[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
REFORMING TEMPORARY ASSISTANCE FOR NEEDY
FAMILIES (TANF):
STATES' MISUSE OF WELFARE FUNDS
LEAVES POOR FAMILIES BEHIND
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HEARING
BEFORE THE
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 24, 2024
__________
Serial No. 118-FC32
__________
Printed for the use of the Committee on Ways and Means
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
__________
U.S. GOVERNMENT PUBLISHING OFFICE
57-168 WASHINGTON : 2025
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COMMITTEE ON WAYS AND MEANS
JASON SMITH, Missouri, Chairman
VERN BUCHANAN, Florida RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona JOHN B. LARSON, Connecticut
DARIN LAHOOD, Illinois EARL BLUMENAUER, Oregon
BRAD WEINSTRUP, Ohio DANNY DAVIS, Illinois
JODEY ARRINGTON, Texas LINDA SANCHEZ, California
DREW FERGUSON, Georgia TERRI SEWELL, Alabama
RON ESTES, Kansas SUZAN DELBENE, Washington
LLOYD SMUCKER, Pennsylvania JUDY CHU, California
KEVIN HERN, Oklahoma GWEN MOORE, Wisconsin
CAROL MILLER, West Virginia DAN KILDEE, Michigan
GREG MURPHY, North Carolina DON BEYER, Virginia
DAVID KUSTOFF, Tennessee DWIGHT EVANS, Pennsylvania
BRIAN FITZPATRICK, Pennsylvania BRAD SCHNEIDER, Illinois
GREGG STEUBE, Florida JIMMY PANETTA, California
CLAUDIA TENNEY, New York JIMMY GOMEZ, California
MICHELLE FISCHBACH, Minnesota STEVEN HORSFORD, Nevada
BLAKE MOORE, Utah
MICHELLE STEEL California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio
Mark Roman, Staff Director
Brandon Casey, Minority Chief Counsel
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C O N T E N T S
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OPENING STATEMENTS
Page
Hon. Jason Smith, Missouri, Chairman............................. 1
Hon. Richard Neal, Massachusetts, Ranking Member................. 3
Advisory of September 24, 2024 announcing the hearing............ V
WITNESSES
Sam Adolphsen, Policy Director, Foundation for Government
Accountability................................................. 4
Brett Favre, Sumrall, Mississippi................................ 20
Matt Underhile, Shift Supervisor, Stoddard County Sheriffs
Office, Bloomfield, Missouri................................... 25
Jarvis Dortch, Executive Director, American Civil Liberties Union
(ACLU) of Mississippi.......................................... 29
PUBLIC SUBMISSIONS FOR THE RECORD
Public Submissions............................................... 295
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REFORMING TEMPORARY ASSISTANCE
FOR NEEDY FAMILIES (TANF):
STATES' MISUSE OF WELFARE FUNDS
LEAVES POOR FAMILIES BEHIND
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TUESDAY, SEPTEMBER 24, 2024
House of Representatives,
Committee on Ways and Means,
Washington, DC.
The committee met, pursuant to call, at 10:18 a.m., in Room
1100, Longworth House Office Building, Hon. Jason Smith
[chairman of the committee] presiding.
Chairman SMITH. The committee will come to order.
Under the House Republican majority, this committee has
been laser-focused on helping Americans in need and in
particular doing so by helping them build stable, prosperous
lives through work. That is the very core of our work to
improve our welfare programs, including TANF.
We took an important first step to reform TANF direct cash
assistance in the Fiscal Responsibility Act. For the first time
in two decades, Congress acted to close loopholes States were
using and strengthen work requirements.
Unfortunately, TANF nonassistance, which makes up 77
percent of the spending in the program, has been undermined by
rampant waste, fraud, and abuse, meaning fewer dollars are
going to services for those who really need them.
For example, in the state of Mississippi, $77 million in
misused TANF funds led to multiple criminal convictions for
embezzlement by state officials and nonprofit contractors. But
we all know this problem is not limited to Mississippi.
In Michigan, millions of dollars in TANF funds were spent
on college aid for families making up to a quarter of a million
dollars to attend primarily private colleges.
In California, the state used federal TANF funds to plug
holes in their state budget.
We could go around the country and identify examples of
other states using TANF funds for reasons other than its four
core purposes.
One of the things that has enabled the misuse of funds is a
lack of guardrails that connect taxpayer dollars to people who
are actually in need. Unlike other federal programs, there are
virtually no rules governing how states spend TANF
nonassistance funds. There is no eligibility limit to target
TANF to families in need. There is no requirement to ensure
TANF nonassistance is being used to support work, training, and
education activities. In fact, only 8.1 percent was spent on
these activities in 2022.
TANF has no spending deadlines, so States are sitting on
billions in unspent reserves reaching $6.4 billion in 2022. How
big a problem is it? What is the rate of improper payments? No
one knows because the U.S. Department of Health and Human
Services has never reported a rate of improper payment.
Together, this lack of federal protections has created the
perfect storm for waste, fraud, and abuse. The victims aren't
just taxpayers, but also the Americans in dire straits who need
help. That is why one of our priorities must be restoring
integrity and accountability to TANF.
Republicans and Democrats on this committee have both
expressed concerns about the ongoing fraud and questionable use
of funds in this program, and they have introduced legislation.
Some of the Democrat policies are not that far from Republican
policies, and the Biden-Harris Administration has proposed
Republican ideas like reporting improper payments and targeting
TANF to families earning less than 200 percent of the federal
poverty line.
I believe there is room for bipartisanship, but my priority
as chairman is to make sure in our push for reform, we don't
turn welfare into a mechanism that traps people in poverty or
to lose the ability to tailor programs to the unique needs of
local communities and families. Those are important principles
of TANF that made it successful in 1996 and should be a
foundation that we build on.
I want to thank our witnesses for taking the time to be
here and sharing their insights.
In particular, we are honored to be joined by someone from
my congressional district, Mr. Matt Underhile in Stoddard
County. He is a living example of what can happen when welfare
programs help people find full-time employment that supports a
family, and the spillover effects it has for building strong
communities right there in Stoddard County.
I want to thank you for traveling to Washington from God's
country, as we say back home, and I look forward to you sharing
your story with us today.
We are also joined by someone whose experience I think can
help shed additional light on the need to pursue reforms to
States' ability to spend TANF, Mr. Brett Favre. We look forward
to hearing his insights into how weak federal oversight and
self-dealing state officials contributed to Mississippi's case.
He saw how embezzlement and mismanagement hurt the people whom
welfare is supposed to help. We want to thank you for coming
here and using your name and platform to draw attention to the
need for stronger federal safeguards in TANF spending to ensure
what happened in Mississippi doesn't happen again in other
places.
I am grateful to each and every one of you for coming to
share your perspective on how Congress can reform TANF. We must
reclaim these critical welfare dollars and restore the
integrity of this important program to focus on removing
barriers to work and building the capacity of individuals to
realize their full potential and thrive.
I am pleased to recognize the ranking member, Mr. Neal, for
his opening statement.
Mr. NEAL. Thank you, Chairman.
And I want to thank our witnesses for being here with us
this morning.
When they are able to receive it, TANF can play an
important role in making ends meet each month for families with
children across the country. Bridging the gap on affording
basic necessities while helping parents and other caregivers
find meaningful work and build a better live is a shared goal.
Unfortunately, less than one in four poor families get
assistance from TANF nationally, and many states offer even
smaller benefits.
We are reminded that TANF is supposed to be a trampoline.
People hit it at a difficult time in their lives, never
anticipating perhaps that they would need it, and then they
bounce back up.
I would note, also, many of the economic policies that the
Democrats on this committee embraced have worked splendidly,
including a very arcane part of our economy called labor
participation rates, which have gone up. It means that people
who can work want to work and will work, and that is part of
what I hope we will hear in testimony this morning as well.
This Congress is ending as it began, the will of the
wealthy and the well-connected stands out over our most
vulnerable American families. The only TANF legislation we
considered in committee was H.R. 6918 which allowed states to
divert funds intended for needy families to fund antiabortion
centers. We are just days away from not only a government
shutdown, but also the expiration of the TANF program, and the
committee is lending our platform to a subject that is often
involved in the most dramatic misuse of TANF funds.
Let me also say something based on long institutional
memory when we talk about the shortcomings of what happened in
this Congress. Again, last evening, the Speaker of the House
cannot get a rule through a committee that the leadership
picked. It is an astounding turn of events. So our CR will be
put on the suspension calendar.
So today there is going to be a lot of outrage over a
program that has been repeatedly exploited with no
accountability for how it got that way. The Republican authors
of the original TANF bill sought deliberately preventing
federal oversight of TANF, and it came as the request from
House Members and Governors.
In Mississippi, 396,000 families and about 632,000 children
accessed our expanded child credit in 2021, whereas, at the
same time, only 2,000 families accessed TANF. It is stunning.
The child credit worked, and I know there is sympathy and
understanding on this committee for expanding the child credit.
It is still a failure to come to the aid of the poorest among
us when it expired.
Democrats stand ready to work with Republicans to provide
oversight authority and return the misspent funds for poor
families that need financial help. In fact, Ranking Member
Davis, a lifelong champion of our nation's most vulnerable
workers and families, and another champion, Congresswoman Chu,
are leading legislation to replace a Republican provision in
the original law that allowed malfeasance in Mississippi to
happen with penalties and requiring States to recover misspent
funds and direct them to their intended audience for children.
Another champion on the committee is Congresswoman Moore,
who through her lived experience knows better than anyone about
holding those in power accountable as we try to help struggling
families.
We have a clear, proven pathway to help struggling families
restore the expanded child credit, guaranteed childcare, unlock
access to paid family and medical leave. Those would be three
good starts.
Today, we are being asked to choose a false dichotomy. I
hope that we will understand that the policies that we will
hear about today were badly unbalanced.
And with that, I yield back the balance of my time.
Chairman SMITH. Thank you, Ranking Member Neal.
I will now introduce our witnesses.
We have Sam Adolphsen, who is the policy director for the
Foundation for Government Accounting. We have Brett Favre, who
is a former pro football player from Sumrall, Mississippi. We
have Matt Underhile, who is a shift supervisor at Stoddard
County Sheriff's Office in Bloomfield, Missouri. And we have
Charles Dortch, executive director of the American Civil
Liberties Union of Mississippi.
I want to thank you all for being here today. Your written
statements will be made part of the record. And you each have 5
minutes to deliver remarks.
We will start with Mr. Adolphsen. You may begin when you
are ready.
STATEMENT OF SAM ADOLPHSEN, POLICY DIRECTOR, FOUNDATION FOR
GOVERNMENT ACCOUNTABILITY
Mr. ADOLPHSEN. Chairman Smith, Ranking Member Neal, and
members of the committee, my name is Sam Adolphsen. I am the
policy director at the Foundation for Government
Accountability. Before I joined FGA, I oversaw TANF as the
chief operating officer of the Maine Department of Health and
Human Services.
Cash welfare was once broken in this country, so broken, it
led to something pretty extraordinary, successful bipartisan
reform. And when President Bill Clinton said it was time to end
welfare as we knew it, this body acted and made it happen, at
least in this program. And this committee knows the story of
that success well, increased incomes, decreased poverty, and
less spending. And it clearly understands how important it is
to protect that success by acknowledging the remaining problem
areas in the program.
The program has drifted from the core mission of getting
people back to work, and it is clear that stronger guardrails
are needed to reverse this trend. Fraud and waste is a problem
in the program. Issues like EBT card skimming and selling, and
theft of TANF funds by administrators in several States
continue to plague the program.
It is hard to gauge the exact scope of fraud because as the
GAO pointed out this summer, Health & Human Services doesn't
measure it. And the few special OIG reports that we do have
show rates of improper payments up to 46 percent. Misallocation
is an issue, too. The combination of flexibility, carryover
funds, and commingling with other funding often leads to, at
best, questionable spending.
For example, more than 40 States spend TANF on programs
with eligibility levels twice the Federal poverty line. In
Maine, I saw this firsthand when we ultimately reversed some
TANF transactions after struggling to get clear answers from
the Obama administration on how funds could be used for certain
services.
And there is blatant misuse as well. Some States are
spending billions of TANF dollars as a slush fund to pay for
college tuition programs, universal basic income projects, or
tax credits in lieu of using State general funds. At least one
State isn't shy about publicly calling this a fund swap.
These issues need attention, but it isn't just about fraud,
or misspending, or misallocation. It is also about missed
opportunities, missed opportunities to use TANF in the best way
possible for work, to fulfill the core program objectives, to
help millions more people achieve the American dream. When only
one out of every $10 is spent on that mission today, we know
there is a missed opportunity. When so many States are falling
short of meeting worker participation rates, we know States
aren't doing their best. And when the program spends more on
administration than it does on key objectives, we know we can
do better.
Discussions about caseload size too often center entirely
around those receiving a cash benefit, but there are tens of
millions of able-bodied adults in welfare programs across the
country who could benefit from case management, family support,
and job training, the precise type of programs TANF is meant to
fund.
It makes sense, then, to rebalance spending back towards
work with additional guardrails like ensuring a baseline amount
is spent on work activities and supports. And the program does
need more oversight. A good start would be to reserve funds for
those below certain income levels, measure improper payments
within the program, just like other welfare programs do, and
increase required State accountability for performance and
spending.
With some reform and a renewed focus, we can make sure that
TANF is the premier welfare-to-work-program that it was always
meant to be.
Thank you.
[The statement of Mr. Adolphsen follows:]
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Chairman SMITH. Thank you.
Mr. Favre, you are now recognized.
STATEMENT OF BRETT FAVRE, SUMRALL, MISSISSIPPI
Mr. FAVRE. Chairman Smith, Ranking Member Neal, members of
the committee, my name is Brett Favre, and I very much
appreciate the opportunity to testify here today.
I was born and raised in Mississippi. My parents were
schoolteachers. I played football for Southern Miss and
professionally for 20 years and was inducted into the Pro
Football Hall of Fame.
Since I retired from football, I have engaged in various
business enterprises and endorsed products I believe in, and,
with my wonderful wife, Deanna, helped many charities in my
home State and elsewhere.
Throughout my career there were many highs and many lows.
Those lows helped me find out who I really am. They taught me
to persevere, overcome challenges, and succeed. But the
challenges my family and I have faced over the last 3 years
because certain government officials in Mississippi failed to
protect Federal TANF funds from fraud and abuse and are
unjustifiably trying to blame me, those challenges have hurt my
good name and are worse than anything I faced in football.
When this started, I didn't know what TANF was. Now I know
TANF is one of the country's most important welfare programs to
help people in need. This is a cause dear to my heart and to
Deanna's, as we have our own Favre 4 Hope Foundation to help
disadvantaged children.
In 2020, Mississippi claimed that $77 million in TANF funds
had been misspent resulting in criminal convictions of State
officials and people running a nonprofit which had received
these funds. This nonprofit had a long-standing partnership
with the State and an impeccable reputation.
Mississippi also brought a civil lawsuit against numerous
individuals, including me. The gag order bars the parties from
discussing the specifics of the lawsuit. Instead, I am here to
share what I've now seen up close about how reforms are needed
to stop the misspending of TANF funds.
Even before I was sued, when I was informed that the
nonprofit appeared to have improperly used TANF funds, I
returned to the State the funds I had received. Even though I
had provided services to the nonprofit and even though I knew,
and I know, I had done nothing wrong, I returned the funds, no
questions asked.
I had also offered to help raise funds for a new volleyball
facility at Southern Miss, yeah, the one that has gotten all
the publicity. I wanted to help my alma mater and benefit the
community. Southern Miss introduced me to the nonprofit to see
if they could help with the funding. I had no way of knowing
that there was anything wrong with how the State funded the
project, especially since it was publicly approved by many
State agencies and multiple attorneys, including the Attorney
General.
Sadly, I also lost an investment in a company that I
believed was developing a breakthrough concussion drug I
thought would help others. And I am sure you will understand,
while it is too late for me, because I have recently been
diagnosed with Parkinson's, this is also a cause dear to my
heart. Recently the doctor running the company pleaded guilty
to taking TANF money for his own use.
I believe that I got swept up in a civil lawsuit at the
instigation of State Auditor Shad White, an ambitious public
official, who decided to tarnish my reputation to try and
advance his own political career, even after he applauded me
for returning the funds and said there was no evidence that I
knew TANF funds were involved. And, strangely enough, Shad did
not bring the TANF misuse issue to the Department of Justice,
but to a local DA, who himself is now under Federal and
criminal investigation.
He has profited from his position as someone with firsthand
knowledge of the Mississippi case. But when my lawyers wanted
to question him under oath, he swore he had no personal
knowledge of the events. I have now sued Shad for defamation in
a case upheld by the Court. Most recently the Mississippi
Attorney General has even sued Shad for exceeding his powers in
going after me.
I have also learned that the State, believe it or not, is
using TANF funds to pay outside private lawyers, Adam Stone and
Kaytie Pickett of the Jones Walker firm, to sue me and others.
Those same lawyers before they sued me came to my hometown to
try to convince me to retain them in this very dispute. I also
understand that those same lawyers 3 years ago never even
interviewed witnesses before they sued me and rejected a
settlement offer from Southern Miss to resolve this dispute
early on through scholarships for TANF-qualifying students, a
settlement that would have shut off the flow of TANF funds to
the lawyers.
Importantly, I have learned that nobody was or is watching
how TANF funds are spent. Our laws don't sufficiently protect
against TANF spending unrelated to helping people out of
poverty. States have too much flexibility on how they spend
this money, which leads to waste and abuse. We need mechanisms
for oversight of TANF spending and greater clarity as to
permissible uses of TANF funds. Democrats and Republicans
should agree. Rampant State misuse of TANF funds is hurting
efforts to help vulnerable families and children.
And I was told the Ways and Means Committee was working on
this problem, so I was willing to speak to you to encourage
Congress to reform this important antipoverty program, and I
urge Congress to put TANF guardrails in place to ensure that
what happened in Mississippi doesn't happen again.
I urge Congress to pass the TANF reforms included in the
committee member bills, reforms designed to target funds to
those truly most in need, to help low-income Americans find and
keep a job, to limit how States can spend TANF grants and
reduce wasteful bureaucracy, and to protect taxpayer funds from
fraud and abuse.
And in closing, thank you Chairman Smith and Ranking Member
Neal.
[The statement of Mr. Favre follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you.
Mr. Underhile, you are now recognized.
STATEMENT OF MATT UNDERHILE, SHIFT SUPERVISOR, STODDARD COUNTY
SHERIFF'S OFFICE, BLOOMFIELD, MISSOURI
Mr. UNDERHILE. Thank you, Chairman Smith, Ranking Member
Neal, and members of the committee. I am Matt Underhile. I am
47 years old, husband to Leta, father of seven children. I work
as a corrections officer at Stoddard County Sheriff's
Department and just accepted a position with the FCC, Family
Counseling Center, and I would like to share my story of how
TANF funding has changed my life.
As a freshman in high school, I lost both of my parents to
cancer, quickly dropped out of school, fell into a life of
drugs and violence. I was homeless for about a year, worked
inconsistent jobs in construction and jobs for cash, sold
drugs, and had no employment benefits. During this 17 years, I
struggled to pay child support payments and support my family.
It is not a life I am proud of. At my rock bottom, I was
invited to a graduation for my best friend's son, which I have
known since birth. When I showed up, I was so high that he told
me that it was best that I leave. That made me start rethinking
my life choices. I didn't go to rehab, but I stopped using and
stopped running around with the people that were bad influences
on me and my life. I met my wife Leta, married her a year
after, and she helped me become a better person, and live a
life that her and I could both be proud of.
