[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
WELFARE REFORM
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HUMAN RESOURCES
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
FEBRUARY 14, 2000
Baltimore, Maryland
__________
Serial 106-87
__________
Printed for the use of the Committee on Ways and Means
U.S. GOVERNMENT PRINTING OFFICE
67-486 CC WASHINGTON : 2001
_______________________________________________________________________
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC
20402
COMMITTEE ON WAYS AND MEANS
BILL ARCHER, Texas, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
BILL THOMAS, California FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana JIM McDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania KAREN L. THURMAN, Florida
WES WATKINS, Oklahoma LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
A.L. Singleton, Chief of Staff
Janice Mays, Minority Chief Counsel
______
Subcommittee on Human Resources
NANCY L. JOHNSON, Connecticut, Chairman
PHILIP S. ENGLISH, Pennsylvania BENJAMIN L. CARDIN, Maryland
WES WATKINS, Oklahoma FORTNEY PETE STARK, California
RON LEWIS, Kentucky ROBERT T. MATSUI, California
MARK FOLEY, Florida WILLIAM J. COYNE, Pennsylvania
SCOTT McINNIS, Colorado WILLIAM J. JEFFERSON, Louisiana
JIM McCRERY, Louisiana
DAVE CAMP, Michigan
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
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C O N T E N T S
__________
Page
Advisory of February 7, 2000, announcing the hearing............. 2
WITNESSES
Born, Catherine E., School of Social Work, University of Maryland
at Baltimore................................................... 45
Catholic Charities, and Welfare Advocates Coalition, Lynda Meade. 31
Center for Public Justice, Stanley W. Carlson-Thies.............. 54
Fox, Hon. Lynda G., Maryland Department of Human Resources....... 14
Madden, Hon. Martin G., Senator, Maryland Senate................. 9
Maryland Budget and Tax Policy Institute, Steve Bartolomei-Hill.. 40
Park Heights Corridor Coalition, Inc., Sharon Duncan-Jones....... 37
Puddester, Hon. Frederick W., Maryland Department of Budget and
Management..................................................... 19
Rosenberg, Hon. Samuel I., Delegate, Maryland House of Delegates. 11
WELFARE REFORM
----------
MONDAY, FEBRUARY 14, 2000
House of Representatives,
Committee on Ways and Means,
Subcommittee on Human Resources,
Washington, DC.
The Subcommittee met, pursuant to call, at 11 a.m., Living
Classrooms Foundation, 802 South Caroline Street, Baltimore,
Maryland, Hon. Nancy L. Johnson (Chairman of the Subcommittee)
presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HUMAN RESOURCES
CONTACT: (202) 225-1025
FOR IMMEDIATE RELEASE
February 7, 2000
No. HR-14
Johnson Announces Field Hearing on Welfare Reform
Congresswoman Nancy L. Johnson (R-CT), Chairman, Subcommittee on
Human Resources of the Committee on Ways and Means, today announced
that the Subcommittee will hold a field hearing on welfare reform. The
hearing will take place on Monday, February 14, 2000, at the Living
Classrooms Foundation, 802 South Caroline Street, Baltimore, Maryland,
beginning at 11:00 a.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only.
Witnesses will include State and local public and elected officials,
program operators, advocates, and researchers. However, any individual
or organization not scheduled for an oral appearance may submit a
written statement for consideration by the Committee and for inclusion
in the printed record of the hearing.
BACKGROUND:
This hearing is the continuation of a series of field hearings on
welfare reform being conducted by the Subcommittee. Previous field
hearings have been conducted in Nevada, Arizona, Pennsylvania, and
Florida.
The Subcommittee's goal is to learn how welfare reform is being
implemented in States and local communities across the nation. During
this series of hearings, State and local witnesses are describing their
programs and the impacts their programs are having on welfare
caseloads, employment, the economic well being of families, and the
local economy.
In announcing the hearing, Chairman Johnson stated: ``Thanks to
welfare reform, welfare rolls are down by more than 50 percent,
employment of mothers who used to be on welfare is up, poverty is down,
and more former welfare recipients are working and gaining
independence. This is a great start. To build on this success, Congress
is watching the progress of welfare reform very carefully--both in
Washington and around the country--to ensure that our new approach is
helping families improve their lives.''
FOCUS OF THE HEARING:
The Subcommittee expects to learn details about the welfare reform
programs being conducted both in Baltimore and the State of Maryland.
Witnesses are expected to describe specific impacts on families,
welfare dependency, employment, the welfare caseload, and communities.
The hearing will also feature testimony on the role of churches in
Maryland's welfare reform program.
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and hearing date noted on a label, by the close of business, Monday,
February 28, 2000, to A.L. Singleton, Chief of Staff, Committee on Ways
and Means, U.S. House of Representatives, 1102 Longworth House Office
Building, Washington, D.C. 20515. If those filing written statements,
other than invited witnesses, wish to have their statements distributed
to the press and interested public at the hearing, they may deliver 50
additional copies (2-sided) for this purpose to the Living Classrooms
Foundation, 802 South Caroline Street, Baltimore, Maryland, by close of
business on Thursday, February 10, 2000.
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The above restrictions and limitations apply only to material being
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Note: All Committee advisories and news releases are available on
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call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four
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materials in alternative formats) may be directed to the Committee as
noted above.
Chairman Johnson of Connecticut. Good morning, everyone. I
am Nancy Johnson. I represent the 6th District of the great
State of Connecticut. And I chair the Human Resources
Subcommittee of the Ways and Means Committee. We really are
delighted to be here. We have had a very interesting tour this
morning. And we are delighted to be here.
