[Congressional Record (Bound Edition), Volume 148 (2002), Part 11]
[Senate]
[Page 15643]
[From the U.S. Government Publishing Office, www.gpo.gov]




       REAUTHORIZATION OF TEMPORARY ASSISTANCE TO NEEDY FAMILIES

  Mr. REED. Madam President, I rise to discuss the necessity to provide 
broader flexibility to States in their effort to reward work, lift 
people out of poverty, and benefit children. As we contemplate the 
reauthorization of the Temporary Assistance to Needy Families, TANF, 
program, we have to ask ourselves: On what basis do we want to judge 
the success of welfare reform?
  Will we focus only on the reduction of case loads and increases in 
work participation, without regard to whether the wage levels raise 
families out of poverty and children are better off? Or, do we want to 
build a system that truly breaks the cycle of poverty and supports the 
long-term economic well-being of welfare recipients and results in a 
better future for children?
  We need to move to the next generation of welfare reform. Our goal 
should be to reduce poverty, reward work, and ensure the well-being of 
children.
  Much of the debate on welfare policy revolves around the issue of 
work, but how do we reward work? During the past two decades states 
have experimented with new approaches to cash welfare assistance for 
low-income families. These initiatives have included mandatory 
employment services, earnings supplements, and time limits on welfare 
receipt.
  How do we know which strategies work best? A federally-funded 
evaluation of welfare-to-work experiments by Manpower Demonstration 
Research Corporation, MDRC, provides a wealth of information on the 
effect of these strategies on employment and income, as well as child 
well-being. This rigorous random-assignment research lays a strong 
foundation for legislative deliberations about the reauthorization of 
TANF.
  Although most of these initiatives increased the employment rate 
among welfare recipients, programs that included only mandatory 
employment services usually left families no better off financially 
than they would have been without the programs.
  The only programs that both increased work and made families 
financially better off were those that provided earnings supplements to 
low-wage workers. These programs also increased job retention and 
produced a range of positive effects for children, including better 
school performance and fewer behavioral and emotional problems for 
elementary school-age children. One income-raising program also 
significantly reduced domestic violence and family breakup.
  Earnings supplements are easily provided to working recipients by 
allowing them to keep more of their benefits. For example, some States 
have not cut or eliminated a family's assistance on a dollar-for-dollar 
basis when the family enters employment.
  However, under current law, States are restricted in how they can use 
their TANF block grant funds to help working families, because any 
month in which Federal funds are used to provide ``assistance'' to a 
working family counts against the Federal time limit on assistance.
  Some States, including my state of Rhode Island, Illinois, Delaware, 
Maryland, and Pennsylvania, operate programs using State money to help 
low-income working families. In Rhode Island, our Family Independence 
Program, FIP, provides a State earnings supplement as a work support 
and does not count it as ``assistance'' if a parent is working at least 
30 hours per week.
  Using this FIP wage supplement, families have funds to buy basic 
necessities.
  Knowing that their income will not plummet after some artificial time 
limit is an incentive to find a job. Providing stable income helps 
parents stay attached to the workforce and rewards work.
  For example, a mother with two children, who works 30 hours per week 
and earns the average starting wage of about $7.80 per hour in Rhode 
Island, receives a supplemental FIP payment of $132 per month. This 
brings her total income to about $1,044 per month. Even with this 
supplement even with her work, that $1,000 per month is still only 83 
percent of the Federal poverty level.
  With a supplement and with work these women are still not making 
income relative to the poverty level.
  If Rhode Island did not use state dollars for the wage supplement, 
when a mother reached her 5-year time limit and the FIP payment 
stopped, she would lose 13 percent of her total income.
  Using State funds offers broader flexibility for States to support 
families that meet work requirements and yet remain eligible for 
earnings supplements because of low wages. However, with State budgets 
being severely constrained, the ability to sustain this work support 
for low-income families is in jeopardy.
  Further, as a State equity issue, all States should have the 
flexibility to use their Federal TANF funds to help low-income working 
families without restrictions--for the simple reason that it works.
  Sadly, the income-enhancing effects of wage supplements and the 
positive effects on children are undermined by current restrictions on 
the use of TANF funds and definitions of what counts as ``assistance.''
  Income gains disappear after families reach their time limits. The 
rigidity of the current system that counts wage subsidies as 
``assistance'' conflicts with the success of supplemental cash 
payments, which rewards work.
  If we want to reward work and help children, we must give States the 
flexibility and the option to provide continuing assistance to working 
families using Federal TANF dollars, ensuring that these supplements 
are not considered ``assistance'' under this program.
  If the Senate were to permit TANF funds to be used in this flexible 
way, families would continue to be subject to all other Federal and 
State TANF requirements, including work and universal engagement 
requirements. But States would have flexibility in deciding whether to 
exercise the option and for how long to exercise this option. This 
provision has no cost; it would simply give States more flexibility in 
using existing Federal TANF funds to support low-income working 
families.
  Earnings supplements have a proven record for boosting work and 
``making work pay.'' These programs reward those who do the right thing 
by getting jobs and it results in better outcomes for children.
  I urge my colleagues to work with me during the upcoming debate on 
the welfare reauthorization bill to ensure the inclusion of this 
broader flexibility for States.
  I again thank the Senator from Utah for his kindness and 
graciousness. I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.

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