I found out about the Missouri Excel Center program on
Facebook. My wife and I agreed that I would earn my high school
diploma and she would work to support the family. I started
class in March of 2019. The Missouri Excel Center helped me
restart, and I graduated a year later. I participated in things
like SkillUP. They offered me transportation money to help me
get back and forth to school because I was driving 60 miles
round trip.
The SkillUP program and the Excel Center offered all kinds
of employment-driven opportunities to students. They have
classes that teach you how to be a good employee, what
employers are looking for, and soft skills, like what to wear,
how to communicate, how to advocate for yourself.
My SkillUP specialist put on a career day where local
businesses came to the school, presented to students what
employment at their business would look like, what they were
looking for in employees, and how to get the job and be a good
employee. She designed it to where the students would be able
to apply for the position on the spot, interview, get hired at
these businesses.
She was also active in the community. If a student needed
steel toe shoes, scrubs, or anything like that that would help
their employment, SkillUP would purchase these items to help
relieve the burden of expense, and work to go to training.
While at the Excel Center, I also participated in Coffee
Club put together by the school and SkillUP where graduates
would get together and discuss what was going on in their lives
and provide support and encouragement and networking after you
graduated.
You are always encouraged to go back. If life gets too
hard, you need to talk to somebody, they are there for you. If
you have trouble finding a job, they will help you.
SkillUP helped me figure out how to dig myself out of a
hole. When I went to register for FAFSA for college, I found
out that I had not registered for Selective Service because I
was homeless at the time, and my SkillUP specialist found a way
and helped me write a letter explaining my circumstances, and
they approved for me to receive FAFSA funds to go to college.
I then got a job as a corrections officer, where I am now
working. I also work with local drug court doing UA's for the
males, and I have discovered through this journey that I enjoy
helping others. And I have learned through SkillUP and the
Excel Center that there is always ways to remove any barrier
you may have, that there are people, programs that can take
care of you and help you.
Thank you.
[The statement of Mr. Underhile follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you.
Mr. Dortch.
STATEMENT OF JARVIS DORTCH, EXECUTIVE DIRECTOR, AMERICAN CIVIL
LIBERTIES UNION (ACLU) OF MISSISSIPPI
Mr. DORTCH. Chairman Smith, Ranking Member Neal, members of
the committee, thank you for this opportunity.
Through my statement, I hope to relay three points to the
committee. First, the State of Mississippi took advantage of
lax Federal guidelines to make it nearly impossible for poor
families to receive help, leaving millions in welfare funds to
be wasted or stolen. Second, after the largest embezzlement
scandal in State history, little in Mississippi has changed.
Third, Mississippi families can only look to Congress through
reform assistance. Whatever those reforms may be, know that
Mississippi is not an example of what works.
Beginning in 2016, while a member of the Mississippi
legislature, I talked with several advocates and constituents
concerned with the lack of transparency within the agency that
administers TANF, the Mississippi Department of Human Services,
MDHS. I also quickly learned that being a legislator did not
entitle me to useful information from MDHS.
However, there were a few things that we did know. We knew
MDHS rejected nearly every applicant for cash assistance. In
2012, the State's TANF approval rate dropped from 35 percent to
2.8 percent. In April of 2021, in the middle of COVID, the
entire adult caseload reached its lowest mark, just 140
individuals.
We knew MDHS refused to spend welfare funds, yearly
foregoing between 30 and 40 percent of its TANF grant. We also
knew that MDHS outsources TANF programs to a nonprofit director
named Nancy New. New received over $50 million to operate her
Families First for Mississippi initiative.
In May of 2019, I wrote a letter received by the Federal
Department of Health and Human Services stating, ``Neither MDHS
or Families First has provided the public with the program's
budget priorities for deliverables and outcomes,'' end quote.
HHS responded that Mississippi's TANF expenditures were
allowed, and further scrutiny was unnecessary.
However, a few months later, New and the former MDHS
director were arrested and have since pleaded guilty to
misspending welfare funds. Following their arrest, we finally
learned in detail how Mississippi spent welfare dollars. This
isn't an exhaustive list, but millions were paid for cars,
vacations, and real estate; over $2 million went to a
professional wrestler aptly nicknamed, ``The Million Dollar
Man''; $9,500 a month paid the mortgage on a horse ranch owned
by a former professional football player; and we really love
our football in Mississippi, so the State paid another
professional football player over $1 million to compensate him
for appearance fees, promotions, and autographs.
Nearly 5 years later, little has changed. Lawmakers have
passed zero bills addressing the scandal. In fact, there have
been zero hearings in the Mississippi legislature on TANF.
Along with the embezzlement of millions of dollars,
lawmakers went after TANF recipients who receive, at most, $170
a month. Just weeks after the arrest the legislature passed a
bill allowing the State to audit the tax returns of the
families that received TANF and other public benefits.
So, of course, the cash assistance denial rate remains
above 90 percent, reaching just 0.06 percent of impoverished
Mississippi adults.
Mississippi continues hoarding TANF money with $145 million
in unallocated funds. Subgrantees still receive awards up to
$35 million a year. Despite MDHS tasking these grantees with
providing workforce training, school programs, and mentorship,
the current MDHS director has stated that his agency does not
track the outcomes of these funded programs. When a legislator
asked for subgrantee performance data, the director stated,
quote, ``You are asking me for information that doesn't
exist,'' end quote.
Mr. Chairman, I applaud you and your committee's commitment
to ensuring TANF helps the people that need it, but please
remember that many of Mississippi's former and current spending
decisions are allowed because of TANF's weak Federal
guidelines. That must change.
Congressman Danny Davis, Mississippi Congressman Bennie
Thompson, and others on this committee have proposed
legislation that penalize States that misspend TANF funds and
require those States to allocate more funding towards cash
assistance. That legislation would enforce Mississippi to make
real change to its TANF program.
Most importantly, Congress must assure that individuals and
families in need have the cash resources to survive. The
expanded child tax credit cut in half the number of
Mississippi's Black children living in poverty. Last summer,
members of the Work and Welfare Subcommittee learned of the
success of the Magnolia Mother's Trust, a program that provides
$1,000 a month to moms in poverty without restrictions.
These programs are clear evidence that direct cash
assistance, absent Mississippi's paternalistic red tape, can
effectively lift families out of poverty.
Mr. Chairman, when the committee considers reforms to TANF,
please ask this question: Would this policy change or prevent
what has and what continues to happen to Mississippi?
Again, thank you for this opportunity, and I look forward
to answering any questions.
[The statement of Mr. Dortch follows:]
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Chairman SMITH. Thank you all for your testimony.
We will start with the question-and-answer portion.
Mr. Favre, when we previously spoke, you said something
that really stuck out to me. You said before all of this you
didn't know what TANF money was. And it is quite interesting,
right before this hearing, I was with a group of lawmakers, and
they asked, `why is Brett Favre testifying before your
committee today?'' And I said, ``to talk about TANF and the
abuses in TANF.'' And that Member of Congress asked me, ``what
is TANF?'' That Member of Congress: ``what is TANF?'' And I had
to explain it was a welfare program that was created in 1996.
And so, I imagine that 99 percent of Americans don't know what
TANF is. And for them, that statement would ring very true.
And so as this committee considers reforms to the program,
can you tell us when you first learned what TANF was, and since
going through all of this, the concerns that you have about the
program as it exists today?
Mr. FAVRE. Yes. April, maybe May of 2020, I was actually on
a golf course with my brother and three other friends, and our
phones started going crazy. And people were asking about Shad
White, who I had no idea who Shad White was. And said, What did
you do to him? You know, he is saying, you know, that you are
involved in TANF money.
And I had no idea what TANF was, had never heard of it, and
was completely caught off guard by this press conference. And
if--not knowing what TANF was, and later finding out that it is
welfare money, I returned the money ASAP, no questions asked.
And no one from Shad White's office ever came to me prior to
this press conference that he held and asked me any details or
specifics in regards to my involvement.
So we filed a defamation lawsuit against Shad White, and in
that lawsuit, his top chief auditor, in her deposition most
recently, said that the truth--finding out the truth was not--
quite frankly, was not important. She just wanted to close out
her audit. So she didn't do any--you know, I mean, it is
unbelievable. But that is when I found out was 2020.
Chairman SMITH. The concerns you have about the program,
what are those concerns today?
Mr. FAVRE. Well, I am here because there is, obviously, a
problem. First and foremost, I think a big problem is a lot of
people don't know what TANF is, never heard of it. So we have
to educate people on what TANF is. But we have to implement
guardrails and guidelines and be strict on how the money is
supposed to be used for a lot of reasons, most importantly, so
those families can get the money that they need in situations
like myself or people in similar situations who are trying to
do good and are caught up in, you know, quite frankly, a mess.
This doesn't happen to them.
So, you know, I think we need to educate people, first and
foremost, and teach people what TANF is. But the guidelines are
very vague, as I understand it, and so how they are used, the
TANF funds, you can kind of stress that.
Chairman SMITH. So nonassistance of TANF funds represents
nearly 80 percent of all of the TANF programs' spending, a
substantial portion of any government program to operate
largely outside of any serious guardrails.
Mr. Favre, you have previously shared with me your concern
that there seem to be no one doing much of anything to
establish the guardrails on TANF spending. This committee is
paying attention. We are holding hearings. We are asking
questions of federal agencies and looking at what can be done
legislatively to put those guardrails in place.
From your experience, where do you see the most maybe
glaring of oversight at the state or federal level that allows
these welfare funds to be spent in ways that is not helping
needy people?
Mr. FAVRE. Well, I lived it. So the auditor--this was all
under his watch, this $77 to $100 million allegedly that is
misspent, stolen, misappropriated, but he chose not to audit.
He didn't act until its governor, Governor Phil Bryant, became
the whistleblower. So it has got to start at the heart of it
before it starts anywhere else, and the auditor, his job is to
audit that TANF money.
Chairman SMITH. Thank you.
Mr. Underhile, your story speaks to some of the work that
this committee is trying to do, to support more individuals to
overcome adversity and challenging circumstances. And, for
example, Representatives Smucker and Wenstrup, they have a bill
that allows states to transfer up to 30 percent of TANF to the
Workforce Innovation Opportunity Act to support workforce
development activities, target toward individuals in poverty.
Based on your experience with a program in Missouri that
provides a similar type of services, what would it do for
individuals and families and communities across this country
were we to give states the opportunity to channel more of their
efforts and their TANF nonassistance funds towards proven
solutions that help Americans enter into the workforce?
Mr. UNDERHILE. It would be absolutely life-changing,
because if you don't teach somebody how to work and how to
support themselves, giving them money year after year or month
after month ain't going to do anything for them. You are going
to hold them where they are at. If you don't teach them
anything, they are not growing.
Chairman SMITH. Thank you.
It is a privilege and it is an honor for people in
southeast Missouri that you are here to share your story. So
thank you for being up here.
Mr. UNDERHILE. Thank you.
Chairman SMITH. I now recognize the ranking member for any
questions that he may have.
Mr. NEAL. Thank you, Chairman.
So the Chairman said in his commentary that he spoke to a
Member of Congress who didn't know what TANF is? Didn't know
what TANF is? It is one of the most important social service
support systems that existed in its antecedents from the New
Deal. That is how long this goes back.
What is important to acknowledge as well, I know something
about the TANF legislation from the 1996 Welfare Reform Act and
what happened, the compromises that were reached. Republicans
insisted on an end to the entitlement of welfare, and Democrats
in the minority in the House, but with a Democratic President,
we wanted more childcare, more job training, more
transportation assistance, and the compromise was reached in a
very divided Congress.
But Mr. Underhile, your testimony today is an indication of
why all Members of Congress ought to know something about TANF.
Based upon the trampoline effect that I described at the
beginning, you were able to remake your history with a
partnership between the Federal Government and the state
governments who administer TANF. That was part of the Reform
Act of 1996.
And specifically to Mr. Dortch, you spent all of these
years fighting to direct public dollars to struggling families
who fall on hard times, often times because of bad luck and bad
choices, but not to miss the relevance of why TANF is
important. You have been an advocate for all of these years.
You have been positioned to question inappropriate spending,
and now you are part of a group that says, ``we want that money
spent on people who need it, and the money that was intended
for that purpose.''
The state now is largely responsible for the administration
of TANF fundings as we moved it away from the entitlement
program here in Washington in 1996. So advocating for an
expanded child tax credit, childcare, paid family and medical
leave, these are policies that actually have been proven to
lift families out of poverty. The child credit alone that we
inserted into the rescue package, it cut childhood poverty in
America in half.
So let me give you a chance, Mr. Dortch, to talk about the
success of those initiatives as you have described them in your
testimony.
Mr. DORTCH. Sure. As you mentioned, it cut poverty in half
in our State, especially childhood poverty when you consider
Black families. You have to remember that Mississippi is a
State that pretty much relies on jobs that are service jobs
with low wages, so people don't have a consistent amount of
money that they know is coming in because there is not industry
everywhere in the State.
What the child tax credit did was put more money into the
economy. It allowed families to be able to spend on groceries,
on necessities, be able to buy things for their children. This
money went back into the economy and just didn't stay with that
family.
So this doesn't just benefit an individual or family that
is in need. It helps the entire State. And Mississippi saw
record tax revenue during this period. We saw record income in
this period. It wasn't because of any changes in State policy.
It was because more people had money, disposable cash, that
they could spend on things. And in Mississippi, that is--far
too often, people don't have cash to do that. They don't have
the means to be able to buy something extra for their family.
Instead, they are very proudful people that always talk
about how they can make things stretch. And we are so proud of
being able to do that in Mississippi, we forget that we are not
getting what we are supposed to be getting in our State. People
are proud that they can make things stretch, make payments
stretch, make food stretch. You know, we overcome this, and we
are proud of it, but it shouldn't be that way.
Mr. NEAL. And just a lesson here--and I don't want to
litigate the case that Mr. Favre has alluded to, but I do think
based upon the experience that all have had as witnesses here
that you might want to consider using this opportunity to make
real investments in childhood poverty. It is a stubborn part of
American history, childcare, paid leave, child credit. Help us
all lift children out of poverty.
Chairman SMITH. Thank you, Ranking Member.
Mr. Smith is recognized.
Mr. SMITH of Nebraska. Thank you, Mr. Chairman. Thank you
to our entire panel here and certainly to my colleagues, and
many of us have been working on this issue for some time. I
really appreciate the efforts that so many are making. I don't
want to just say have made, but are making because of the
importance of this issue.
I know that the GAO has released a preliminary observation
finding 155 unresolved TANF audit findings spanning 35 states
in 2023 alone, most of which were found to be severe and
outstanding. I would like to submit this for the record.
Chairman SMITH. Without objection.
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Mr. SMITH of Nebraska. Thank you.
When we talk about temporary assistance for needy families,
I like to point out to anyone who will listen that these funds
are intended for the neediest among us, and that we want to
make a difference, that these taxpayer dollars that come from
all over the country, obviously, are intended to help lift
people out of poverty.
So when I hear and read about various things, I am
concerned. I think, Mr. Dortch, you mentioned--I think it was
your comments that included that someone said that we don't
track the outcomes. That is tragic in and of itself. I think it
is important that the federal government not become overly
prescriptive of various state governments. We need to have the
expectation that positive things are happening. And I realize
that we want to encourage creativity among the states, but,
wow, the creativity that we have seen, whether it is in
Mississippi or elsewhere--like I said, there are many states
that have gotten I think a little too clever, but the efforts
to cap benefits--beneficiaries, I should say, at 200 percent
federal poverty and below, I know the administration is looking
at creating a rule as such. I have been working on this
legislatively for some time, and I would certainly invite
colleagues to join in this effort because I think it really
helps. It is not the full answer, but it helps target the funds
to folks who need it the most.
But, Mr. Favre, I have a few questions here. When you were
initially approached at helping promote various efforts, where
was it characterized these funds were coming from?
Mr. FAVRE. Well, my understanding was it was grants, that
this particular lady had been writing grants for 35 years in
the state, and the university introduced me to her and her
nonprofit. Surprisingly, she was actually a Southern Miss grad
and was on the athletic board, but I had never met her before.
So again, as I said earlier, never was TANF or welfare funds
mentioned in any conversation.
Mr. SMITH of Nebraska. Were public funds mentioned, or was
it your understanding that they were private funds from a
wealthy individual or some source?
Mr. FAVRE. I don't recall. I just remember grant money.
Mr. SMITH of Nebraska. Okay. All right. Thank you.
Well, I think that your presence here today is helpful so
that we can work together to prevent similar situations from
happening, but I am just extremely concerned at the lack of
expectations that currently exist that these taxpayer dollars
intended for the neediest among us are not helping the people
that they are intended to help.
Mr. Adolphsen, could you speak a little bit to how maybe
limiting the beneficiaries to 200 percent of federal poverty
and below could help us in our effort?
Mr. ADOLPHSEN. Sure. Representative, thank you for the
question.
And just to go back to your last question, you know, one of
the issues with TANF is that there is state-required
maintenance of effort, MOE, that in 1996, Congress said, ``hey,
we are going to give you this block grant, but you are also
going to have to keep spending money on the truly needy. We are
going to make sure you keep helping.''
Well, right now MOE can also be accrued at the state level
through nongovernment spending, through some private
nonprofits, which is just a confusing, unclear, and unnecessary
way to do that MOE process. So I just wanted to mention that
lack of transparency on that front. It kind of undermines what
the MOE does.
I think keeping eligibility for noncash assistance side
under some threshold, if 200 percent of federal poverty, that
is a good benchmark. But you look at the Food Stamp Program,
185 percent is often the upper limit, Medicaid is 133 percent
of the federal poverty level, so all--you know, anything in
that range would make sure that those funds that are outside of
cash loaded onto an EBT card, anything that is funding a
program, a service, another part of government is going to the
poorest, those in poverty in the state, I think would be very
helpful.
Mr. SMITH of Nebraska. Okay. Thank you.
I yield back.
Chairman SMITH. Thank you.
Mr. Thompson.
Mr. THOMPSON. Thank you, Mr. Chairman. Thank you for having
the hearing. Thank you to all of the witnesses.
I really want to shout out to Mr. Underhile, thank you for
coming and congratulation on the success that you have
experienced, and thank you for acknowledging the fact that it
was the help that you got that got you back on your feet. I
appreciate that very much. And hopefully, today isn't an
exercise in yelling fire, but doing nothing to put it out.
Mr. Neal talked about the history of the 1996 federal
legislation that brought us to where we are today. I wasn't
here when that was done, but I was in the California State
Senate, and I wrote the California Welfare Reform Act that was
necessitated by the 1996 federal legislation, and I know that
what we did in California was helpful.
There are many Mr. Underhiles in California as a result of
that work, and I think we should be focusing on how we bring
about more success. I believe that we should be holding a
markup on policies to bring families out of poverty, like
reauthorizing TANF with increased oversight, the enhanced child
tax credit, which we have heard from a couple of people today,
actually cut childhood poverty in half, something that is
important in every state across the nation, and the Earned
Income Tax Credit.
However, there has been little in the work done to do this
working together that we should be doing. This seems to be
typical playbook stuff, creating a problem and then talking
about how we fix it. We have just seen this most recently in
regard to the SALT discussions that are taking place in this
presidential election.
So we need to be coming together, and Democrats are willing
to work with our Republican colleagues to strengthen TANF and
provide the necessary safeguards that will prevent misuse. We
should be doing it throughout the entire session, not with two
days left in the legislative session. This is a program that is
important enough that we should be devoting ample time to make
it as great as it can be.
