the poverty level anymore, but that you actually move them 
out of poverty. You make them independent. Can you just comment 
on that?
    I mean, by the way, is that not the better goal--to get 
people to become independent?
    Mr. Haskins. Yes, it is a much better goal. Yes, I do not 
have any problem with the goal, but the problem is that we have 
so many people--OK, think that we have--half of our children, 
at some point, are going to be in a female-headed family, all 
right? Not at any point in time, but over time.
    So, would you rather have them on welfare or not have them 
have any public support? Or, would you rather have public 
programs that are now bipartisan, in the sense that they 
strongly emphasize work and then they subsidize work, because 
those mothers often have limited skills and limited work 
experience--and the most they can make is $10 an hour or so--
but, because they get subsidies from the Earned Income Tax 
Credit--which they only get if they work--that it brings their 
income up and it allows them to escape poverty?
    I would rather have them earn enough so that they can 
completely escape poverty without public benefits, but we do 
not have enough jobs like that. So, I think this is a 
reasonable transitional thing. Hopefully, when they get older, 
they will develop skills and experience and they can get better 
jobs.
    Chairman Johnson. Well, let us talk about the minimum wage. 
There is a proposal out there for a $15 an hour minimum wage. 
President Obama is recommending $10.10. CBO, evaluating his 
proposal, thought it would cost somewhere between half a 
million and a million jobs. The study shows that $15 an hour 
would cost 6.6 million jobs by the end of the decade.
    That is a real problem. I know Andy Pudzer, the Chief 
Executive Officer (CEO) of Carl's Jr., is writing an awful lot 
of articles talking about how that is actually affecting--where 
it has been put in place, how it is actually affecting, for 
example, fast-food restaurants. People are coming and they are 
saying, ``You have to cut my hours, because my income is coming 
up to that point and I am losing benefits.''
    I mean, is that not really the real-world result of that 
type of thing?
    Ms. Golden. We have actually been writing on that question, 
because, in fact, you do need the minimum wage increase and the 
benefits for people. And, we have actually----
    Chairman Johnson. Does that not bother you--a study that it 
would cost 6.6 million jobs? So, if you have----
    Ms. Golden. I think it is not consistent with the----
    Chairman Johnson. It does not bother you?
    Ms. Golden. I think it is not consistent with the bulk of 
the research. I think, one of the things that the research 
suggests is that increases for some of the particular groups we 
have focused on today--low-wage mothers, poor families, etc.--
and I think, on the question of benefits, we have actually been 
looking at that in a couple of places. And, typically, again, 
if you have more income, you are not going to need quite as 
much, in the way of your childcare subsidy. And so, the two 
things will work together and will help reduce the public 
investment, somewhat. But, people, depending on their 
circumstances, will still need help.
    Chairman Johnson. Do you know what the average profit, per 
employee, in a fast-food restaurant is?
    Ms. Golden. In what jurisdiction? In general?
    Chairman Johnson. Just nationally.
    Ms. Golden. I do not know the national number, no.
    Chairman Johnson. It is $6,300, per employee. That means, 
if you take a 2,000-hour--over the course of a year--work week, 
that is a $3 increase. So, just increasing the minimum wage, in 
a fast-food restaurant, by $3, you wipe out the profitability. 
That does not work for business.
    Ms. Golden. Yes, I think we find that businesses vary in 
their perspective on that----
    Chairman Johnson. If you increase----
    Ms. Golden [continuing]. And, that ``high road'' employers 
think that the investment is worth it, in terms of less 
turnover and more success. But, I know there are many different 
perspectives on that subject.
    Chairman Johnson. Yes. I just have a real concern when you 
start having the Federal Government get involved in any 
marketplace--again, the law of negative unintended 
consequences, which I think that chart proves as well.
    I think I have pretty well covered the points I wanted to 
make. I will just give everybody a chance to conclude. We will 
start with you, Dr. Golden. And, we will kind of walk down. 
Just give kind of a minute summary.
    Ms. Golden. Well, thank you.
    First of all, I am extraordinarily pleased that the 
Committee is focusing on poverty. And, to hear the 
conversation--Mr. Ochs' commitment on prison issues. There is 
just a lot to work on here.
    I think I would highlight the successes of the safety net--
that, when you look at the actual effects, with the right 
numbers, you see poverty cut in half. And, I would highlight 
the multigenerational, positive effect that result when 
children get nutrition, health care, and income through the 
Earned Income Tax Credit--when they are not going hungry. There 
is now a lot of rigorous research showing that that has effects 
down the road.
