[Congressional Record Volume 141, Number 26 (Thursday, February 9, 1995)]
[House]
[Page H1538]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


            WELFARE REFORM, THE MINIMUM WAGE IN BLOCK GRANTS

  The SPEAKER pro tempore (Mr. Cunningham). Under a previous order of 
the House, the gentleman from Rhode Island [Mr. Reed] is recognized for 
5 minutes.
  Mr. REED. Mr. Speaker, when we talk about welfare reform, work is and 
should be the centerpiece. During this welfare reform debate, I have 
heard many people declare that they find it amazing that so many 
individuals do not work. What I find equally amazing, however, is that 
so many individuals work full time, play by the rules, and find 
themselves below the poverty level.
  Currently, there are 2.5 million hourly minimum-wage workers, and 1.5 
million more workers are paid less than the minimum wage and depend 
upon tips. From January 1981 to April 1990, the cost of living 
increased 48 percent while the minimum wage remained frozen at $3.35 an 
hour. It is no wonder, then, that the number of working poor in this 
country has increased 44 percent between 1979 and 1992.
  As a first step to giving value to work and to promote individual 
responsibility, we must increase the minimum wage.
  An increase in the minimum wage is also an important component of 
welfare reform. Real welfare reform has the potential to move 
individuals and families from dependency toward lasting self-
sufficiency. But meaningful welfare reform must be sensitive to both 
the realities of the job market and the difficulties faced by 
individuals when an individual is unable to work because of a 
disability or when dependent children require care.
  If the goal of welfare reform is to move individuals from welfare to 
work, we need to ensure that an individual working full time will not 
fall below the poverty level. If we want to instill responsibility, we 
must ensure that the minimum wage is a livable wage.
  The minimum wage is not just about our workers, it is also about our 
children. Some 58 percent of all poor children under six in 1992 had 
parents who worked full or part-time. The number of children in poverty 
increased from 5 to 6 million from 1987 to 1992. Some 18 percent of all 
poor children under 6 in 1992 lived with unmarried mothers who worked 
full-time.
  An increase in the minimum wage is also necessary because the income 
gap between the wealthiest of our society and working Americans is 
growing. In fact, income inequality in this country is currently at its 
highest level since 1947.
  As we move into the area of welfare reform, it is time to question 
old assumptions. We must ask the question: ``Can we do it better?'' I 
believe we can.
  The majority currently advocates the block grant as a mechanism to 
reform our welfare system. But let us be very clear, block granting 
programs do not make the problems go away. It simply shifts 
responsibility to the States, and if a block grant is a way of simply 
saving money as opposed to providing adequate assistance to eligible 
individuals, then we are not doing the Governors any favors. If we 
adopt a block grant approach, these grants must be flexible to adjust 
to changing local economic conditions.
  Currently, funding for entitlement programs increased to meet demand 
during economic downturns when State budgets are financially strapped. 
Under discretionary block grant programs in a recession, sufficient 
money is unlikely to be available to meet the demand. While the number 
of people eligible to receive benefits will grow as the economy 
weakens, they will not necessarily be entitled to receive any support.
  Because Federal funding for assistance would no longer automatically 
increase in response to greater need, States would have to decide 
whether to cut benefits, tighten eligibility, or dedicate their own 
revenues to these programs. The demand for assistance to help low-
income Americans would be greatest at precisely the time when State 
economies are in recession and tax bases are shrinking.
  A second issue that must be addressed in designing block grants is 
the formula by which funds are allocated. A formula that is based 
merely on historical data would not reflect economic and demographic 
changes. These changes must be reflected.
  Another concern I have with block grants is the phenomenon of 
interstate competition, which may encourage a downward spiral in 
benefit levels and result in a race between States to the lowest 
benefit level. More than two dozen States have been granted waivers 
from the Federal Government to experiment with their welfare programs, 
and already State officials are expressing concern that welfare 
recipients will travel to their States if the benefits are reduced in 
neighboring States, and while we must be careful not to be overly 
prescriptive when it comes to designing block grants, we have a 
responsibility to ensure states are moving welfare recipients from 
welfare to work in providing a minimum level of support for their 
citizens.
  We have begun an important debate. The present welfare system must 
change, but we must continue our commitment to providing all of our 
citizens an opportunity to support themselves.
  I welcome the challenges in the days ahead during this crucial 
debate.

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