Mr. Dortch, I have a question for you. If Republicans
choose to work with Democrats to reauthorize TANF, what can we
do to ensure that the federal government has adequate oversight
of how states use these dollars?
Mr. DORTCH. Sure. There has to be some mechanism to allow
the Federal Government to punish these States. Mississippi did
this 5 years ago, and nothing has happened. There haven't been
any penalties that have come down for this misspending. The
State legislature has shown no interest in doing anything about
it. As I mentioned about the rules as far as--or any rules on
looking into how these programs work, that is the current MDHS
director. Even after all of the scandal, they are giving us
grants to organizations and not asking them to show what it is
going to.
Mr. THOMPSON. If I could interrupt you, I recognize that,
and in your statement, you have explained that well. And that
is all part of the fact that we block granted these programs,
sent them back to the states and said, ``do what you want to do
to make--you know, to respond to this very real and very
important issue that we all want to address.''
So my question is what can Congress do to ensure that the
states take that block grant and do what they are supposed to
do with it?
Mr. DORTCH. Yeah. I think one thing you could definitely do
is stop States from being able to manipulate these broad
spending categories. There needs to be tighter rules on what is
actually going out. If we are doing job assistance, what does
that look like? If you are having people get transportation
services, what does that look like? That is information that we
can't find out from our Department of Health and Human
Services.
So when they use these big--the broad terms or broad
categories, they even put scholarships to folks that are making
up to 350 percent of poverty level under the term of workforce
development, and that was the bulk of that money. So you don't
even really know what that money is going towards because the
categories are so broad.
Mr. THOMPSON. Thank you very much.
I yield back, Mr. Chairman.
Chairman SMITH. Thank you.
Mr. Kelly.
Mr. KELLY. Thank you, Mr. Chairman.
Thank you all for being here today.
Mr. Underhile, I am really impressed with what you have
been able to do. In our family, we have a situation very much
like that, and it has been since my son was 14 years old--he is
now 42 years old--program after program after program after
program. How were you able to get through all of that? Because
I think that, look, the rate of recidivism is like 97 percent.
So you come out of that deal, and I have people tell me all the
time--and we have a family business--what you need to do is you
need to hire those folks. And I said, ``that is fine. There is
a little thing called liability that makes it impossible to do
that.''
What you have done is incredible. You were able to turn
your life around, so I have got to think between you and your
wife, all of a sudden you had this awakening and this idea that
there is more to life than what I am doing now. I am wasting
whatever the Lord has given me. I need to make the most out of
it. But what you are doing is, you are working within the
system itself. It is getting into the private sector that is
really difficult.
So from all of you, I mean, all of these programs start out
well-intended.
Mr. Favre, what you have gone through is incredible because
you don't know what you don't know. And because it is so broad,
and there is so few guardrails on it, Mr. Dortch, I listen to
you, and so who would a person go to to find out, ``am I
working within the framework of this? Am I working toward a
desired outcome of this?''
And listen, we have to do these things. There is no
question about that. The question on it is, what is the return
on that taxpayer dollar to the country?
And, Mr. Underhile, I am telling you, you have done an
amazing job.
Mr. UNDERHILE. Thank you.
Mr. KELLY. You have done an amazing job. But, again, I get
back to that liability thing, and I have been trying to work
with one of our colleagues across the aisle because she has a
problem with her son. If we can't find a way to take the curse
off of employing somebody, I think it is foolish to tell
somebody, ``listen, you just have to get up, get going, get
yourself a job, and get out there and work every day.'' It is
not easy to do. It is not easy to do.
Mr. Favre, you did what you thought was right, and you are
penalized because you were doing something that you thought was
right, but somebody said, ``no, that is outside the bounds.''
Say, really? Where's the rule book? Tell me.
Mr. Dortch, you work with it every day.
It is not the amount of money we spend. It is the amount of
money we waste. And I just can't understand how we can have a
program this big so well-intended and structured, but not
enough guardrails on it to tell people, ``hey, this is where
you have to stay within.'' I watch too many programs like that.
It is not that the American people don't want to invest. The
trouble is with the money that gets invested that gets used
differently. And a lot of it is because nobody guides you.
Nobody counsels you along the way.
So I appreciate you all being here. I can't imagine what it
is like to go through that. I do know what you are going
through, Mr. Underhile. I do know what you are going through
because I have watched it now for 28 years and keep thinking
that maybe the next time, maybe the next time, maybe the next
time. So way to stick to it, way to get with it. Your wife must
be an incredible person.
Mr. UNDERHILE. Yes.
Mr. KELLY. You have, what, seven children?
Mr. UNDERHILE. Yes, all together.
Mr. KELLY. Good Lord. We only have five, and I don't know
how we afford that. So, listen, thank you for what you are
doing.
Mr. Dortch, if you could keep us in line and let us know
what it is that we need to do. What is it that we are not
doing? It is not a matter of not allocating money. It is
putting into place what it should be used for and counseling
people and saying, ``well, no, this is not intended to be this
way.'' But once it goes to the state, it is in their hands.
So I want to thank you all for being here.
Mr. Favre, for you to step out of where you have been your
whole life, people start to understand this can happen to
anybody. If it can happen to Brett Favre, it can happen to
anybody. And this is where we like to think that somehow that
the system is fair. I would like to think it is, after too many
times of looking at where it is not. And it is a lot of times
because of a misconception. But thank you all again for
appearing.
Mr. Adolphsen, thank you for being here today.
It is a huge opportunity for the United States to get
itself back on keel; right. So thank you so much.
I yield back.
Chairman SMITH. Thank you.
Mr. Larson.
Mr. LARSON. Thank you, Mr. Chairman.
Mr. Chairman, before I begin, I would like to yield time to
Mr. Neal.
Mr. NEAL. Mr. Chairman, I have a series of letters that
have come from Congressman Bennie Thompson of Mississippi that
he would like to have inserted into the record.
Chairman SMITH. Without objection.[The information
follows:]
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Mr. NEAL. Thank you.
Mr. LARSON. Do you yield back?
Mr. NEAL. I yield back.
Mr. LARSON. Thank you, Mr. Neal.
And thank you, Mr. Chairman.
And thank you to all of our witnesses for your testimony to
an incredibly important program, TANF, and especially given its
goals and focus. And clearly, there is a need for reform.
And I want to make sure that we point out as well and thank
Representative Danny Davis, Representative Gwen Moore, Judy
Chu, Representative Dwight Evans, and Representative Jimmy
Gomez for putting together the TANF State Expenditure Integrity
Act. I think that will go a long way towards helping.
And certainly, child poverty is an issue all across this
country of ours, and any time there is fraud or abuse in a
program, it ought to be investigated, and we ought to make sure
that we are eliminating that. We shouldn't tolerate any kind of
crime to federal dollars that are flowing to our states.
There is, however, sometimes another crime of neglect, and
this committee, and the United States Congress, is very much
responsible for that.
Imagine, Mr. Dortch, that last time that Social Security
was enhanced, Richard Nixon was President of the United States.
You are talking about a state that desperately needs help and
where 58,000 children are impacted, and yet, Congress has not
voted to enhance benefits to Social Security recipients.
And I am sure some of the goals here are well-intended, but
how can we convene as a body year after year and bring up
subject matter after subject matter, and not acknowledge the
most effective and efficient governmental program that we have
administered for approximately one percent?
I am from an insurance capital of the world. They
administer insurance anywhere from between 16 to 26 percent,
but here is the federal government, with the number one
antipoverty program for the elderly and also for children, that
has not enhanced the program in more than 50 years.
Mr. Favre, don't you think that that is pretty incredulous?
Mr. FAVRE. I do.
Mr. LARSON. Mr. Dortch, how about you? Do you think that is
pretty incredulous?
Mr. DORTCH. I agree.
Mr. LARSON. Isn't it long overdue that, when we talk about
fraud and abuse and waste--that what we need to do is to take a
look at the programs that are working and understand that
government has not stepped up. And this isn't anything that the
executive can do or that the Supreme Court is going to do. Only
the United States Congress can make sure that we step up.
We have 70,000--excuse me--70 million Social Security
recipients. 10,000 baby boomers a day become eligible. This is
the committee that is responsible for it, and it is long
overdue that we take a vote.
I yield back.
Chairman Smith. Thank you.
Mr. Schweikert.
Mr. SCHWEIKERT. Thank you, Mr. Chairman.
And I care a lot about this issue, and I wanted to see if I
can actually do something a little more complex because I
really think this could be one of the few things here where we
would learn some way to talk to the left and the right, because
I believe the conversation is much bigger than TANF.
There is very good economic data now. In America, you know,
if you are born poor, it is much more devastating--much more
devastating than the race you are born or who your parents want
to cuddle with or anything else. Poverty is the thing that
crushes an individual's future.
We have had a fixation--at least out of my office, also--on
the components of health. We have some data that shows that one
of the primary drivers in income inequality is actually when
you have family members that are quite unhealthy--diabetes,
other issues with that--and when we have normalized for that,
it has been amazing how income stability comes back in.
And Sam, I don't want to mispronounce your name. It is
Adolphsen? Say it for me.
Mr. ADOLPHSEN. Adolphsen.
Mr. SCHWEIKERT. Adolphsen. I should have gotten that.
So, if I came to you and said, all right. Clean slate. We
want to help our brothers and sisters in America, let's say,
200 percent and below the poverty line, and we are able to
reach out in, say, every program. Remember, I just set off the
alarm bells of thousands of lobbyists around the country who
just lost their minds.
But everything that we do in our Medicaid system to TANF to
nutrition support to even the way we deliver WIC to, you know,
the modern equivalent of EBT cards, and we said--okay.
First off, what, that is 11- to 12,000 per person? So a
family of three--you know, which is a typical TANF family--you
know, let's call it 33- to 35,000. Make the math simple.
If we were to rethink--because, you know, we have this
amazing technology and other things. It is not the 1950s. It is
not the 1960s, 1970s anymore. How can we help our brothers and
sisters be less poor?
And, also, Mr. Chairman, for the record, I would like to
submit some articles and a University of Chicago study that
talks about relationship to work at the end of 10 years is the
single most powerful thing in changing poverty, not
necessarily, you know, the transfer of payments.
Chairman SMITH. Without objection.
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Mr. SCHWEIKERT. What would you do?
Mr. ADOLPHSEN. Thank you, Representative.
So, really, essentially, the whole thing is what is
essentially TANF and its work. If you look at one of the
leading predictors of whether someone in recovery will relapse
in substance abuse, it is whether or not they have a job. If
you look at rates of depression, they are much, much higher
among those who are unemployed. Work is really central to the
well-being and ultimately the health of the individual, and
TANF has recognized that since 1996. That is why the--you know,
a big part of why the core objectives revolve around work.
And so what I would do first, particularly as it relates to
TANF, is take this incredible resource, which is these
available TANF funds that you have right now, that States have
right now, and I would put those to work in other welfare
programs.
Mr. SCHWEIKERT. But would you--okay. So you would--in your
mind, you would use actually sort of the TANF model, which we
already are having the conversation of we have bad actors who
have been sending the money in ways that are not helping the
poor.
And would you consider a universal rethinking and
consolidation of--because there are dozens of different silos
we have created over the years thinking we are helping and
hopeful.
Mr. ADOLPHSEN. Sure. And I think there is an even simpler
answer, which is just to take the two largest welfare programs
by participants, which are the SNAP program--food stamps--and
Medicaid. And, in Medicaid, there are nearly 40 million able-
bodied adults, many with kids in the house, all under 133
percent of the federal poverty limit. Same in the food stamp
program. There are 10 million able-bodied parents on food
stamps.
Those folks are not on our TANF caseloads in the states.
They come into the office, and if they are eligible, they walk
away with a plastic cart or food stamps or for Medicaid, and we
say good luck. TANF was designed to say, we are going to give
you some cash, some help, but we are also going to help you. We
are going to engage with you. And if we did that for those
millions of folks in those other programs, even using--you
know, using TANF funds, I think we could close the gap.
Mr. SCHWEIKERT. Thank you.
Mr. Chairman, Ranking Member, I would love to have a much
more universal discussion because, you know, I also would love
us to have also the discussion of transfer payments, welfare,
and health.
And, with that, I yield back.
Chairman SMITH. Thank you.
Mr. Blumenauer.
Mr. BLUMENAUER. Thank you.
Well, I think this is a worthy area for more analysis and
discussion. I appreciated our ranking member sort of laying out
some of this.
Fifty years ago, as a college student, I participated in a
national debate competition, and the subject then was a
guaranteed annual income. And we were quoting the Nixon
administration, Milton Friedman, being able to deal with some
of the complexities here.
People cheat because the complex systems allow it. Nobody
fully understands these things. There are opportunities for
people to game the system. People are poor because they don't
have money.
Mr. Larson is like a laser on the Social Security program.
That works. Section 8 housing vouchers are not in sufficient
demand, in any state in the union, and that is a very efficient
way to use the private sector to provide housing. SNAP
benefits, and WIC, providing food for people.
We get all caught up and I think we forget a little bit
about how bad it was four years ago in the midst of the
pandemic where we had all sorts of people contacting our office
because programs didn't work. They broke down. Part of the
problem is the complexity. We have managers managing
eligibility here, managers overseeing other managers,
guardrails.
I mean, for most Americans, we found with the Child Tax
Credit, the money went where it was needed, it reduced child
poverty, outcomes were improved, and we didn't have to have a
bunch of people dealing with the complexity of administering
it.
I would hope--and I am on my way out. A hundred days from
now, you are on your own. But I really hope that, if we are
going to have some serious conversations about this, look at
what works: Section 8, Social Security, the Child Tax Credit.
We don't have to have endless bureaucracies and hopeless
complexity that people can maneuver around and cheat. Cut to
the chase, invest in things that work, get benefits to people
who need it, and get rid of the bureaucracy that everybody
claims that they are against. We have programs we can invest in
that will do a far better job.
I appreciate the witnesses giving us a sense of some of the
challenges they face, but I truly think that we ought to trust
the American people to be able to invest in things that matter
to them. Have special programs, by all means, for people who
have special disabilities and that are dealing with addiction
and whatnot. But the vast majority of people don't need that.
They need money, they need housing, they need food, and
everybody would be better off if we invest more in those
basics.
Thank you. I yield back.
Chairman SMITH. Mr. LaHood.
Mr. LaHOOD. Well, thank you, Mr. Chairman.
And I want to thank our witnesses for being here today and
for your valuable testimony and the opportunity to address this
subject.
And I have to say, Mr. Favre, welcome. As a long-suffering
Chicago Bears fan, it is tough to see you here today, but there
were many years where I was jealous of your success. But you
had a wonderful playing career and are well-deserving of the
Hall of Fame designation.
I think Brad Schneider probably shares my pain as being a
Chicago Bears fan. Look at that. He has got his Bears jersey.
There you go, Brad. Yeah. We don't forget that easily.
I am the chair of our Subcommittee on Work and Welfare, and
I have to tell you, I am thrilled to look around this room
today and see all the people that are here today to talk about
TANF. And, last July, our subcommittee held a hearing
investigating this same topic: TANF Non-Assistance and Misuse
of Funds. And, on that day, we had maybe 30 people in the room.
So, as I look around this room here today, this issue is
finally getting the attention it deserves, and I want to thank
the chairman for prioritizing it.
What we learned at our subcommittee hearing last year was
that TANF non-assistance spending lacks basic financial
safeguards that are included in most other federal programs,
making it easy for states to divert funds and increasing the
risk of waste, fraud, and abuse.
Understanding what went wrong in Mississippi is important,
but I hope people remember that this is an issue across the
country, and what happened in that state is a symptom of the
larger problem that requires congressional action to fix it.
And I think it is also important to remember the title of
today's hearing: ``Reforming TANF: States' misuse of welfare
dollars leaves poor families behind.'' And today is a
culmination of 2 years' worth of work that we have done on our
Subcommittee on Work and Welfare.
And we have a chart that is behind me here, and this chart
provides a timeline and demonstrates the work that our
committee has done on TANF. And I want to go through this just
to show what led up to the hearing today.
In March 2023, our Subcommittee on Work and Welfare held
our first hearing examining work requirements in TANF and the
need for reforms to strengthen basic assistance. As a result of
that hearing, in May of 2023, we passed the Fiscal
Responsibility Act, which included reforms to strengthen TANF
and closed loopholes to reinforce work requirements.
In June 2023, we turned our attention to the non-assistance
side of TANF, and sent a letter to HHS requesting information
on the agency's oversight efforts.
In July of 2023, we held our second hearing on TANF. This
hearing focused on reclaiming TANF non-assistance to improve
accountability and support work.
In September of 2023, Chairman Smith and I requested GAO to
do a nationwide investigation of TANF non-assistance spending,
and they have provided a preliminary report of their findings
for this hearing today.
And in March, Republican committee members introduced seven
new pieces of legislation to reform TANF non-assistance using
what we learned from our investigation.
We have done the work and understand what needs to be done.
I know this is something that both sides of the aisle care
deeply about.
My friend, Ms. Moore from Wisconsin, has shared her concern
about the questionable uses of TANF funds in Wisconsin. Ms.
Sewell suggested at our Work and Welfare Subcommittee putting
together a bipartisan working group during one of our hearings,
which is a great suggestion.
Earlier this year, Secretary Becerra came before this
committee and confirmed his commitment to work with us on
increased accountability and eliminating fraud in the TANF
program. And I echo the chairman and hope this hearing provides
an opening to start meaningful bipartisan conversations to
implement the proper safeguards, strengthen the program, and
ultimately help more individuals and families.
A question for you, Mr. Underhile. Based on your
experience, can you describe how getting a full-time job with
benefits can transform a person's life rather than just getting
a welfare check? What does your job mean to you and your
family?
Mr. UNDERHILE. It means everything because, if you are
homeless and I give you $100, and you spend that $100, you are
still homeless. If I don't teach you how to make money and
benefit yourself and feed your family and support your family,
we are purging money to people that don't care about bettering
themselves, in my opinion.
If you don't teach somebody how to make money and how to
get a job and keep a job and support their family, what are we
giving them money for?
Mr. LaHOOD. Thank you, sir.
I yield back, Mr. Chairman.
Chairman SMITH. Mr. Davis.
Mr. DAVIS. Thank you. Thank you, Mr. Chairman.
And I want to thank all of the witnesses who have come and
shared serious information with us.
To begin, I want to applaud the leadership of my friend and
colleague, Representative Bennie Thompson from Mississippi, who
has fought for years to get federal and state officials to
investigate the misuse of TANF in Mississippi.
As ranking member of the subcommittee of jurisdiction over
TANF, I am acutely aware of misuse of millions of dollars from
struggling families in Mississippi, but TANF is working exactly
as the Republican TANF system was designed. Unlike any other
law, Republicans insisted on a statutory prohibition on federal
oversight that limits transparency, fraud detection, and
enforcement.
Mr. Dortch, another Mississippi advocate, asked this
subcommittee for help years ago to get the Trump administration
to investigate Mississippi's TANF use. We had to direct them to
state officials due to this prohibition on enforcement. Even
the new GAO report says Health and Human Services has indicated
its oversight of state use of TANF funds is constrained by its
limited statutory authority. They don't have the authority to
do it. Yet, Republican bills to address TANF fraud focus on use
by individuals, willfully ignoring fraud by organizations.