    And so, to me, the crucial things to do next are: to focus 
in on young children, to focus in on workforce training, 
development, and opportunities to move up, to fill some key 
gaps in the safety net, to improve job quality--not just wages, 
but also scheduling--and to make sure, in terms of post-
secondary--what I think, actually, you were talking about--the 
need for credentials that employers can use, for example, in 
manufacturing. I actually would share that as an important 
goal--and something we should work on.
    Chairman Johnson. OK, thank you. Dr. Haskins.
    Mr. Haskins. Again, I agree. Thank you for holding this 
hearing. It is very important for Members to hear all sides of 
these arguments.
    I did not talk about prisons, but I am glad that came up. 
That is an extremely important topic. It is one of the biggest 
disadvantages that black males face. In fact, there is now a 
huge amount of research literature showing that black males 
respond much more poorly to living in a single-parent family 
than daughters do. So, black males have this disadvantage piled 
on disadvantage. And, helping them with prison, especially by 
keeping them out--if we can, giving them shorter sentences, and 
helping them when they get out--the very kind of thing Mr. Ochs 
just talked about--it is very important.
    I want to emphasize that I still think the very best thing 
that we have done to reduce poverty, especially amongst single 
moms, is to have strong work requirements, and then, to 
subsidize their income with the Earned Income Tax Credit, 
daycare assistance, and the system that we have already put in 
place.
    I do not think we have talked enough about birth control. 
We now have highly successful methods of birth control. If 
young women can avoid pregnancy--which they say they want to--
and even if they have babies out of wedlock later, they will be 
older, they will be more skilled, and they may have a better 
job. There are all kinds of advantages. Birth control is going 
to be a big part of the solution, I think.
    And, finally, I want to emphasize, once again, we can learn 
a lot. We are learning a lot, now. We will learn a lot more in 
future years. We have priceless data, in various Federal 
systems and Agencies--and from the Census Bureau--that, if we 
could analyze that data--because we have better access and 
Congress has made it easier for researchers to study it--we 
will learn a lot and it will be helpful in reducing poverty.
    Chairman Johnson. And, first of all, information, which we 
are trying to provide here, is powerful. Birth control--I am a 
cosponsor of the--over-the-counter prescriptions. I think those 
things are key.
    And, you are right. The impediments we have put in place 
for people that are formerly incarcerated is just--I know Dr. 
Woodson talked about a number of them. There are so many more. 
I mean, there are just so many more. We really need to address 
that. I am an original cosponsor of the Fair Chance to Compete 
for Jobs Act of 2015, to ``ban the box'' as well.
    So, Mr. Ochs.
    Mr. Ochs. Three things. If you want to end poverty, create 
jobs. And, if you want to create jobs, incentivize small 
businesses to do that. So, I would encourage you to lower 
taxes. Our effective tax rate is north of 40 percent. If you 
gave me another 10 percent or 15 percent, we would roll that 
back into growing the business and creating more jobs.
    Chairman Johnson. You figure you are paying your fair 
share.
    Mr. Ochs. Yes.
    Chairman Johnson. Yes.
    Mr. Ochs. And, reduce the amount of regulation. It is 
stifling.
    Chairman Johnson. It is. Dr. Woodson.
    Mr. Woodson. I think we need to look to a new source of 
information and new experts. With all due respect to my 
colleagues from the left and the right, who come together in 
academic institutions and define themselves as being the 
premier poverty experts, that is a misnomer. I think the real 
experts are the people who are in those communities that are 
the anomalies and who demonstrate that they are in poverty, but 
not of poverty.
    So, we need to recognize a new group of experts, who are 
solely focusing on studying capacity and studying people who 
are achieving against the odds. They are the source of new 
information that can help us find a way out of poverty. We must 
provide recognition and support for the real poverty experts--
and those who live in the same cultural and geographic zip code 
as those experiencing the problem--and empower them to achieve 
it.
    Chairman Johnson. Well, thank you, Dr. Woodson. And, by the 
way, we will be giving our other witnesses your book. And, I 
think they will see some of those wonderful examples----
    Mr. Woodson. I doubt it.
    Chairman Johnson [continuing]. Of wonderful people helping 
change people's lives, one person at a time.
    So, again, I want to thank all of the witnesses. I enjoyed 
the hearing. I hope you did as well.
    This hearing record will remain open for 15 days, until 
July 7 at 5 p.m., for the submission of statements and 
questions for the record.
    This hearing is adjourned.
    [Whereupon, at 11:57 a.m., the Committee was adjourned.]

                            A P P E N D I X

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