[Congressional Record Volume 140, Number 101 (Thursday, July 28, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 28, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                           REFORMING WELFARE

                                 ______


                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                        Thursday, July 28, 1994

  Mr. HAMILTON. Mr. Speaker, I would like to insert my Washington 
Report for Wednesday, July 27, 1994, into the Congressional Record.

                           Reforming Welfare

       Most of the people I talk to think the welfare system 
     requires radical change. They say that welfare costs too 
     much, saps the spirit of recipients, and discourages work and 
     marriage. In many ways the current system is at odds with the 
     core American values of work, family, and responsibility. It 
     does not reward work; too often it discourages work. It does 
     not strengthen families; it penalizes two-parent families. It 
     does not instill personal responsibility; it lets many absent 
     parents off the hook. It does not promote self-sufficiency; 
     it often encourages dependence.


                           the current system

       Welfare is made up of several need-based programs: Aid to 
     Families with Dependent Children (AFDC), the Earned Income 
     Tax Credit (EITC), Medicaid, and food and housing benefits. 
     AFDC provides cash assistance to needy families in which one 
     parent is either absent, disabled, deceased, or unemployed. 
     Those receiving AFDC are eligible for Medicaid benefits, 
     which cover doctor and hospital costs for the poor and long-
     term disabled. Many also receive food stamps and housing 
     subsidies. EITC offers a tax credit for the working poor 
     employed in the private sector.
       Five million households, including 9.6 million children, 
     currently receive welfare benefits, a 31% increase since 
     1989. The recent surge is largely due to the recession, the 
     scarcity of good-paying jobs for the unskilled, and the rise 
     in households headed by single mothers. AFDC recipients are 
     typically mothers with little education or work experience 
     and with small children at home. The average welfare family 
     has two children. In 1991, 38% of the recipients were white; 
     about the same percentage was black and approximately 17% 
     Hispanic. Over a lifetime more than one third of all 
     recipients receive benefits for less than two years, about 
     one quarter for eight years or more.
       States administer AFDC and set eligibility standards and 
     maximum benefit levels. The federal government pays at least 
     50% of a state's AFDC benefits and administrative costs. In 
     fiscal year 1993, combined state and federal AFDC benefits 
     totalled $22.6 billion, with families receiving on average 
     $377 per month $263 in Indiana. In 1993, AFDC costs 
     represented 1.1% of federal spending and 3.4% of state 
     spending.


                             recent reforms

       In recent years a flurry of reforms have been tried, all of 
     them intended to make welfare a bridge to self reliance. 
     These include federal work and training programs such as the 
     Work Incentive (WIN) program, expansion of the EITC, and the 
     comprehensive 1988 Family Support Act. This law required 
     states to set up an education, training and jobs program 
     (called JOBs--Job Opportunities and Basic Skills) for 
     recipients, to provide transitional Medicaid and child care 
     benefits for those who begin working, and to garnish wages of 
     absentee parents for child support payments. The JOBS program 
     is targeted on those most likely to become long-term AFDC 
     recipients.
       Due to shrinking budgets, states have been unable to take 
     full advantage of federal matching funds available for the 
     JOBS program. Still, some initial evaluations are 
     encouraging. In studies of some California and Florida 
     counties, earnings gains among those in the JOBS program 
     exceeded gains by those not in the program by 7% to 53%. 
     Welfare benefits among those enrolled in JOBS also declined, 
     and exits from AFDC increased.


                            current efforts

       But more needs to be done. In considering additional 
     reforms, one theme to take into account is that society's 
     obligation to help those in need is balanced by the 
     recipient's obligation to society. Another is to make work 
     pay, in order to cut welfare costs and promote self-
     sufficiency. A third theme is to strengthen the family. I am 
     critical of welfare regulations which sometimes divide 
     families by limiting benefits when the father lives in the 
     house. I also believe child support enforcement must be 
     further tightened. Other themes are to pay more attention to 
     education and to allow states greater flexibility over 
     certain aspects of welfare policy.
       To achieve such reforms, some advocate strengthening the 
     JOBS program already in place. Others encourage new penalties 
     and rewards, including time limits on AFDC benefits for those 
     physically able to work, denial of additional benefits for 
     additional children, subsidized jobs for those unable to find 
     work, and further expansion of the EITC. Many such reforms 
     are being tried at the state level, including Indiana.
       The Clinton Administration's new welfare reform proposal 
     focuses on making work pay. The core of the proposal is a 
     mandatory education-and-training program for able-bodies 
     beneficiaries born after 1971. Participants would be 
     encouraged to look for jobs and would be given job search 
     assistance, and benefits would be cut off after two years. 
     Those unable to find a job would be offered community service 
     or subsidized private-sector jobs. The President's plan also 
     calls for a campaign against teenage pregnancy, improvements 
     in child support enforcement, loss of benefits for parents 
     who refuse to participate in job-training programs, increased 
     child care for the working poor and other incentives for 
     recipients to work.

                          ____________________