Mr. Dortch, I thank you for your tireless work on behalf of
families in Mississippi. In 2021, over 350,000 Mississippi
families received the enhanced Child Tax Credit which my
Republican colleagues ended in 2022. Yet, only about 2,000
families received cash assistance from Mississippi's TANF
program with a paltry sum of about $170 in cash a month for a
typical family. I believe the state and the people who diverted
funds from needed families have a moral obligation to now help
those families.
So, Mr. Dortch, is Mississippi giving any of the recovered
funds to people to help with food, housing, childcare, and
other basic needs? Are the people who misused money intended
for poor families doing anything to make up for their actions
by helping those struggling families?
I lead a bill to allow HHS to monitor states for this kind
of malfeasance, and if they find misuse, to require states to
recover and invest that money in income support for struggling
families. Do you think that kind of policy would help
Mississippi? And, even after this misuse, has the state of
Mississippi been transparent to you and other advocates about
how TANF contractors use TANF funds accountably.
Mr. Chairman, I also ask unanimous consent to submit
additional materials from Representative Bennie Thompson to the
record.
Chairman SMITH. Without objection.
Mr. DAVIS. Thank you.
Mr. Dortch, would you respond?
Mr. DORTCH. Sure. The easy answer is no. The State hasn't
made any policy changes. We still fail to reach the vast, vast
majority of families in need. We haven't put more money towards
assisting folks or making sure that money gets to people that
need it.
Our State director of our TANF program actually said that
it is hard for people to access my program, and he is the State
director. So he knows the State has constructed so many
different rules, and so many different hoops that it is
impossible for families to be able to access this program. And,
also, when they try to access this program, if they make a
mistake, they can lose their SNAP benefits or other benefits.
We have intentionally made it too complicated, and it is so
complicated that people cannot get the benefits. And the thing
is, we know what people need. We just have got to trust them. I
know that that is not going to be, you know, always the case
that people do the right thing, but I think the vast majority
of Mississippians that are in need are good people that need
some extra cash, that need help with transportation, that need
childcare. Those are things that we should be able to easily
supply folks. Instead, we make up these different rules and
these different nonprofits get organizations.
Families First was treated as a great program while it was
running. The Governor bragged about it. He had awards about it.
He said we are changing how Mississippi looks at poverty. We
are going to change generational poverty in Mississippi. They
weren't doing anything, and we were spending $50 million on it
when people just need those basic--they have basic needs like
childcare, like transportation, like being able to buy
groceries.
One other thing. Mississippi makes folks do job searches
before they can get TANF. So, if you are living in a county
without any jobs--and there are many counties in Mississippi
without any jobs--if you want TANF assistance to help you get
transportation, you cannot get that assistance until you go
through the job search. So we have really gone way too far in
making this complicated and punitive towards people that need
the assistance.
Mr. DAVIS. Thank you very much.
Thank you for your indulgence, Mr. Chairman.
And I also have a submission from press articles that I
would like to submit.
Chairman SMITH. Without objection.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Mr. Wenstrup.
Mr. WENSTRUP. Thank you, Mr. Chairman.
You know, poverty is said to exist when people lack the
means to satisfy their own basic needs. That is the
circumstance of every child ever born. So, in reality, no one
is really out of poverty until they can function independently
to satisfy their own basic needs. And no child can truly be
lifted out of poverty, but families can.
Mr. Underhile is an example of that, and I thank you for
the words that you shared with Mr. LaHood. It was spot on.
If you are permanently depending on assistance, you are
technically not out of poverty. That is what you were saying.
And that is an important point for everyone here in Congress to
understand when they say we lifted someone out of poverty. No,
you did not. Work can lift you out of poverty.
We can feed you, educate you, train you, and get you on a
path to independence and freedom and truly out of poverty so
that you can feed yourself, house yourself, and teach others,
which is what you are doing, Mr. Underhile, and you are a great
example. You not only teach others, but you teach your
children.
We have in our district some federally qualified health
centers which treats the poorest of the poor, and God bless
them for doing it. What we have seen is some of them have
associated themselves with food banks so that when you do go to
the doctor and try and stay healthy, you can leave with some
food, food that is good for you.
I also suggested that, at our food banks, we post job
opportunities because that is really the outcome we are after.
That is what success should look like, not just saying we sent
people money. That is short term. That is short term. And, too
often, the benefits we do offer have cliffs that, when you
start to make it, you are worse off. That is a problem.
But outcomes matter. And, you know, I am proud to lead the
Reduced Duplication and Improve Access to Work Act with my
colleague, Representative Smucker, because this legislation
would address the silos we see in Federal programs by allowing
states the flexibility to braid TANF and WIOA funds being
together, WIOA being the Workforce Innovation Opportunity Act.
That is the final step in the process of truly lifting people
out of poverty.
I know we have touched on it today. I believe we have
touched on allowing states to transfer some TANF funding to
WIOA, braid these funding streams together, which can improve
these programs and actually give you the outcome that we want
to see for all people.
In my home state of Ohio, we have had our own examples of a
TANF billing fraud scheme, unfortunately. In fact, according to
the GAO submission for the record for this hearing, employees
of a TANF subrecipient in Ohio submitted inflated payroll
expenses and misspent funds on real estate, resort vacations,
and cosmetic surgery.
Mr. Chairman, with no objection, I would like to submit an
article detailing this story for the record.
Chairman SMITH. Without objection.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. WENSTRUP. In Ohio, we are fortunate that the court
identified this fraud and took care of it.
Mr. Favre, thank you for being here. I have admired your
career. I am from Cincinnati. You didn't get to beat up on us
too much, but other people did. So, you know, we have seen some
change.
But anyway, I am going to ask you, how do you think
policymakers can act now to protect TANF funds so we don't have
to continue chasing fraud after it has already occurred?
Mr. FAVRE. Again, I can only speak in my experiences, but I
look at something that is happening presently. The attorneys
that the State has hired to represent them against myself and
others, unbelievably, is being paid with TANF funds as we
speak. And, I mean, that has got to stop.
You know, I mean, this has been a 3- or 4-year saga for me
and the State of Mississippi, and as much attention has been
garnered our way, you would think that we would have this
resolved by now, but yet here we are. And I am not smart enough
to figure out what needs to be done in a lot of areas of TANF,
but I know that the senseless use of TANF funds for things that
are not intended for has to stop immediately.
Mr. WENSTRUP. We need a few more people with a conscience.
Thank you. I yield back.
Chairman SMITH. Ms. Sanchez.
Ms. SANCHEZ. Thank you, Mr. Chairman.
We sit in this hearing today to address a critical problem
with public assistance in this country, a problem that has been
exacerbated by one of our witnesses here today who is facing
allegations of misusing TANF funds for corporate gain.
Mr. Favre, right off the bat, I would like to ask you about
these funds. A Mississippi state audit found that about $5
million in TANF resources were reallocated to pay for the
construction of a volleyball facility at your alma mater, a
facility that you were very interested in seeing come to
fruition. An additional $1.7 million was directed to a drug
company in which you are an investor. And, still, another $1.1
million in speaking fees was given to you for speeches that you
never gave.
Now, you and your attorney stated that you repaid the
speaking payments but not the others, and additionally, the
state of Mississippi is pursuing interest on these millions of
dollars.
Do you plan on repaying these funds to the state of
Mississippi so that families in need who are the beneficiaries
of TANF can receive the benefits that they are due?
Mr. FAVRE. Well, first of all, thank you for the question.
I have repaid, and to my knowledge, I am the only person who
has repaid any money.
Ms. SANCHEZ. Have you repaid interest on the millions of
dollars that were misallocated?
Mr. FAVRE. No, I have not.
Ms. SANCHEZ. Okay. Thank you.
You have come in support of former President Trump's
campaign, and the Trump abortion ban makes it illegal for a
woman to access reproductive healthcare in the state of
Mississippi. The funds you are alleged to have misused are for
a program that overwhelmingly serves poverty-stricken single
mothers who are some of the women most affected by Trump's
radical abortion ban.
So tell me, Mr. Favre, do you think it is acceptable to
divert critical funding away from disadvantaged women who need
it the most?
Mr. FAVRE. Well, first of all, I have no knowledge of
President Trump's policies in regards to that, and I am not
directly involved.
Ms. SANCHEZ. Well, the question is a simple yes or no.
Do you think it is acceptable to divert TANF funds away----
Mr. FAVRE. No.
Ms. SANCHEZ [continuing]. From women who need it the most?
Thank you.
Mr. Favre, you are testifying before this committee today
amid allegations of fraud, and you are alleged to have used
funding meant for low-income families to help fund a volleyball
center at the University of Southern Mississippi.
And as you can see behind me, these are texts between
yourself and Nancy New, who pled guilty to similar charges back
in 2022. You have denied knowledge of TANF's stated purpose--
although it is frankly in the name, Temporary Assistance for
Needy Families--and you also stated in your testimony that you
want to help protect TANF presumably from people like yourself
who use it for unrelated spending.
I am going to set aside the fact that not knowing the law--
so not having knowledge of the law is not an excuse for
breaking it, and that is a concept that my son even understood
at 10 years old. You stated that you are here today to
encourage the federal government to increase oversight for the
TANF program, but sitting here today, I don't know that you
possess any credentials that make you any kind of expert in
TANF or how funds are allocated. You have never worked with
TANF funds or you have never received them. So I am going to
direct my next question to somebody who is actually a subject
matter expert on TANF.
So, Mr. Dortch, you were one of the early advocates who
called attention to the corruption in Mississippi's TANF
program. I just want to know, how do you think families were
directly affected by years of bad or negligent actors who
misused those funds?
Mr. DORTCH. Well, thank you for the question. Mississippi
does have a history of making it hard for people to be able to
access benefits that they are entitled to. I think what you see
with TANF is a lot of people don't even try. They give up. They
don't think that this program is going to assist them. If
anything, they think that they could get in trouble by trying
to get assistance from this program.
And the funny thing about it is we have a State director
who says just as much, and he is like, we can't get people to
come apply, and he wonders why. And I am like, you have a
history of punishing people if they make any mistake, and the
assistance that is available is not enough to really support
anyone.
So you don't get cash support. You don't get all these
other job support things that you need. They have made it a--
people are really just too afraid to even approach the TANF
program.
Ms. SANCHEZ. But if people were able to access TANF funding
and if TANF funding did the things that it was intended to do,
how could that make a difference in these families that are
struggling to make ends meet?
Mr. DORTCH. I think what we have seen, especially with
programs in Jackson, the Magnolia Mother's Trust, is that
people that get cash assistance--they are able to buy groceries
for their families. They are able to buy things for their
children. They are able to get the space to breathe to be able
to do things, like apply for--apply to go to school, and look
for other jobs. They aren't so pressured in life by trying to
make ends meet when they can't make those ends meet.
There are too many people in our State that are just
lacking the resources, and to see that millions are going out
the window and not helping anyone--it is really frustrating.
Ms. SANCHEZ. Does it make you angry?
Mr. DORTCH. Yes.
Ms. SANCHEZ. It makes me angry, too.
Mr. DORTCH. For about six years.
Chairman SMITH. The gentlelady's time has expired by 50
seconds.
Ms. SANCHEZ. I yield back the balance of my time.
Chairman SMITH. There was no balance.
Mr. Ferguson.
Ms. SANCHEZ. Well, there were many Members that went over
their time, Mr. Chairman, but I will accept it.
Chairman SMITH. Not Republicans today.
Dr. FERGUSON. Thank you, Mr. Chairman.
And, you know, Mr. Favre, I want to thank you for coming.
Unlike my colleague, I am not mad at you about much, but I am
mad that you couldn't stay with the Atlanta Falcons. You know,
what could have been.
But, beyond that, you know, I appreciate you being here,
and I appreciate you coming knowing that you were going to get
asked some tough questions, because I know you are trying your
best to make sure this doesn't happen elsewhere, right? So
thank you. Thank you for stepping up and doing that.
And do you think, based off of your knowledge and what
happened in Mississippi, if Congress doesn't act, this may
happen in other places?
Mr. FAVRE. Quite frankly, I think if nothing is done, it
will happen in other places and does happen. So, first and
foremost, something needs to be done to make sure people get it
that need it.
Dr. FERGUSON. Thank you. You know, a lot of conversation
today on lifting people out of poverty. It has been my
experience, and growing up in West Point, Georgia, we saw the
effects of what happened when you lose tens of thousands of
jobs primarily as a result of decisions that are made by this
place. We lost about 35,000 textile jobs in our area following
NAFTA.
And in the following years, we watched a lot of people fall
into poverty, and they get trapped in a cycle of poverty
because they don't have--they don't have access to the jobs
that they once did. And it is pretty painful to watch your
friends and family, you know, lose what they had.
And you can--I think the right thing to do by our--you
know, to help our most vulnerable is to do just that. It is to
help, you know, make sure that they have got some resources so
they have got a chance to get through the bind that they find
themselves in when they don't have access to a good-paying job,
whether they lost that job are whether they are looking for
their first job.
But, you know, Mr. Underhile, I really appreciate your
story, and it reminds me of a lot of folks back home that just
really had to fight and scrap to get over that hump. But, you
know, I think you are right in that if you don't have a job,
you are never going to get over that hump. You are going to
keep running into that same hump.
And could you talk just a little bit not just about, you
know, getting over that hump, but, you know, some of the
barriers that a lot of people in poverty face trying to get
from point A to point B? Whether it is education? Whether it is
the financial cliffs that occur when you start making money and
your support--your safety net just goes away altogether? Do you
think it would be more advantageous to have a safety net system
that gradually went down as the individual found success, you
know, in the workplace?
Mr. UNDERHILE. I think that would be extremely beneficial.
Like you said, when you do get gainful employment, your
benefits or welfare or whatever you got coming stops, and you
may not be over that hump yet. And if you don't have, like you
said, a little bit of a safety net that would help you get over
that hump--that way, when you are on the other side, you have
gained the knowledge and experience to proceed without it.
Dr. FERGUSON. Yeah. You know, I think people get trapped in
cycles of poverty, not because they are not trying to get out,
but, I mean, if you get a job and you are making $15 an hour,
and then all of a sudden, your benefits are cut all the way
back, you are losing money, right? So you have got to have some
sort of tapered program.
And let me say this about jobs. You know, in rural
Mississippi, Mr. Dortch, I think you were talking about how
there are just some counties where there just aren't jobs,
right? And listen, being from Georgia, we have got some
counties like that as well. And a job 25 miles away might as
well be 150 miles away, you know, if you can't get there.
But I think we have got--and one of the reasons I think it
is so important we are talking about this with job creation is
to think about what happens in the coming years and doing
everything that we can to make America the most competitive
place in the world to do business and grow jobs. America works
when Americans are working.
And we have got to be creating jobs in all of our counties,
and some of those may not be traditional manufacturing jobs.
They may be technology jobs that really, quite candidly, give
people access to a digital economy and a great way to make a
living that they currently don't have.
So I just recognize the challenge in a rural county. You
know, when you are poor in a rural county, you are not Black,
White, Hispanic. You are just poor in a rural county, and you
need a little help to get over that hump. And we need to be
growing this economy at an exponential rate to help our fellow
Americans.
With that, Mr. Chairman, I yield back.
Chairman SMITH. Thank you.
Ms. Sewell.
Ms. SEWELL. Thank you, Chairman Smith.
You know, I came to the House Ways and Means Committee to
fight the war on poverty, not to hurt the impoverished, and I
think that today's testimony and today's hearing puts a
spotlight on what I think is a glaring problem, which is the
fraud and abuse.
You know, we have heard time and time again that the false
narrative, in my opinion, is that the people living in poverty
seek to take advantage of this public lifesaving program like
TANF when, in fact, I think this hearing has shown that major
fraud occurs when these programs on the state level are taken
advantage by state officials entrusted to manage these
programs, not by struggling parents and families.
Most TANF recipients in my district, I have to say--and I
understand half of the families receiving TANF includes support
for our children. So the face of TANF in so many ways are our
children. That makes, I think, the fraud and abuse even worse,
because we are literally taking money out of the--you know, out
of the hands of children. This misuse of TANF funds poses a
serious threat to those health conditions and make life even
more difficult for those children and their families.
I think we need accountability, but at the same time, I
would like to explore what states like Mississippi are doing. I
represent the state of Alabama, and we make it very, very
difficult for people to apply for TANF.
And I would like for you, Mr. Dortch, to talk a little bit
more about what the barriers are and what reforms. You know,
this hearing is really about acknowledging a problem. All of us
acknowledge it, but what are we going to do about it, right?
And I think it is appalling that, if the state of
Mississippi is receiving funds back because of this fraud and
abuse, that they are not directing those funds to the needy
families that didn't get the funding they needed because of the
fraud. That is one reform. And I know that the Integrity Act
that many of my colleagues are authors of and I support would
do just that.
Can you talk to us about what the reforms should be?
Mr. DORTCH. Sure. You know, as I mentioned before, the
requirement that you do an upfront job search is something that
definitely needs to end. Drug testing requirements, that
prevents people from applying. And we know everyone that has
used drugs is not a terrible person or a criminal. But if you
know that that is in your system, you are not going to apply
for these benefits.
And, also, the sanctions that can happen when a person
fails to make a meeting--a routine meeting with their counselor
with TANF. You can be sanctioned in other areas and lose
benefits.
There are so many things that are put in place to make it
difficult for people to be able to access benefits, and that
prevents folks from even trying to get it.
Ms. SEWELL. In so many ways, what you are saying is that
people distrust the system and also that we set up barriers
that make it much, much harder for real needy families to get
help.
And, you know, I think that we have to work with the state
level. When we send these funds down, we need to give the
proper guardrails and put those proper guardrails and not leave
it to ambiguity--so much ambiguity that this abuse could
actually fall within the realm of possibility and therefore
happens.
And so, look, I think, Mr. Dortch, if you can talk a little
bit about, you know, the punitive nature of a lot of these
barriers.
Mr. DORTCH. Yeah. I mean, it starts from a place of the
government not trusting folks and being punitive to low-income
folks.
We apparently trust a program to receive $86 million a
year, even though they have committed outstanding acts of fraud
and there are no requirements and no sanctions put on that
program. But people that are receiving just $260 a month, we
want to check their income every month. We want to verify that
they went on a job search. We want to drug-test them.
We want to scrutinize them as much as possible when--I am
simply saying that I don't distrust everybody in my State. I
don't start from a place thinking someone is trying to game the
system. I think people are trying to do good by their families,
and they are trying to make it in a tough place to make it. And
to treat people essentially like they are criminals and have
their tax returns even audited for receiving benefits is insane
to me, and it is very hurtful as well.
Ms. SEWELL. And it seems to be costing the children who it
is supposed to benefit their ability to get ahead.
So, Mr. Chairman, before I close, I just want to reiterate
that I think there is a lot of bipartisan support in us coming
together and trying to find some solutions, and I for one would
love to help lead that charge. Thank you.
Chairman SMITH. Absolutely. Thank you.
Mr. Estes.
Mr. ESTES. Thank you, Mr. Chairman, and I would like to
yield some time to Mr. Ferguson.
Mr. FERGUSON. Mr. Chairman, I would like to submit two
letters for the record: One from the California Welfare Fraud
Investigators Association and the United Council on Welfare
Fraud. They are both applauding this committee for having this
hearing.
Chairman SMITH. Without objection.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. FERGUSON. Thank you. I yield back.
Mr. ESTES. Thank you.
Thank you, Mr. Chairman, for holding this important
hearing.
And thank you for our witnesses for being here to highlight
some of the issues that we are facing and some of the things we
want to make happen to get positive output and results with the
TANF system.
I am glad we are talking about how we can reform and
improve TANF to make sure the beneficiaries actually benefit
from they are meant to be served. We have been talking a lot
about the need for guardrails to prevent misuse of TANF funds
and for making sure that funds get to the right recipients.
Today, I want to highlight a TANF-funded program that has
been a great success and a responsible steward of critical
taxpayer monies. JAG-K, or Jobs for American Graduates in
Kansas, is part of the national JAG program that offers
students in grades 6 through 12 the tools they need to
successfully transfer from postsecondary school, the military,
or directly into the workforce with marketable skills.
Participants in the program face multiple barriers to succeed
from their JAG-K career specialist that helps them overcome
through a nationally accredited, evidence-based model. As one
student said, ``JAG-K teaches us how to set goals and
accomplish tasks necessary for success.''
I have met some of these students and can attest to how
impressive they are and how much they credit JAG-K for helping
them get where they are. In Kansas, JAG programs serve
approximately 6,200 students in 48 school districts across the
state, including 805 high school graduates last year. JAG-K has
exceeded national standards in the top major success categories
since the class of 2014, and unlike some of the data stated
today, the administrative costs of JAG-K are less than 9
percent of the total budget.
JAG-K also goes to great lengths to protect TANF funds and
the integrity of its funding. The JAG-K team submits a budget
at the beginning of the year and, each month, itemizes expenses
against the budget, submitting receipts and documentation to
support those expenditures. They are audited annually and
independent auditors test their internal controls.
In addition to the financial reporting, JAG-K submits
monthly programming status reports and quarterly progress
reports towards performance measures. JAG-K then produces final
reports on both TANF expenditures and program outcomes.
The success of the JAG-K program, both in its student
outcomes and in its responsible stewardship of taxpayer monies,
shows how appropriately used non-assistance TANF funds can make
a positive change in society. With the right changes and
guardrails in place for TANF, more and more of these well-
funded and well-functioning and successful programs can serve
people in need across the country.
As we have observed in Kansas with JAG-K, flexibility in
how states use non-assistance funds has allowed states to fund
highly successful programs that follow this period of TANF, but
clearly, there are room for improvements.
Mr. Adolphsen, as we think through possible reforms, what
suggestions do you have for eliminating potential abuse while
still maintaining flexibility for states in truly successful
programs?
Mr. ADOLPHSEN. Thank you, Representative, for the question.
Another great example you just highlighted of success in the
program. There is a lot of it. Obviously, we are talking about
misuse, but there are some great programs out there.
I would suggest a couple things. First is measure
performance. And we need to do that very well, and we don't
often enough. And so what do I mean by that? Every participant
that comes in the program that we are helping walk through with
case management, with job support, with cash assistance, we
should follow that person when they leave the program into
their job. Did they stay at the job 30 days? Sixty days? Ninety
days? What happened? Did their incomes go up? And when we do
that, you start to see which programs work the best, and we can
put more resources towards those programs.
We did that in Maine with our case management group that
worked there, and it was amazing to watch those folks progress
and doubling and tripling their incomes over the next year or
two. So I think measuring performance outcomes of all these
programs is really critical stuff.
Mr. ESTES. Thank you. And we know assistance on--we know
spending on non-assistance as opposed to basic cash accounts
for 78 percent of all TANF spending, yet there is so little
data on the non-assistance funding services and tracking with
success.
So thank you. Thank you all--for the witnesses for being
here.
Thank you, Chairman, for putting this on.
You know, these are just some of the ways that we talk
about how we successfully use TANF programs and making sure
that successful programs like JAG-K can continue to deliver
results for those in need.
I yield back, Mr. Chairman.
Chairman SMITH. Thank you.
Mr. Smucker.
Mr. SMUCKER. Thank you, Mr. Chairman, for holding this
hearing today.
I would like to thank all the witnesses for traveling to be
with us here as well.
We have heard a lot about the importance of the TANF
program to help low-income individuals achieve independence
through connecting them with stable employment and
strengthening their families. We have heard also--we know that
states have a great deal of flexibility when determining how to
use the TANF dollars to best meet the needs of program
participants. And, of course, we have heard a lot about the
lack of proper oversight and accountability that has led to
significant abuses of the funds.
Mr. Underhile, we appreciate you being here and sharing
your story, and I think you have highlighted and you have
talked about--many of us have talked about the importance of
reentering the workforce, finding meaningful employment to
reach self-sufficiency, and I think that is really the ultimate
objective of a program like this, to help individuals achieve
self-sufficiency.
We have talked about a bill that Dr. Wenstrup and I have
introduced, and I just have a chart here to highlight, I think,
the importance of this bill. We mentioned the flexibility that
states have.
Only 8 percent of TANF--TANF is used for a number of--a
number of different ways by each state, but only eight percent
overall of TANF non-assistance funds were spent on work or work
education or training activities. That is the arrow you see. So
that little blue block just shows the amount of dollars that
have gone to directly help individuals get assistance and find
work. And so, I think it is a problem. It is an opportunity to
improve the system.
And, as I said, along with Dr. Wenstrup, I introduced the
Reduce Duplication and Improve Access to Work Act. That is
going to grant states flexibility to devote a portion of the
funds received to workforce training programs through WIOA, or
the Workforce Innovation and Opportunities Act.
So I would like to just talk a little bit--maybe, Mr.
Adolphsen, I will ask you. What kind of impact do you think
that legislation would have reducing--you know, if it is
successfully reducing duplication and allowing States to direct
more dollars towards getting more individuals into the
workforce, what impact would that have on recipients?
Mr. ADOLPHSEN. Sure. Thank you, Representative.
Two things come to mind. The first is it sends a good
signal--a strong, good signal that we are going to refocus and
rebalance the spending back towards the key objective of work.
The second thing is, you know, WIOA and the groups that
participate in that are especially skilled at getting people
back to work. That is what they do every day. So it makes sense
to partner with them.
I would make sure, certainly, that the rules of the
program, you know, follow that funding so that it stays
committed to helping the lowest-income people, adults with kids
in the house, and help them get back on their feet and back
into jobs.
So to have those guardrails with that funding would be
excellent. It would send a great signal that we are getting
back to work.
Mr. SMUCKER. You know, maybe a follow-up to that.
You talk about the guardrails, and I think it is important
that states have guardrails to prevent the kind of abuses that
we have seen in Mississippi and that we have heard in other
states as well, but on the other hand, you know, you want to
balance that, I think, with--sometimes, sort of, one-size-fits-
all guardrails, if you would say, or mandates out of D.C. maybe
don't always allow dollars to be used in the best way.
So what would be the balance? How would you suggest we
write these regulations so that we can prevent the kind of
abuses we have seen but also ensure that the States have the
flexibility to use the dollars in the best way they see in
their jurisdiction?
Mr. ADOLPHSEN. Yeah. It is a great question.
You kind of have to go back to the reason TANF was started,
right? To get off the trend of dependency and spending that was
ever-increasing. And what we have seen in other programs who
didn't go that way--the SNAP program, the Medicaid program--
they are now spending five times, seven times, eight times what
they did before, and more and more people are trapped in
dependency on those programs. So you don't want to undermine
that flexibility entirely. It is all about putting up those
guardrails.
And I would say one thing is require an annual audit. There
is too much discretion left up to State auditors right now to
get--you know, to hear from a whistleblower in order to look at
the program, and it is sporadic when the program gets checked.
It should just be a simple, basic, up-and-down look at all the
contracts and all the spending every year. That would be a
really basic guardrail. It would keep States flexible but also
protect against kind of the worst misuse.
Mr. SMUCKER. Thank you. I know I am out of time, but I
think that is great input and great feedback. Thank you very
much.
Chairman SMITH. Thank you.
Ms. DelBene.
Ms. DelBENE. Thank you, Mr. Chairman, for holding this
important hearing.
You know, I just want to highlight first that when we are
in a situation where we are right now where funding the
government comes down to the last minute because normal funding
bills aren't being passed, we put all the families on TANF at
risk. They don't know whether funding is going to come through
or not.
So I just want to highlight again that the political games,
the lack of leadership to move funding bills forward has a real
impact on people's lives and how important it is that we pass
full-year bills before the fiscal year starts.
Mr. Dortch, as a former state legislator, you worked
tirelessly to bring attention to the long-standing pattern of
corruption in Mississippi's TANF program. I wondered, one, can
you tell us--or share some of your former constituents'
stories, how that corruption impacted their lives and the
impact of bad actors who caused eligible applicants to be
denied assistance.
Mr. DORTCH. Sure. And a lot of the constituents' stories I
have heard--and this is called in, thanks to many of the
childcare operators in Mississippi, organizations like
Mississippi Low-Income Child Care Initiative, Mississippi Black
Women's Round Table, the Children's Defense Fund. It seems to
be that childcare centers and childcare all together is like a
nexus point where all of these issues with TANF and acquiring
benefits come together.
Like you have childcare operators that are employing people
that can qualify for TANF and have trouble getting those people
employed or keeping them employed or being able to keep that
person certified as a childcare operator. Then you have parents
that have problems with their childcare certificate, and it may
be impacted by them applying for TANF.
So a lot of these issues just really bubble up with folks
that are trying to do the right thing, and TANF can be more of
a penalty to folks than it is a benefit.
Ms. DelBENE. You know, what can be done to help support the
eligible--again, the eligible applicants who were denied
assistance because of corruption and bad actors?
Mr. DORTCH. Again, just keep it simple. We know what people
need. We know childcare is a big impediment to work. We know
that people cannot go to work if they can't travel and they
can't drive to a job. These are direct assistance--direct
things that can be given to folks or provided to folks that we
know will help them be able to work more. You can work more if
you are a parent and you have someone that can take care of
your children.
The absence of that is something that is jarring in
Mississippi, so we have to make that a priority. Innovation is
great, but let's make sure States are doing the basic things
that we already know work.
Ms. DelBENE. You touched on this a little bit in your--and
you said in your testimony, too, that the Mississippi
legislature has largely failed to address TANF fraud. What new
laws should the state legislature pass to reform its TANF
program to better serve the people of Mississippi?
Mr. DORTCH. I have got about a dozen I found and other
friends on the legislature found. I don't know where to start,
but oversight is a big thing. It was insane how hard it was to
get information from our TANF--on our TANF program even as a
State lawmaker. So transparency is a big thing.
I think making sure that money is going to people that need
it and that we increase the benefit because the benefit is
already too low. We need to make sure that as much is going
into childcare as possible. If that means transferring money
from the TANF program to childcare, I think that is great.
I still remember an opportunity that I had to ask the
former DHS director, who's since pleaded guilty to fraud, we
had a long list of people waiting to get childcare benefits.
And I asked him why can't TANF--if you have got all of this
money you are not spending, why can't you put this money into
childcare? And his response was, Well, we would have to create
another program.
And so I said, Create another program. You are being
creative with this Families First and letting them spend $50
billion on nothing. So just the attitude of we are not here to
help people, we are here to certainly punish people and make
things punitive on them.
Ms. DelBENE. Thank you. I appreciate it.
And I yield back, Mr. Chairman--Madam Chairman.
Ms. TENNEY [presiding]. The gentlewoman yields.
I now recognize Mr. Hern for 5 minutes.
Mr. HERN. We appreciate you all being here today.
While I didn't grow up in Mississippi, I grew up in
Arkansas in the Ozark Mountains. And, you know, I don't have to
go talk to constituents about this because I lived and breathed
this as a young child and lived on AFDC which was the prior
TANF back in the day.
And you still talk to family members who are perplexed when
I tell them after I got here and got on Ways and Means about
3.5 years ago, and I was on the Subcommittee on Work and
Welfare, and I learned then--and I just verified--134 programs
in the Federal Government spending over $1.1 trillion annually
for the social safety nets.
Now, there is $770 billion a year spent by State and local
governments, so almost $2 trillion annually. And if you are
poor in America, you would have a hard time believing that.
And as Mr. Dortch just said, it is insane to see the amount
of money that is going out of the Federal Government that is
never helping a single person, and it is really a sad, sad
notion, because this describes--TANF is just one of the many
issues we have in this area when you have this much money.
And, you know, as a Member of Congress for the last 5.5
years, what I find here is nobody has the intestinal fortitude
on either side to get rid of a program. We just put another one
on, and it becomes even more inefficient.
There are seven different cabinets that manage these
programs in the federal government, and they are not doing a
very good job. I think it is time we actually sit down and go
through every one of these again to see if we are actually
doing a great job or not.
There is a saying in business that marketing 50 percent is
bad. If you could figure out what that was, you would be a lot
more efficient. Probably half of this money that goes out is
going into places of fraud we are having to deal with when you
have state agencies that have all of this control and power.
You know, there is an old saying that says, ``if you give a
man a fish, you feed him for a day. If you teach him how to
fish, you feed him for a lifetime.'' And I think, Mr.
Underhile, that is exactly what you are saying is you have
learned how to fish, and you learned how to get a job and work.
What I find in my family members over the years is that
they have gotten very frustrated at the federal government, or
other people, because they have seen a similar lifestyle and
those people have gone on to success in life because they chose
the route you did, and I would argue one that I did, and
learned how to work, you got better, you got educated. Life was
tough.
Many times you thought it was unfair that you took the road
of hard knocks, but you are thankful for that now because maybe
siblings or cousins or uncles or aunts that you left behind,
they are very frustrated. They are jealous of you because the
government didn't make them what you worked your tail off to
get to.
That is the American opportunity that we need to continue
to protect. And we have got to help people get off--you know,
up, have a hand up and not continuous handouts. And the
education part, as my colleague Mr. Smucker said, is really
important. When I first moved to Oklahoma, I had the
opportunity to chair a seven-county workforce WIOA board and
where all of the agencies and all the different groups came
together on education, how to get people, you know, a job so
they could get a better job so they could get a career. This is
what this place is supposed to be about is helping those who
need help.
And we are not doing a really good job of it. This and
other committees have the jurisdiction of that. We need to
pause for a minute because we are not doing right by the
American people. And some say, ``well, you know, how much are
we helping?'' Well, since our war on poverty since 1965, $30
trillion has been sent out to the American people, out to the
States. And we have been woefully ineffective in making that
work.
We still have places like in Arkansas, Mississippi, and
Oklahoma that really need a lot of help, Missouri needs a lot
of help. And we need to stop and pause. And if we really care
about the American people, it is not about the money. We have
got the money. It is just that we are not being effective in
these programs.
So, you know, I would love for you to one more time for the
record tell your story about what it meant for you to get a
check and to grow that check and to get that first job, a job
to get a better job to work on a career. I think it is a story
that every American needs to hear that thinks there is no hope
in America.
Mr. UNDERHILE. You know, the SkillUP program that I went
through when I went to school, had they not given me the $15 a
day--as long as I attended school that day, I got $15 a day to
help for gas for a 60-mile round trip every day, that took a
burden off my wife. And I just--I understand having to have
transportation back and forth to work and programs to provide
that, and I just--everybody wants to talk about the kids, the
kids, the kids.
Well, the kids are victims of their parents. We are all in
charge and responsible for our own choices. If those programs
are available and I have to take a drug test to be available
for that program, if I want my kids a better life, stop doing
drugs. Get up and go to work every day.
I mean, the programs are there. Yeah, they are probably
difficult, and some of them are difficult to get signed up for
and get what you need and--but they are there, and you are
responsible for yourself and your family. Get up and do what
you need to do.
Mr. HERN. I want to say thank you. We have run out of time
here, but I appreciate it so much, all of you all being here to
put a spotlight on this issue. Again, it is one of the many
parts that we need to get after. And I think everybody--it is a
bipartisan approach to make this work, and we have got to get
together and really help the American people.
Thank you all.
Ms. TENNEY. Thank you.
The chair recognizes Mrs. Miller.
Mrs. MILLER. Thank you, Madam Chair.
Thank you all for being here today. I really wish I had the
available time to speak with each of you because I think it is
just so important. And I am encouraged that we are taking the
necessary steps to ensure that TANF nonassistance spending has
appropriate oversight.
In reviewing the GAO's statement for the record
highlighting the forthcoming report from Chairman Smith and
Chairman LaHood requested to investigate TANF's nonassistance
spending, one of the things that disturbed me was how
widespread and repetitive TANF waste, fraud, and abuse is in
our country and how weak our accounting systems are to catch
and correct it.
According to the GAO, 99 of the 155 audit findings have
repeated for at least one year. In my home State of West
Virginia, they have had the same internal control deficiency
finding reported for 15 years, and nothing has been done to
correct it.
Mr. Favre, do you believe more scandals like the one that
you found yourself involved in in Mississippi is possible
across the country if we don't act now to reform and bring more
transparency and accountability to TANF?
Mr. FAVRE. 100 percent, absolutely. If it can happen in my
state, it can happen in any state.
And you just spoke on the statistics, and it is kind of
frightening, to be honest with you, what is being wasted.
Mrs. MILLER. Well, thank you for that answer, and I am sure
there is a lot more that you could say.
I will talk to Mr. Adolphsen a little bit as well.
TANF is our Nation's primary welfare program, but it is my
understanding that there are no federal guidelines about
eligibility and that there are issues about how funding is
allocated to the states. We know TANF is not allocated to each
state based on the number of families in poverty. But based on
your testimony, we know that you believe TANF could be better
utilized if that were the case.
For example, in West Virginia, we have historically had a
higher poverty rate compared to the rest of the country, and
that would mean that my home state would need more funds to
address the unique challenges and demographics of my rural
community.
What can we do on the federal level to make sure that TANF
money is actually getting to families in poverty and to states
with the highest rates of poverty?
Mr. ADOLPHSEN. Thank you, Representative, for that
question.
Just to mention, one of the things we could do right now to
stop this from happening is to actually enforce some of the
rules we do have. So California has been out of compliance for
15 years with their work participation rate. HHS has said that
there is a billion dollars in fines essentially that they
should levy, but they have written that down to $60 million.
We have these audits that you mentioned that the GAO is
looking at. The first and easy step is just to act on those
basic oversight measures that we can already take. And I think
just the question of the funding, it is exactly the right
question, how do we make sure--there is money in these
programs, right? There is unobligated funds. There is carryover
funds. There is a large outlay of funding to the States. We
need to make sure it gets targeted down to the folks who need
it the most.
We need to get into the rural areas, into the areas of each
State with the highest levels of poverty where they need some
cash assistance to help get back on their feet. And the way
that can be done is by making sure States use most of that
funding to meet the core objectives because those are going to
target those in poverty directly.
Mrs. MILLER. Well, the criteria--is there any other
criteria other than poverty rates that you believe actually
could be prioritized when determining which families receive
the TANF funds so that we can ensure that the neediest families
get it?
Mr. ADOLPHSEN. Yeah, good question. It should be--you know,
there should be some income thresholds associated with this
support and not just the cash support in the states but also
these other job assistance programs, education attainment.
You know, again, California spends a billion dollars a year
on tuition for higher education, for college. Well, that is not
directly for the purpose of the program when that has no income
threshold on it, and you have families well above the poverty
line, six figures, getting those tuition grants.
Mrs. MILLER. So they are working the system?
Mr. ADOLPHSEN. That has to stop in order to make sure we
can target the funds to those who are truly in need.
Mrs. MILLER. Well, thank you.
Madam Chair, I yield back my time. Thank you.
Ms. TENNEY. The gentlewoman yields.
We now will hear from Ms. Chu for 5 minutes.
Ms. CHU. I hope that every member of this committee,
regardless of party, can agree that a terrible crime happened
in Mississippi. It is outrageous that millions in federal TANF
dollars meant to support low-income families was used instead
to fund wealthy individuals and their pet projects such as
building a new volleyball stadium.
Congress member Bennie Thompson has written a series of
letters, very insightful and important letters, and one thing
struck me. He said, ``According to the audit that exposed the
scandal, Mississippi could have purchased roughly 3 million
diapers with the $1.1 million in welfare funds that MDHS paid
Brett Favre.''
And I acknowledge that you repaid the funds too. But to
think about what happened, that equaled about a year's worth of
diapers for 1,145 moms. Mississippi is one of the poorest
states in the nation, with 20 percent of the citizens living
below the poverty line. And even though Mississippi recovered
this money, the state is still not reinvesting the money in the
families that needed it the most.
And right now the federal government has no authority to
conduct oversight into how these states spend noncash
assistance TANF funds, which is about 80 percent of all TANF
spending.
And so while my Republican colleagues are focusing their
attention on individual TANF recipients, despite there not
being any evidence that these low-income families are
defrauding the program, Representative Danny Davis and I have
introduced a bill that would actually address what happened in
Mississippi by giving the federal government the power to
oversee how states are using funds and to require states to not
only recover misused funds but to return them to low-income
families.
So, Mr. Dortch, can you elaborate on what went wrong in
Mississippi, including why certain organizations were able to
misuse funds and why there is such a lack of transparency
around what happened and how the bill that Representative Davis
and I have introduced, the TANF State Expenditure Integrity
Act, would have helped?
Mr. DORTCH. Yeah. I mean, essentially there was a lack of
interest in what TANF was supposed to be in Mississippi, from
State legislators to the Governor. There was not--at some point
someone realized there was a big pot of money that we could
turn into a slush fund and that the legislature was not going
to look into it, that nobody was going to know.
And not only that, we confronted it as a success story
because instead of you coming--asking for these benefits at a
DHS office, we are going to send you to a nonprofit called
Families First and tell you that they are going to help you,
even though they provided no assistance.
As far as the legislation, the penalties, that is very
important, and it is important that you do it in a way that
penalizes the State and not the people in need. Mississippi has
routinely ignored directives to actually invest back into
people in need. Like, for instance, the State was cited for
failing to take care of foster children. And our foster
system--our foster care system was almost taken over. A court
ordered them to invest up to 30--invest billions of dollars to
hire new caseworkers and social workers. The State still did
not do that. They did you not make the investment. When they
started making the investment, they took the money from TANF.
So every year they have been appropriating $30 million from
TANF to comply with a court order to take care of foster
children. The State did not put up its own money and say, We
have been failing these children that are in our system. They
said, We will steal it from another program that is supposed to
go to needy people.
Ms. CHU. Yeah. Unbelievably, only four percent of those
eligible in Mississippi are able to get direct TANF benefits.
This is not a sign of success as some on this panel have
suggested. It is a crying shame, especially since the Census
Bureau has shown that child poverty in the U.S. is on the rise,
especially following Republicans's refusal to extend the
expanded child tax credit.
And so can you explain why families lose TANF benefits in
huge numbers?
Mr. DORTCH. Yeah. I mean, Mississippi, of course, makes it
very difficult for you to be able to get these benefits as we
talked about. There are so many barriers that prevent someone
from applying for these benefits.
As the state director has said, a lot of people don't know
how to access these benefits because we have had a system in
place where the state did not actually have a TANF program. It
outsourced it to a third party.
So the systems just aren't in place for the people to get
the assistance they need.
Ms. CHU. Thank you.
I yield back.
Ms. TENNEY. The gentlewoman yields.
The chair recognizes Mr. Kustoff from Tennessee.
Mr. KUSTOFF. Thank you, Madam Chair.
Thank you to the witnesses for appearing today.
Mr. Adolphsen, if I can with you, I know we have talked a
lot about TANF and the federal government and more than 80
safety net programs at a cost of over a trillion dollars every
year, and that is probably part of the problem. We know that
there are a lot of programs. They have a maze of programs. It
is challenging for states. It is tough to navigate for
families.
Can you talk about how TANF fits into the larger picture,
if you will, and how we can make sure that programs are not
duplicative, if that makes sense, and better coordinate the
welfare programs to families in need?
Mr. ADOLPHSEN. Sure. Thank you for that question,
Representative.
TANF is special in terms of all those myriad of programs
you talked about because it is the one that is really centered
around getting people back on their feet and eventually off
government dependence all together. And so it is unique in
that, and it plays a special role.
And, you know, a lot of the conversation even today you
hear is around the cash portion where someone receives some
cash on their card in order to help them. Well, it is to help
them eventually not need that anymore. And that is exactly what
it has done. And when you hear about it is difficult for people
to get, that is a statement about the cash.
And there is a time limit and a work requirement in place
for a reason, because folks coming in that door trying to find
their way out of government dependence and into self-
sufficiency, they need a timeline to work from. And that is
exactly what TANF has done.
There aren't those same time limits on case management and
job training and education and things that will help move them
up and out of poverty for the long term. And so that really is
TANF's unique role is dedicated funds to give people not just a
short-term handout but a long-term hand up and on to a job.
Mr. KUSTOFF. Thank you.
One of the reforms that this committee has led as part of
the Fiscal Responsibility Act was to have Health & Human
Services start collecting data on outcomes so that we could
improve transparency and also better understand what is
working.
Do you have any thoughts, if you will, about how we can put
in place outcomes, measures specifically for TANF nonassistance
that can help drive states towards the outcomes that we want to
see using any evidence-based approaches?
Mr. ADOLPHSEN. Yeah. I think that the rules that TANF has
in place now around work participation should follow TANF
funding wherever it goes. So you can--currently a State can
move 20 percent of the block grant to CCDF, another grant. They
can send 10 percent to SSBG, another block grant. But the TANF
rules around we need you to engage on job training don't follow
that money, and that is when you end up with these issues of
spending on things that are not directly over that target and
that mission.
And so I think one of the key guardrails would be to make
sure that thread is followed along with the funding wherever it
goes, that people need to participate in trying to get the
training they need to get into a job.
Mr. KUSTOFF. Thank you very much.
And, Madam Chair, I will yield back.
Chairman SMITH. Ms. Moore.
Ms. MOORE of Wisconsin. Thank you so much, Mr. Chairman.
And before I run out of time, I just want to acknowledge
and thank each and every one of our witnesses for appearing
here today. And I also want to acknowledge some of the people
who have shown up here in our audience, the Black Women's Round
Table of Mississippi, the Children's Defense Fund of
Mississippi, the American Civil Liberties Union. Welcome to the
Ways and Means Committee.
My name is Gwen Moore, and I hail from Wisconsin. And so I
don't feel the same way that the Bears fans feel quite clearly.
But I do want to say that I was at the scene of the crime
when we ended welfare as we knew it in 1996. I was in
Wisconsin. I was a state senator. I had a hundred amendments
that would have addressed this problem.
And what I am saying to you, I just want to repeat some of
the things that have been said here already, that this
flexibility was deliberate. Indeed I agree with Mr. Dortch's
characterization of it is that it literally became a slush fund
for states to do what they wanted to do.
In our own state, we literally had people called diversion
specialists, and it was their job to convince you when you
showed up pregnant and one baby on one arm and the other at
your feet that you didn't need welfare funds, that all of that
profit could be used to pay bonuses. I even had an amendment
that was directed at some of the vendors who administered
welfare, saying you can't earn more than the governor of the
state because these salaries were so lucrative. So, surprise,
surprise. Here we are, what, 28 years later discovering the
fraud and waste and abuse in this program. Give me a break.
Really? I am offended.
So now that we are here, I am just really happy to be
associated with Ms. Chu and Dr. Davis's bill. I am a cosponsor
of the bill that would remedy some of these things.
Let me start out by reviewing some of the testimony of our
witnesses here. I am going to start with you, Mr. Adolphsen. I
read your testimony, and I was very excited. I mean, I was very
stimulated to hear about how the reforms have worked, how the
13.7 million people who were dependent on AFDC cash assistance
were cut in half and how the single mothers leaving welfare in
the 1996 reforms entered the workforce in record numbers,
boosting economic growth and leading to declines in child
poverty.
And then we went on to hear about how they had higher
incomes, less dependency, and these able-bodied people found
work in 600 different industries, touching every corner of the
economy. Families saw their incomes more than double within a
year of--I mean, I got really excited. And then I started
reading the footnotes, and then I got a little disappointed to
realize that, like, this was, yes, 80 percent of the people in
the first couple of years after TANF in the $16.5 billion where
you see we are receiving some sort of support from TANF. And
then I have data here--and I will ask unanimous consent to put
some of these things in the record, because it really didn't
square with what we know is that we have the same level of
poverty. We have, you know, 80 percent of the people who
qualify, people who live in deep, deep, deep poverty, not
getting the benefits, people in Mississippi getting--what did
you say, Mr. Dortch--$236 a month in 2024. That is the truth.
These data are not updated, is not true.
I just want to go on to talk about some other things that I
saw in the report. You said that--oh, and also, some of your
data, the 600 industries, that is in Maine. So I want to
congratulate you with whatever you did in Maine. Whatever in
Maine didn't happen in Mississippi, so--just saying.
I also want to talk a little bit to you, so--and I want to
know, Mr. Dortch, do you find it surprising, based on your
experience as a state legislator who couldn't get any answers,
that deep poverty rolls among Black and Latino children in the
decade of the 1996 law creating TANF and that indeed more than
half of these folks don't just live in poverty, at the poverty
level, but they are, like, 50 percent of the poverty. They are
living in deep, deep, deep poverty. Does that surprise you?
Mr. DORTCH. No. I think there is some correlation between
the people that are hurt by the problems with TANF and the
interest from the State in actually addressing those issues.
Ms. MOORE. Okay. And just let me--before my time expires, I
just want to say a couple of things to our other witnesses.
Mr. Underhile, I think you would be a great peer support
specialist. I wish TANF could be used so you could get that
degree to do that. I think the increased earnings for your
family of nine people would be something I wouldn't begrudge
you.
And I am a fan of the Green Bay Packers. I want that on the
record, Mr. Chairman. And I know that Brett Favre knows better
than anybody that in a foul situation, it is the second player
that gets the flag.
And I would yield back.
Chairman SMITH. Thank you.
Let's put on the record that I am a Kansas City Chiefs fan.
Ms. Tenney.
Ms. TENNEY. Thank you, Mr. Chairman.
And I just want to say thank you so much to our witnesses
for--this has so far been a very, very interesting and
insightful hearing all the way. This has been phenomenal.
And I just want to ask unanimous consent to enter into the
record a report by the Department of Health and Human Services
entitled ``New York Did Not Have Adequate Oversight of its
Reported Temporary Assistance for Needy Families Program
Expenditures.''
Chairman SMITH. Without objection.
Ms. TENNEY. Thank you, Mr. Chairman.
This report is so important because it highlights the need
for flexibility but also the need for accountability in how
taxpayer funds are being spent. And I heard--one of the most--
and all of the witnesses have been great for various reasons.
And I want to just say one of the most important things that
was said in this hearing was by Mr. Adolphsen, and he said,
Work is central to the well-being of human beings.
Thank you for saying that because the whole point of this
program is a work program, a welfare-to-work program. And when
you see somebody like Mr. Underhile--I hope I pronounce your
name right--it is such an honor to meet you and your wife,
really, really. You are a testament to the success of this
program. You are someone who have been through tough times. The
TANF program has given you an operation, an opportunity, you
and your family, and you are a true inspiration and your wife
to raise your children to do what you have done to overcome.
And I echo the sentiments of Ms. Moore, you should be
continuing to help other people where this program has worked.
Unfortunately, states like New York spend so much of the
taxpayer dollars and are not accountable. Our own federal
government has looked at New York and said that they have not
adequately documented the uses. They have to prove that it is
necessary, reasonable, and the allocation of these funds are
used to the performance of TANF, getting people back to work.
Financial management systems weren't in place properly in
New York. They didn't permit tracing of funds to see where
these funds were going. And that is what we are really getting
to.
I think both sides of the aisle agree, it is not people
like Mr. Underhile. It is not Mr. Favre. It is the
administrators of the program in Mississippi, in New York, and
other places that haven't been good stewards of taxpayer money.
We agree this program works. And you, Mr. Underhile, are a
beautiful example of how this program works and why we need so
many other people to come out of poverty to do that.
And my own father was a poor person with eight--you know,
seven brothers and a sister. They didn't have access to
programs like this, but they went to work, and they understood
the dignity of work and what it did to free them from some of
the issues they had and to become successful human beings and
wonderful parents as you and your wife talked about in the
back.
I just want to first, though, say something--a little bit
about what we are doing on this. And under current law, TANF
does not include a requirement that federal funds be used to
supplement existing state spending; that is, states can use
federal TANF funds to finance activities that previously had
been state and local responsibilities.
This has allowed states like New York to use these TANF
funds to supplant state spending, fill budget gaps, so long as
they can justify the program funded fits one of the four
purposes. We know that New York wasn't able to do so this. This
only encourages poorly run states to further mismanage hard-
earned taxpayer dollars.
It is why I have introduced a bill called the Protect TANF
Resources for Families Act. That means money is going to go to
people like Mr. Underhile. It requires states to treat TANF
funds as a supplement, not a substitute for existing state
welfare spending. In doing so, my bill will help federal
dollars go farther and have a larger impact and more people can
be included.
So I want to just thank you, Mr. Adolphsen, for pointing
this important thing out.
I do want to say something, though, to Mr. Favre. And I
know we have had a lot of kidding aside, I am a Bills fan, so
it is ``Go Bills'' for us, and we crushed it last night,
wonderful game against the Jaguars. And I am a huge Josh Allen
fan, but I was also one of your fans.
So I wanted just to ask you about the mismanagement in
Mississippi and the audit by New York and ask you if you could
maybe comment on the millions of needy families across the
country that policymakers are trying to protect and why it is
so important for us to institute this program, particularly my
bill, to make sure that we have oversight and accountability in
place and that these funds go to people like Mr. Underhile. If
you could address that just real quickly.
Mr. FAVRE. Well, thank you.
You said it about as simple as you can say. You know, we
need to get the funds to the people who absolutely need them.
And our federal government, you guys, are the ones that can get
that done. You know, it is sad what is happening in Mississippi
not only to me but to the many children that have had to suffer
because of it.
And as I said earlier, you know, I am not the smartest
person in the room, and there has been a lot of things that
have been tried, but the oversight has got to improve,
absolutely has to improve. I think mechanisms have been in
place or seemingly have been in place, but for some reason,
they have failed in a lot of states. And, you know, I don't
know if we need to do more programs or just clean up what we
have, but oversight is certainly very important.
Ms. TENNEY. Thank you for being here today, and I really
appreciate it. I know your name and your fame have brought
attention to this very important issue. And we just wish you
the best with your recent diagnosis.
Mr. FAVRE. Well, thank you.
Ms. TENNEY. And thank you for being here. We know it is not
easy for you, and we appreciate you highlighting this really
important issue.
And to all of the witnesses, I just want to say thank you
again.
And thank you, Mr. Chairman, for having this great hearing.
Thank you.
Chairman SMITH Mrs. Fischbach.
Mrs. FISCHBACH. Thank you, Mr. Chair.
And, you know, I just wanted to comment, Ms. Moore said she
was in the legislature. I was also in the Minnesota State
Legislature when we dealt with this, and I thought--you know, I
didn't have a hundred amendments, probably had a couple at the
time, but I thought we did a fairly good job. The problem was
that over the years so much has been undone, what we did there
in the late nineties but over the years has been undone.
And so I did mention I was from Minnesota, so I have to say
something about it, and we really appreciated your years with
Minnesota, but my staff makes me add, you know what, we don't
appreciate your time with the Packers beating up on the
Vikings, so----
But, in all seriousness, I genuinely appreciate all of the
witnesses being here because, you know, it is important that we
hear from folks, particularly Mr. Underhile, Mr. Favre,
taxpayers. You have experience. You know, you understand. And
so I appreciate you being here, because in the end, that was
one of the things in Minnesota that we had to remember as we
went through this. And while we are here, we have to remember
it too is that it is taxpayer dollars that we are talking
about. And so that accountability, that oversight, the
requirements that we have on that is so critical.
But, Mr. Adolphsen, I just wanted to ask you, you know,
there are statutory purposes for TANF. And, you know, we had a
bill awhile back about pregnancy care centers, and I know there
was talk about Mississippi policy, but other abortion policies.
So pregnancy care centers provide so much help there, and they
offer a variety of services, support for mothers, families, and
fathers. And they offer counseling, ultrasounds, parenting,
prenatal education, diapers, all kinds of things.
In your opinion, do those pregnancy care centers such as
the ones with some of the things that I mentioned fit into one
of those purposes for TANF, at least one of them?
Mr. ADOLPHSEN. Yeah. Absolutely, yeah. You know, the four
objectives of TANF, to help needy children be cared for in
their home, to reduce government dependency of parents, prevent
out-of-wedlock pregnancies, and the creation and formation of
two parent families, I think it is pretty safe to say those
community-based pregnancy centers fall within that scope.
Mrs. FISCHBACH. So I feel like it is very important, you
know, for those needy families, the pregnancy care centers not
only provide tangible material supports, but they also offer,
like you mentioned, promoting strong families and marriage.
However, you may be aware--and we had legislation last
fall--the Department of Health and Human Services Office of
Family Assistance Administration for Children and Families
proposed a rule that could restrict States from using TANF
funding for pregnancy care centers. And the Biden-Harris
Administration argues that pregnancy care centers should not be
eligible for that for a variety of reasons, but one of those
because they only help women after they become pregnant, which
to me doesn't make sense.
But, you know, how important is it that Congress exercises
its authority to reform TANF through statute to provide States
with clear and reliable rules for TANF instead of depending on
Health & Human Services to issue regulations and guidance?
Mr. ADOLPHSEN. Thank you, Representative. Yes, it is a
great question.
I think absolutely things need to be clear in statue. It is
an issue. I saw that in the agency. If there is any vagueness
in the law, bureaucrats will make the law, and that needs to be
dealt with.
I think one of the solutions is having state legislatures
sign off on these TANF plans. They need to have oversight over
them and not leave it solely up to the folks in the department
to make those calls.
So I think statutory clarity is good, again, just balancing
with the flexibility that has been successful I think is
important, but putting in guardrails so that it is all done
within the lines and statue would be great.
Mrs. FISCHBACH. And I appreciate that because I think
sometimes, you know, with the guidelines and the rules, I
sometimes call them D.C. neat ideas. They don't understand that
really--you know, they are passing a lot of these regulations
and so-called guidelines, they don't really understand what is
happening on the ground and the necessity and importance of
what they are doing.
But I appreciate it. Thank you much.
And thank you for all of you for being here.
And with that, I yield back.
Chairman SMITH. Thank you.
Mr. Kildee.
Mr. KILDEE. Thank you, Mr. Chairman.
And I thank you and the ranking member for holding this
hearing, and hearings are important. Don't get me wrong. It is
important that we understand, you know, the factual basis for
taking legislative action. I just hope that we end up taking up
some action as a result of this.
There have been several references to legislation that Mr.
Davis and Ms. Chu have imposed that would empower the
Department of Health and Human Services to have the authority
to crack down on these instances that we are hearing about
right now. So let's commit to not just having a hearing and a
discussion. A conversation isn't going to stop this, this
problem.
And it is also true that we need to recognize the fact that
TANF has been set at $16.5 billion since 1994. So in real
dollars, it is not providing the kind of help that it really
should and was intended to provide.
The other thing I want to point out is the focus
particularly being on child poverty, the child tax credit, the
enhanced child tax credit was allowed to expire, despite the
objections and serious efforts by the Biden-Harris
Administration, Democrats on this committee in particular, that
child tax credit, that enhanced child tax credit made a real
difference. And I think--I know some disparage it because it is
providing direct support to these kids in the form of payments,
cash payments to families. But let's not forget the affect that
lifting those children out of poverty for those early years of
life has on their long-term trajectory. Breaking that cycle of
poverty is one of the things that the child tax credit has
allowed us to do. It is a lifeline for millions of Americans,
and, you know, it has been supporting in a bipartisan fashion
for a long time. We ought to support getting back to that
enhanced child tax credit.
In my hometown--where am I from?
Ms. MOORE of Wisconsin. Flint.
Mr. KILDEE. Flint, Michigan--I have to mention it at every
opportunity. But, you know, we have done some really important
work. Building on the success of the enhanced child tax credit
led by my very good friend, a pediatrician by the name of Dr.
Mona Hanna-Attisha--we call her Dr. Mona--she has piloted a new
program that provides critical financial support to moms and
babies in that very first year of life to disrupt the cycle of
childhood poverty and clearly improve their long-term
prospects.
This is work that is really important to the people I
represent, and it is work that makes that community just a
better place. Unfortunately, that child tax credit and the
other supports that came with it were allowed to expire, 3.7
million people thrust back into poverty. That is not good.
So, Mr. Dortch, I wonder if you might just speak from your
perspective on the urgency or on restoring the enhanced tax
credit and investing in programs like the one that Dr. Mona--I
am not sure if you are familiar with it, but it is called Rx
Kids--how those programs ensure that those kids have a better
chance, better trajectory in life and potentially break that
cycle of poverty.
Mr. DORTCH. Yeah. And I think--I will start by pointing out
in Mississippi that when people lose their TANF benefits, we
know it is supposed to be temporary. 70 percent of them lose
their benefits for something other than eligibility or income.
So people aren't working their way out of poverty, they are
just being kicked off because of how the rules are set up to
not give them the assistance.
And you know I always--I want somebody to learn how to
fish, but I don't want their families to starve while they are
waiting for bait. So you can do both. You can assist people and
make it--give them the skills and help them get the skills they
need to get a job while also making sure they are not starving.
The program you are talking about sounds a lot like the one
we have in Jackson with Magnolia Mother's Trust where they
provide $1,000 to low-income moms, moms living in poverty, but
they also provide one-on-one assistance. They help that person
be able to move out of poverty. It is not just--it is not a one
thing or the other.
Mississippi is actually choosing to do neither. So we are
not giving people money, and we are not helping them get the
job training they need. We are doing God knows what with the
money. I mean, you know, 4 years ago we know what we were doing
with the money. We were spending it on horse ranches, paying
Mr. Favre here to make appearances at events, you know.
The other thing that I think about is if someone in
Mississippi is accused of doing something--accused of
misspending $50 in SNAP benefits, that person's life will be
turned upside down. Mr. Favre is right here, and he is accused
of misspending a million dollars, and he is speaking before
Congress. Something is wrong when we let that stay in place.
And for 4 years in Mississippi--I know Mississippi might be the
extreme, but the people in Mississippi still need the
assistance. So if the system allows what happened in
Mississippi to take place, it definitely needs reform.
Mr. KILDEE. Thank you, Mr. Dortch I particularly appreciate
you giving that final point. We have to hold everybody to the
same standard, and it is sometimes distressing to see that that
is not taking place.
With that, I thank the chairman for the additional time.
And I yield back.
Chairman SMITH. Thank you.
Mrs. Steel.
Mrs. STEEL. Thank you, Mr. Chairman Smith and Ranking
Member Neal, for hosting this hearing on how funds are being
used to target families in need, connect people to work, and
improve accountability.
I just want to go to Mr. Dortch that, you know, you said
that some of the requirements to apply, that it is actually
preventing them from applying because they might use drugs. And
do you think those people that--this TANF program is helping
these poor families get back to work. Those people who are
using drugs, do you think that they are going to get back to
work and get out of poverty? And what kind of requirement do we
really need?
Because in California we have a lot of homeless people, and
then we try to put them into the shelter and clean them up and
then make sure that they get back to work. But you know what, a
lot of people that face drinking and smoking and, you know,
using drugs, they don't want to go back. And it is the problem
right now that we have.
So what kind of requirements are you talking about? And,
you know, I barely listened to you, just only for that part, so
can you elaborate for that?
Mr. DORTCH. Yes. Mississippi has drug testing requirements
for anybody applying for TANF. Those requirements are in place
to essentially punish those folks if they have that in their
system. But, you know, we live in a real world where we know
that there is drug use and that people that are using drugs,
they are the people that we should be trying to assist and not
telling not to come to our agency. We have got people that need
help finding their way out of drug problems, I mean.
And then when you look at what happened in Mississippi, we
spent thousands of dollars sending someone to drug rehab
through Families First, but we don't allow people that smoke
marijuana to be able to qualify for TANF benefits.
Mrs. STEEL. But I really don't believe that those people
still--I mean, going to rehab and trying to make sure that they
clean them up and then they apply it, I think that is going to
make real sense, because this is the government taxpayers'
money trying to make them get back to work.
But you know what, I am going to go back to Mr. Adolphsen
because in California we have a lot of problems. In your
testimony you provided the example of how California has
redirected more than $1 billion per year in federal TANF funds
to pay for college grants. It is mostly like nearly 650,000
college grants. This is not the families that they really need
to help. And then, you know, they cannot really escape the
poverty because they don't need these college funds.
As you stated, California's Joint Legislature Budget
Committee blankly refers to this scheme as the funds swap and
funds shift commingling the funds whereby the state used TANF
funds to replace general funds expenses.
So could you please elaborate for how to stop more about
how California is spending TANF grants so that middle class
families can go to college, not those families that are in
poverty? And then California puts TANF funds into the general
fund and how Sacramento is basically steadily sending
nonassistance funds to cover other budget costs and things they
want to spend in. We really have a problem because this is for
families in poverty. They really need money to get back to
work.
But, you know what, California is not actually following
those rules, and they are just commingling all of the funds,
and it goes straight into the general fund.
How are we going to stop this?
Mr. ADOLPHSEN. Thank you, Representative.
Yeah, there is a real issue there. And I mentioned earlier,
California State government isn't doing its job either. They
need a work requirement because they are not engaging
participants in TANF in helping them get back on their feet,
and that is why they failed their work participation rate for
15 years. That isn't the fault of the people who need the help.
It is the fault of State government who is failing them, and we
need to make sure and hold the State accountable for helping
people like they are supposed to through this program.
I think there has been bills introduced by this committee.
And, interestingly enough, you know, part of the rule posed by
the Biden-Harris Administration is to cap at 200 percent
receipt of nonassistance. That would take care of the billion
dollars California is using to backfill their general fund,
which they need because they are, you know, $70 billion in the
hole giving Medicaid away to illegal immigrants.
Mrs. STEEL. Well, yeah. They took $332 billion from
insurance interest programs, relief program during the COVID,
so we really have a problem. But we had in California a $92
billion surplus two years ago, and now suddenly we have a $70
billion deficit. So if we do exactly opposite of what
California does, I think we are going to be successful.
Thank you, Mr. Chairman. And I yield back.
Chairman SMITH. Thank you.
Mr. Steube.
Mr. STEUBE. Thank you, Mr. Chairman.
As we got in today to discuss the Temporary Assistance for
Needy Families program, it is essential that we start by asking
the fundamental question. Is this a government program truly
helping American families to escape poverty or has it become
just another wasteful government initiative riddled with
inefficiency, fraud, and abuse?
Already in this hearing we have heard many examples of
shockingly inappropriate uses of federal taxpayer dollars. This
is important. This is not one state wasting their own money.
This hearing is about states wasting our federal dollars.
The responsibility to safeguard the integrity of federal
dollars is the federal government. But if we have these
extremely large and vague programs sending money to
questionable nonprofits that we don't know the names of, we
cannot be good stewards of taxpayer dollars.
Let's be clear, waste, fraud, and abuse in TANF are not
just isolated instances. They are widespread. Countless federal
taxpayer dollars intended for struggling families have been
misused, misspent, or misallocated. Fraudulent claims, misuse
of funds, and lack of oversight are rampant.
The federal government was never meant to be in the
business of long-term welfare. Our Founding Fathers understood
that a centralized federal government would be inefficient in
addressing the unique needs of local communities. Yet with TANF
and other similar welfare programs, we have allowed bad actors
across the country to take advantage of our federal dollars in
the name of allowing states and localities to handle their own
welfare systems.
I will start with Mr. Favre, a question to you. As you
mentioned in your remarks, it has come to our attention that
the state of Mississippi is using TANF funds to pay private
lawyers for this ongoing litigation. I have some questions
about the legality of using TANF for these funds. To me it is
still diversion of funds and just adding insult to injury.
Do you know if the state is doing this and whether they
have been able to provide an explanation for that?
Mr. FAVRE. That is--my interpretation is that they are
being paid with TANF funds, and I am not privy to any
explanation.
Mr. STEUBE. How confident are you that the state of
Mississippi is using TANF funds for lawful purposes and that
guardrails are in place to protect the funds?
Mr. FAVRE. At this point, I am not sure.
Mr. STEUBE. How does a nonprofit or individual that abuses
TANF funds earn back the trust of its community? Can it take
back the trust of local, state, and federal government?
Mr. FAVRE. I think that will take some time and hard work.
It is as simple as that.
Mr. STEUBE. Okay. Thank you.
Mr. Adolphsen, in my remaining time, is there answers to
those questions that you would like to expand upon?
Mr. ADOLPHSEN. Sure. Thank you, Representative.
I think just on the last question, all that was discussed
today about guardrails and oversight, that is going to help on
the receiving side too, on the nonprofits or other groups that
end up receiving TANF to provide services. The checks and
balances help them because sometimes with all the commingling
of the funds and the grants that come down, they aren't clear
on the rules either. And I think shoring that up and putting
those guardrails in place will help and clearly restore some
trust as well along the way.
Mr. STEUBE. Do you think that a lot of these functions of
TANF would be better suited at the state level in state
programs instead of a large federal bureaucracy?
Mr. ADOLPHSEN. Yeah, absolutely. You know, the closer--I
think anytime we are administering aid, the closer you can get
to the person receiving the aid, the better. And I have seen
that, you know, work on the ground. The person who is sitting
across from them finding out what are their barriers to work,
what is--you know, what do they need to overcome, what kind of
support do they need, that is really the person who knows how
that--how we can turn that into a successful example, like the
one we have here today.
And so we want to get the decision-making about how to help
the person as close to that as we can. But we also need those
boundaries, those hard-level guardrails and oversight to make
sure they don't stray.
Mr. STEUBE. So I represent a district in Florida, and in
Florida I served in the state legislature, and you have
programs that help needy families. So if I am hearing you
right, it would be beneficial if there are pieces of TANF that
we think as a body would be better served at your local, state,
and community levels to be able to effectuate those programs
and ensure that fraud and abuse and those types of things
aren't going on, is that something that you think you would
support that kind of change?
Mr. ADOLPHSEN. Yeah. I think that the state level is the
right place to operate these programs. However, if the federal
government is paying for them, there needs to be proper
oversight in place to manage that.
Mr. STEUBE. Thank you for your time.
I yield back.
Ms. TENNEY [presiding]. The gentleman yields.
The chair recognizes the gentleman from California, Mr.
Panetta.
Mr. PANETTA. Thank you, Madam Chair.
And thank you to Chairman Smith and Ranking Member Neal for
this hearing.
And, gentlemen, thanks to all of you for taking the time
today to be here and not just sit through this hearing but
provide meaningful information that, hopefully, we can use to
ensure that we provide the solutions that are necessary for the
issues that we are hearing about.
Look, I think we can all agree and you are kind of sensing
the bipartisan support for TANF, but I think it is based on the
fact that nothing should unite us more than the well-being of
our children. And outside of the Child Tax Credit, the TANF
program is the largest source of cash assistance to low-income
families in the United States.
Nationwide, nearly 70 percent of TANF recipients are
children, and in my home state of California, the TANF program
serves more than 605,000 children and nearly 307,000 families.
Under CalWORKS, the program responsible for allocating TANF,
the average grant under CalWORKS--under that program was just
over $1,000 a month. Now, for families in need, that can be the
difference between paying bills, losing a home, or clearly
putting food on the table.
The TANF program not only makes a difference for household
expenses, but it really can permanently lift people out of
poverty like we have heard today. Moreover, due to the
flexibility in TANF on how to use Federal dollars, CalWORKS put
nearly $1.28 billion into employment services in the 2022-2023
fiscal year.
Unfortunately, though, as we have heard today, this
flexibility has allowed bad actors to abuse the system, and
that is why we still have to--we have got some work to do--I
think we can all agree to that--to address the fraud in TANF
while preserving, though--preserving and expanding these
critical programs to serve our neediest constituents.
Now, Mr. Underhile, in your testimony, you talked about the
impact of the Missouri Excel Center SkillUP program and the
impact it had on helping you turn your life around. Looking
forward, if you were designing a job training program to help
other people in your position, is there anything you would do
differently?
Mr. UNDERHILE. I would make job training the focus of it,
the transportation, and not put limits on who is qualified. I
know certain people that I went to school with that needed the
SkillUP program for assistance didn't qualify because they were
a single male with no kids. So they didn't qualify for
transportation money. They didn't qualify for anything,
honestly.
I think that training people to work and getting them back
to work--I mean, welfare wasn't ever meant to be a career
choice. And, honestly, if you don't care enough about yourself
and your family to want to get out of that, then you don't
deserve the funds to begin with.
Mr. PANETTA. Understood. Understood.
Mr. Dortch, you talk about the considerable resources
Mississippi has put into fraud prevention, and it sounds like
you see this as taking away from the people TANF is meant to
serve, at least is my understanding.
How much of this fraud is driven by individual TANF
recipients, and how much do you see it as at the institutional
level, like organizations misusing funds and if there were
certain guardrails that Congress could put in place to let
states like California keep their flexibility in the TANF
programs it administers while continuing to prevent abuse and
misuse of funds?
Mr. DORTCH. Yeah. So Mississippi--when I was in the
legislature, we passed something called the HOPE Act. This bill
required agencies like DHS to put in place additional income
verifications and have the contract with a third-party vendor
to do those income verifications.
So the current state director of the agency over TANF has
asked the legislature for, like, 40 years now to repeal that
act because he said it is wasteful, these are redundant
policies, they are paying for nothing, and it is costing the
State money. It is costing the state TANF money, and we are
doubling- and triple-checking people when there are systems in
place already for that.
So, because of politics, even though this Republican-
appointed director of DHS has asked for this, the legislature
is still keeping it in place. I mean, there was no point in
having it when it passed, but to have the evidence come from
the state that it is actually hurting them--and it may end up
costing them SNAP benefits because of all the high error rate
that it is causing, and the legislature just shrugs and says,
well, we will keep it in there because we are going to be hard
on welfare benefits.
Mr. PANETTA. Okay. Thank you. Thanks to all the gentlemen.
I yield back.
Chairman SMITH [presiding]. Thank you.
Ms. Beth Van Duyne.
Ms. VAN DUYNE. Thank you very much, Mr. Chairman.
You know, state programs funded by TANF non-assistance
dollars are designed to help countless Americans rise out of
poverty through programs providing work support, education,
training, reducing dependency on government. States are given
significant flexibility when determining how to allocate these
dollars, allowing programs to be tailored to meet each state's
needs.
For example, Texas has provided funding to more than 20
different programs supporting thousands of individuals through
access to opportunities such as adult education and literacy
and after-school programs.
When TANF funds are utilized the way that they were
intended, we have seen incredible success stories from those
who have filled education gaps, benefited from specialized
training programs, and received childcare assistance. However,
the drop in welfare caseloads and the dramatic shift in
spending from direct benefits to non-assistance programs has
also allowed an unprecedented amount of fraud and waste, as we
have recently seen in Mississippi.
It is vital that we maintain TANF's flexibility while
implementing necessary safeguards to ensure tax dollars are
spent responsibly and benefit those that are most vulnerable.
It is also important that we don't forget that our aim here is
not to arbitrarily strip benefits from those in need but to
encourage Americans to achieve success and self-worth.
We have heard Republican states don't spend enough on basic
assistance or the benefits they do spend are small in
comparison, but I want to add that there is some context to
this. It is based currently on--TANF funding is not allocated
to states based on poverty. Let me repeat that. The way that it
is allocated right now is not based on need. Instead, states
are allocated TANF dollars based on what they received in 1996,
nearly 30 years ago, not the number of children and families
below the poverty level today. And, as a result of population
changes, Republican States get significantly less money in TANF
allocation than Democrat states.
For example, in my home state of Texas, we receive $318 for
every child in poverty, the lowest proportional TANF grant in
the country. Meanwhile, New York receives nearly $3,000 in TANF
funding per child. So any conversation about Republican states
not providing enough basic assistance needs to recognize that
this is a very important fact that Republican states are
getting significantly less dollars per family in poverty than
our Democrat peers.
Mr. Underhile, I want to commend you. I really appreciate
your comment that welfare was never meant to be a career
choice. It was very succinctly said. As you have heard, we are
not all succinct in our comments, and it was a very powerful
statement. I appreciate you coming and sharing your experience
with this program with us today.
Mr. Favre, I appreciate the fact that you are here as well.
It seems almost as if you are a victim of your own celebrity in
this. Not everybody knows what these funds are used for or
where the grant dollars come from. I really appreciate you
coming and sharing your story.
I am interested, though, because I saw some of the
headlines that had come out. Were you contacted by anybody else
that had felt like they had been kind of abused of this? Or
what has been the response that you have gotten, and why did
you feel it was necessary to come today and share your story?
Mr. FAVRE. Well, thanks for asking.
No, I haven't heard from really anyone else. Coming here,
as I said earlier, is twofold: So it doesn't happen to someone
else, what has happened to me, but also we get the funding to
who needs it and it is used as it is supposed to.
I had no idea what I was getting into. I was only trying to
do something good, and by no means did the term TANF or welfare
ever--was ever mentioned until after the fact, and that needs
to change. And so, I mean, it has been a rough 3 to 4 years.
You know, people in Wisconsin and Mississippi, I think, for
many years, maybe--I can't say they necessarily liked me, but
they appreciated the way I played and so on and so forth, but
after--and really across the country. Whether you are a fan or
not, I was well received pretty much anywhere I went. That
changed, understandably so. The fact that I was branded as a
person who stole welfare money, that is the lowest of low, and
it couldn't be further from the truth. So I don't wish this
upon my worst enemy.
And, hopefully, as I said, we can get the money where it
needs to go, we can get better at oversight, and this doesn't
happen to someone like myself in the future who is trying to do
something good.
Ms. VAN DUYNE. Well, I appreciate the fact that you had the
integrity to return the dollars and to make sure that your name
is cleared. I really appreciate your testimony here today.
Mr. FAVRE. Thank you.
Ms. VAN DUYNE. Thank you to all the witnesses, and I yield
back.
Chairman SMITH. Mr. Moore.
Mr. MOORE of Utah. Thank you, Chairman Smith, for holding
this very important hearing.
And it is actually--one of the most important things we can
do from this hearing is highlight what in the world is TANF
because far too people--far too few--no one in our country
knows what this is, and it has been a significant portion of
our budget for many years. Look, I am going to--I would love to
jump right into it.
Mr. Favre, you know, as former quarterbacks, you and I--we
have so much in common. You are a Hall of Fame quarterback, and
I am a red-shirt freshman from Utah State. You are a Super Bowl
champion. I led a late fourth quarter comeback for the Snow
College Badgers against Pima Community College back in circa
2001. These are all well documented. I am sure you have heard
of them.
And we are both predecessors to what we hope to be--me at
Utah State and you at Green Bay--to one of the best Packers to
ever play the game in Jordan Love. Obviously, you are
everybody's favorite Packer, but we hope Jordan Love has an
incredible trajectory going forward as he is from--played in my
home state.
But, on a serious note, the other thing we have in common
is that you and I want to make sure that TANF dollars are spent
responsibly and that they are done for the purpose of what they
are supposed to do.
You talked to me before the hearing and then you have
mentioned it here. You had no idea what TANF was. This is my
biggest frustration with anything that we deal with from our
mandatory side of the budget. We have a mandatory budget,
otherwise known as direct side, and then a discretionary
budget, our appropriations bills. And those bills get voted on
every single year, and they are able to sustain a small one to
three to sometimes four percent growth rate.
But these other programs that we--they are intended to do
the right thing, they are enacted, and then for decades, we
don't touch them. Is it any wonder that, A, no one knows about
them, and, B, they have all of these wrongdoings?
And we talked a lot about the Mississippi situation that
you didn't even know you were a part of. We have got several
other states that have all gone through major, major improper
payment at a minimum, fraud gets involved in all of this stuff,
and it is no wonder. It is because we, as Members of Congress,
are not able to vote on this stuff on an annual basis. It is my
biggest frustration.
I don't want to make you regurgitate everything, but I do
want to just highlight--and let me say, my heart goes out to
you and your family for your diagnosis. It is catching some
media that you have announced this morning you have been
diagnosed with Parkinson's. My heart goes out to you. I think
you will continue to be an inspiration to people in numerous
walks of life because you have been to our--you know, the
sports world at first and then just trying to do good. And you
get caught up in stuff, but you are here, and you are trying to
make awareness on something that needs to be----
So, outside of the awareness issue that you are providing
today and the general--you mentioned, you know, there needs to
be more accountability and more guardrails. Let me just throw
out one more thing. We have a bill--we have introduced a bill.
It is called the Restoring Temporary to TANF Act. Temporary
Assistance for Needy Families. We want to make it as temporary
as possible.
Mr. Underhile, you mentioned it. As the ranking member
points out, this needs to be a bounceback. You need to be able
to take advantage of this program and get yourself back up on
your feet.
Any thoughts to the importance of workforce? This would
actually require 25 percent of these dollars to be set aside
for work activities, getting people the job skills that they
need to be able to get out on their own again. Any thoughts to
how--would that be something that fits into your realm of what
you envision for this program going forward?
Mr. FAVRE. Yeah. And listening to everyone up here today,
jobs seems to be the same theme, and I agree. There is nothing
better than doing a job, whether it be at your own house or at
work and feeling confident of the job that you have done, and
it pays. So it is twofold. It makes you feel good about
yourself, but it also pays you a salary. So I think it
definitely is a big part of success or lack thereof.
Mr. MOORE of Utah. It is part of how we want to make this
program a very productive program. We need a chance to roll up
our sleeves and deal with this legislation and not just let it
go on autopilot for years and years and years until more
improper payments and other bad activity takes place.
It is an honor to meet you, sir.
Thank you to the other witnesses today. We appreciate your
stories, and I look forward to hopefully working together on
this in the future.
Chairman, I yield back.
Chairman SMITH. Mr. Schneider.
Mr. SCHNEIDER. Thank you, Mr. Chairman.
And I want to thank our witnesses for your patience staying
here.
As it was just touched on, Mr. Favre, I am sorry to hear
about your diagnosis of Parkinson's. I actually lost my uncle a
year ago today. He had a 35-year battle with Parkinson's. I
know the impact it has on a family. If he was still alive, he
would have been thrilled to meet you. He was a huge sports fan.
And, Mr. Underhile, I want to thank you for your courage to
come and share your story with us. A truly inspiring story. You
talked about the challenges you faced and overcame, but you
also laid out very clearly that, with a hand-up and people
saying we have got your back, you are on a path to chart your
own new course.
And I think that, as we talked about, is the whole purpose
of why we do programs like TANF, Temporary Assistance for Needy
Families, to help someone who is down on their luck or whatever
the circumstances may be to get back on their feet and to
succeed.
And that is why I am frustrated that, as we are wrapping up
September--a less-than-productive September here in Congress
after almost two years of less than productive--on this
committee, a less-than-productive two years, we have had no
hearings in this committee on childcare, we have had no
hearings in this committee on paid family medical leave, no
hearings on the Earned Income Tax Credit, on the programs that
can actually make a difference in people's lives and help us.
I think we do have common ground across both sides of the
aisle here of wanting to help lift up people. We recognize
that, especially with TANF, there is a lack of oversight, and
we need to be implementing oversight to ensure that we don't
have stories like we have heard today.
Mr. Dortch, if I turn to you. I know it is not news that,
in Mississippi, one of four--or only four out of every 100
families living in poverty receive any assistance--cash
assistance from TANF. Making matters worse, in 2020, a state
audit shed light on the horrifying intentional malfeasance in
the state TANF program, alleging that tens of millions of
dollars were spent in questionable ways, something that we
should not accept or tolerate in any way.
Congress took a critical step toward investing in families
and caregiving when we provided the Economic Impact Payment
stimulus in 2020 during the pandemic when we passed the
American Rescue Plan in March of 2021. In fact, ARPA, the
American Rescue Plan, strengthened income support for families
by temporarily expanding the 2021 Child Tax Credit,
significantly investing in childcare. And, as was mentioned
earlier, that investment in the short period of a single year
cut child poverty in this country by nearly a half.
Mr. Dortch, given your expertise, what are the best uses
you see of TANF funds that will alleviate poverty, and how can
Congress work to ensure that those funds are reaching the
people who will benefit them and not being redirected or
misdirected to folks who have no need or no use for these funds
other than enriching themselves?
Mr. DORTCH. I really think having the cash resources to be
able to survive is important. Putting wraparound services with
that is also important.
But let's remember, in Mississippi, when the Child Tax
Credit happened, our income--our State income levels went up.
Our economy went up. Our tax revenue went up. This is because
people in Mississippi who never had disposable income actually
had disposable income, and that disposable income stays in the
community.
In counties that don't have jobs, they will eventually have
jobs if you have people that can actually spend at a grocery
store. We have pockets of our State where there are no grocery
stores and people have to drive 30, 40 minutes to be able to
shop.
This isn't just about, you know, giving someone a check. It
is about investing in people that don't have the resources to
be able to lift themselves up because of the nature of our
State and the nature of our economy. Our State is different
than others, but the fact that we are not even trying to
address some of these issues is heartbreaking to me.
Mr. SCHNEIDER. Thank you. I am going to steal back my time
just to close.
A great rabbi, Maimonides, created a hierarchy of charity,
of helping others. The worst is to do it reluctantly. The best,
the highest way to help someone, is to teach that person the
skills and give them the resources to get a job, to take care
of themselves, and take care of their family.
Mr. Underhile, you touched on that in your comments, and I
want to thank you again for that. What we should be doing is
making sure every single dollar we commit to invest in families
and invest in children gets to the people who need it and it is
not redirected for other reasons.
With that, I yield back.
Chairman Smith. Thank you. We have 374--votes have been
called. We have 374 people that have not voted. We are going to
try to see how far we can go.
Mr. Feenstra.
Mr. FEENSTRA. Thank you, Mr. Chair.
Thank you to each one of our witnesses for coming and your
testimony.
You know, TANF gives states the flexibility to determine
how they will help struggling Americans get back on their feet.
The flexibility is a powerful tool that TANF has, allowing
programs to be catered to the unique challenges of each state.
In Iowa, TANF funds are used for family investment programs
to provide direct assistance to families, but it also has a
program called PROMISE JOBS that helps them find a job so they
no longer need to be on assistance and so they have a purpose.
I have three great stories. A 29-year-old father who got a
commercial driver's license now is a trucker that got off TANF.
A 25-year-old single mother who supports her children now does
not have to be on TANF. And, finally, a 33-year-old, a mother
who had a criminal record but was connected through PROMISE
JOBS and found now a great-paying career to support her two
children.
Mr. Underhile, you have an amazing story, just like the
three stories I have noted, and I am very proud of what you
have done to turn around your life and have a purpose with this
position you have.
Just like Iowa's PROMISE JOBS program, Missouri has SkillUP
program, which is awesome. And a lot of these programs just
like you are in have a component called peer mentors so that
they can share common experience and trust while you are
working through the real difficult challenges.
Can you share--you are now a peer support specialist. Thank
you for doing that. Can you talk a little bit about that and
why it is so important that we need peer specialists in these
positions?
Mr. UNDERHILE. You need somebody sometimes just to talk to,
somebody that is relatable, somebody that has been through what
you have been through. It is hard to open up and talk to people
that you don't relate with, and having that support system just
increases your chances, honestly.
And with the education like the Excel Centers that are in
Missouri--I don't know if any other States have them--but to be
able to go back to school as an adult and get your high school
diploma and it not cost you anything and have the assistance
there to get you back in the workforce and educate you, why can
we not support that more than we are?
Mr. FEENSTRA. Absolutely. I thank you for that. You know,
like you said, with peer mentors, if we can work alongside
somebody and make sure they are successful, you know, that is
what this is all about. We want them to be off TANF and to have
great careers and be successful and have a purpose in life.
So I found it interesting. You said that you found SkillUP
on Facebook, and that scared me a little bit. Like, okay, why
aren't we pushing this out a little more? Can you explain that
just a little bit? You know, what should we do to promote these
different programs like Iowa has with PROMISE JOBS? You have
SkillUP. I mean, to me, this is the difference maker.
Mr. UNDERHILE. Absolutely. I think marketing and getting
this out there is--I don't know why we are not doing more. We
should be doing everything we can. There are a lot of people
that have no idea the opportunities that are out there.
Mr. FEENSTRA. Exactly right. Thank you.
Mr. Adolphsen, you pointed out in your testimony that, of
31 billion of TANF funds that went out in 2022, only 2.5
billion went to jobs, training, and education such as PROMISE
JOBS and SkillUP. Can we talk about this? Should we expand
these dollars? How do we make it more important that we try to
figure out jobs and opportunities instead of everyone just
staying on TANF?
Mr. ADOLPHSEN. Great question. Unfortunately, ``if you
build it, they will come'' doesn't work here. You have to go
find those people. We have the money. This program has the
money. We are looking at these unobligated balances.
You talked about promoting those great programs you have in
Iowa that are working well. We need to get people that are
coming in the door for every welfare program. Food stamps,
Medicaid--those programs have grown by tens of millions since
TANF was instituted, and the objective is to reduce government
dependency, not just TANF dependency.
And so that is the place we need to capture those folks,
bring them in, and get them in these good programs.
Mr. FEENSTRA. You nailed it. Absolutely. We want to get
them off subsidies. We want them to have great jobs. And we can
do that, but we have got to find them and make sure that the
programs work for them. But, to me, it is the states' job and
whatever we can do.
Thank you for your testimony, and I yield back.
Chairman SMITH. Mr. Gomez.
Mr. GOMEZ. Thank you, Mr. Chairman.
I will be honest. I was a little confused when we announced
that we were going to have this hearing, and that is just
because of the fact that my Republican colleagues haven't
really talked about how to help working families since I have
been back on the committee.
Here, let me throw out a question out there. What is the
number one state with the highest maternal mortality rate in
the country? Mississippi, right? There are programs out there
that can have a profound impact on poverty in Mississippi, on
lifting up people, reducing the maternal mortality rate. One of
them is expanding Medicaid in those states.
It is not surprising that most of the states with the
highest maternal mortality rates in this country are the same
states that haven't expanded Medicaid. It is something that
that state could do right away. But we haven't had a hearing on
that, how the Affordable Care Act has cut maternal mortality in
this country with the states that actually implemented it, but
then we are having a hearing on TANF and fraud.
You know what? Fraud has no place in any program. And the
reason why I care about that--it is not only because it is
protecting the tax dollars, but because it undermines the
public's confidence that a program actually helps the people
that it is intended to help.
The American people, I believe, have a big heart. They want
to help folks when they are the most in need and especially
make sure that they have an opportunity to succeed. I mean,
that is what makes this--I think this country great. It is that
caring for one another. I care about what happens to folks in
Mississippi because those are my brothers and sisters as much
as the people in my congressional district in Los Angeles. Any
kind of poverty in this country is an affront to our values.
So I do believe we have to do something about TANF. That is
why I join my colleagues, Representative Davis and Chu, in
introducing the TANF State Expenditure Integrity Act, and this
bill would establish a TANF program and target a unit at Health
and Human Services to prevent and root out potential misuse of
federal funds by state governments.
But my worry about this hearing, it is not really about--
people will use it as an excuse to add more barriers to
preventing people from actually getting the help that they
need. We have seen it before. You know, that system is broken.
Let's change it.
I knew about TANF back in 1997 when I was actually a
college student and I was interning for a Republican county
supervisor in Woodside, California when it was switching over.
And it was--back then, it was about how do you kind of make
these programs work better?
But this program used to serve 80 percent of needy families
three decades ago. Today, it just serves about 20. Does that
sound like it is an effective program? Why aren't we looking at
it like, hmm? But why is it, right? And I don't think it is--
and I think it is because a lot of the extra requirements in
some states that are making it impossible for people to use.
Mr. Dortch, can you talk about some of the barriers like
upfront job search requirements that families face in accessing
TANF programs?
Mr. DORTCH. Sure. And that is one of the most striking
requirements that prevent people from being able to access the
program. And we are not just talking about cash assistance. We
are talking about everything from the wraparound services that
folks need.
When poverty has been so criminalized in our State, people
don't want to come to a place where they feel like they are
going to be the subject of some type of investigation. I mean,
after the TANF fraud, we literally passed a bill to allow the
State auditor to audit the tax returns of people that receive
these benefits even though there was no necessary reason for
it. People don't want to feel like they are going to be looked
at as a criminal when they come to something.
So, when we talk about people not accessing, not coming in,
not knowing what TANF does, in our State, it is not a friendly
place for you to go to. You don't feel like that is somewhere
you need to check in to see if those resources are available.
Mr. GOMEZ. And that is kind of a great point, is that, if
we add extra barriers, it makes it difficult. One of the
greatest successes we have had--we talked about it--is the
enhanced Child Tax Credit that cut child poverty by 50
percent--actually, 40 to 60 percent depending on the
community--and it is because it had--it got the money out
quick, it got it to the people who needed it, and there were
appropriate checks to make sure that those people actually were
supposed to get that money, right?
If we want to look at programs that succeed and how to make
it work, especially for poor working-class folks, let's do it.
But to kind of, like, single--to do TANF and to say that we
care about working people, I am not sure if that really passes
the smell test.
I am willing to work with my colleagues on the other side
of the aisle. We have some good ideas on ours. Let's get
together and have the conversation on how to move forward.
Thanks.
Chairman SMITH. Mr. Carey.
Mr. CAREY. I want to thank the chairman and I want to thank
the witnesses.
First, unlike most federal programs, TANF does not have the
obligation or spending deadlines for the funds. In fact,
according to GAO, the amount of unspent TANF funds has more
than doubled from $4 billion to $9 billion since 2015, and in
2022, 45 states and the District of Columbia had unspent TANF
funds. This is a shame, as Congress appropriates the money to
help needy families.
And that is why earlier this year I introduced the Improve
Transparency and Stability for Families and Children Act or
H.R. 7410. This bill would ensure that states aren't sitting on
unused TANF fund year by year by establishing a two-year period
for obligating the funds for an additional year to spend each
fiscal year with a grand award.
Now, I have a lot of questions for you, but we do have to
go vote.
And, with that, Mr. Chairman, I yield back.
Chairman SMITH. Mr. Horsford.
Mr. HORSFORD. Thank you, Mr. Chairman, and to the ranking
member for holding this hearing. I will attempt to be brief as
well.
Mr. Favre, I want to thank you for your courage and bravery
in sharing your diagnosis today, and all the best to you and
your family. And for those suffering with this as well, making
sure that they also have the resources and the providers to
receive the care that they should.
You know, what is interesting, also, about this hearing is
the fact that--I am from Nevada. I ran one of the largest job
training programs in Nevada before I came to Congress. In fact,
we were one of the leading providers for workforce training to
move people from welfare to work.
But the question is, what kind of work? And, unfortunately,
today in America, six million workers make as little as $2.13
an hour because of a subminimum wage that they are paid,
particularly tipped workers. It is under the law that they are
paid as little as $2.13 an hour, and this is really a Jim Crow-
era policy.
It is why I have introduced a bill called the TIPS Act to
eliminate that subminimum wage, to raise the wage, and to
eliminate the income tax on tips because that also can't cover
the cost of rent, childcare, and utilities.
But, since its inception in the 1990s, Nevada has
historically received limited levels of federal TANF funding
due to historically low state investment in its predecessor,
the Aid to Families With Dependent Children program. In fact,
according to analysis from the Center on Budget and Policy
Priorities, Nevada has only raised the maximum monthly TANF
payment by $40 for a single-parent household over the past 30
years. When adjusted for inflation, this modest increase
actually translates to a 40 percent reduction in the real value
of direct assistance to families.
Recognizing the impact of direct assistance, last Congress,
we worked hard to expand and enhance the Child Tax Credit
through the passage of the American Rescue Plan. In my state
alone, approximately 353,000 families received $449 per month,
and 40,000 of Nevada's children were lifted from poverty into
the middle class thanks to that Child Tax Credit.
So, Mr. Dortch, in your experience, what are the tangible
benefits of expanding access to cash assistance to working
families, and how could this be an effective complement to
expanding access to affordable childcare, healthcare, and
housing?
Mr. DORTCH. I think what you saw in our State is that that
improved our economy. That created more jobs. That allowed
people to have increased income to be able to spend money in
their community.
As you mentioned, jobs in itself is not just the answer if
you are in a place where there aren't any jobs. And there are
so many places where the vast majority of people are working in
service jobs that pay low hourly wages, and there aren't plants
or manufacturing jobs in most parts of our State. So these are
jobs that depend on money circulating in the community. And we
don't have those jobs because you have so many people that
don't have disposable income to be able to purchase anything
more than what is necessary. In a lot of cases, not even that.
So we saw an increase in incomes in our State and we saw an
increase in tax revenue in our State. I think our State
economists have acknowledged this. Our political leaders have
not. They just say our economy has been great because it has
been great, although, you know, if you step out of Mississippi,
the economy is terrible everywhere else.
But, in Mississippi, we have benefited from those
investments because it added to the revenue moving through
Mississippi.
Mr. HORSFORD. Well, I just hope that we would look at some
of the best practices of policy that works, and the Child Tax
Credit works in lifting children and families with children out
of poverty.
And we also need to look at jobs that pay poverty wages,
and $2.13, to me, is a poverty wage in 2024. You cannot pay the
rent. You cannot cover childcare. You can't buy groceries and
utilities on $2.13 an hour. So, if we are serious about
addressing inequities, then I hope my colleagues would join
with me in moving forward the TIPS Act.
With that, I yield back.
Chairman SMITH. Thanks.
I would like to thank our witnesses, again, for appearing
before us today.
Please be advised that Members have two weeks to submit
written questions to be answered later in writing. Those
questions and your answers will be part of the formal hearing
record.
With that, the committee stands adjourned.
[Whereupon, at 1:57 p.m., the committee was adjourned.]
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