We do more field hearings than most of the Subcommittees of
the Congress, because we believe that getting out there and
hearing from people who are implementing changes in Federal law
and dealing on the frontlines with the real problems that
people and kids and families face in America is very important,
not only for the process of writing new legislation but for the
constant process of adjusting and improving the law, so that it
provides a better framework within which problems in the real
world can be addressed.
This is our fifth field hearing, but we have had dozens of
hearings on the Welfare Reform bill that was passed a number of
years ago in an effort to track the consequences of that really
dramatic radical change in the law.
It gave the States far more flexibility and control than
they have ever had under any major Federal program, and we
wanted to see whether it was worth it and how you are doing.
The results to this point are spectacular--the number of people
leaving the rolls, and the poverty figures associated with
children and families. It is really unprecedented for those
poverty figures to decline for several years running.
And even during the big job expansion of the Reagan era,
the number of people on welfare grew, and the poverty figures
went up. So what we are seeing is something different, and I
believe it is in part because the system is working
differently, setting up different expectations for both
participants and providers and is more responsive to the
specific needs of regions, cities, counties, and towns in
America.
Probably the most exciting statistics associated with
welfare reform are this decline in poverty and particularly the
extraordinary third-year decline in poverty among black
children. So we are very pleased with what we have seen
happening. We are particularly pleased with the creativity that
has been shown at the State and local levels in developing the
program and responding to very local needs.
We are very aware of some of the problems that are
developing: Why is it people who are entitled to Medicaid
aren't on Medicaid? Why is it people aren't getting hooked into
food stamps the way they should be being hooked into food
stamps? How is it that we are going to not only place people in
jobs but help them advance in their careers and move up that
earnings ladder?
So we are far from complacent about what needs to be done.
But we do look forward to your experience both with the
opportunities that the new plan has given you and what you feel
you have accomplished, as well as what you feel the next set of
challenges are.
I have had the privilege as the Republican chairwoman of
the Human Resources Committee to have Ben Cardin as my Ranking
Member. And while you read in the paper about all the partisan
stuff that goes on in Washington, and this is particularly nice
to say here because from reading the background, I know you
work this way as well, this Committee--this Subcommittee works
in an extremely nonpartisan fashion, and Ben's serious interest
in these services over many years, not just since he has been
on this Committee, has been an enormous asset to our work. And
it is a pleasure to be with him in his district today.
And I am going to turn the hearing over to Ben to chair it.
Mr. Cardin [presiding]. Well, let me first thank Mrs.
Johnson and welcome you to the 3d Congressional District of
Maryland. It is a real honor to have the Ways and Means
Subcommittee on Human Resources meet here in Baltimore.
I want to just spend one moment in congratulating Nancy
Johnson for her leadership on these issues. We have made
tremendous progress in Washington on a bipartisan basis due to
Mrs. Johnson's leadership. She has reached out to Democrats and
Republicans to work together to put forward a constructive
environment in Washington. The foster care bill that we were
able to get enacted was due to her leadership and willingness
to make sure that all sides were heard.
And we are making progress on the fatherhood bill for the
same reasons. It is a pleasure to have her here in Baltimore,
but it is particularly a pleasure to serve as her Ranking
Member on a Committee that is dedicated to try to get things
done in a very positive way.
I would also like to thank the people from Living
Classrooms for opening up their facilities here today. We are
very proud of Living Classrooms in Maryland. It has been an
innovator in providing services for children at risk. And I
think all of us are working to try to make it easier for
children in our society, particularly those that are at risk.
Before the hearing, we had a chance to tour the facilities.
And I want to thank again the people from Living Classrooms.
Mrs. Johnson, I am proud of what we have been able to do in
the State of Maryland. I think the State of Maryland has been a
real innovator on welfare reform issues and on human resource
issues generally. And we are very proud of what we have been
able to accomplish.
This Subcommittee is charged with the responsibility of
oversighting what is happening in welfare reform. And we all
have good reason to be optimistic; the welfare rolls are
dramatically reduced, and the number of children living in
poverty has been dramatically reduced.
These are certainly matters for us to be very encouraged
about. On the other side, we all understand that there are
issues that cry out for our attention. We look at what happens
to people after they leave welfare, and we find in too many
cases the jobs that they have are not producing very high
income, that they still have poverty issues. And we need to
take a look at that.
We look at people who should be eligible for food stamps
and Medicaid and find that they are not enrolled in the
Medicaid Program or the Food Stamp Program. We look at
childcare services and know that many families still cannot
afford safe, affordable childcare. So we have concerns, even
though we know that we have made a lot of progress.
We have a strong economy. Now is the time for us to take a
look at what we can do in order to shore up our programs. The
strong economy has produced budget surpluses in Washington and
in Annapolis. And we are very interested to see what we can do
to make our system stronger.
The whole concept of the Federal welfare reform is to give
flexibility to the States, to give you maximum opportunity to
look at ways that you could address the problems here locally.
I think one of the things we want to concentrate in this
hearing is what has Maryland done; what has the State chosen.
Why did you choose one strategy over another strategy for
welfare reform, and is it working or not?
I just really want to call your attention to a couple of
things that I noticed about the State of Maryland; some
positive, some concern. And please put them on the table.
One of our concerns, of course, is how do we deal with
those leaving welfare to make sure that they are not living in
poverty. A survey by the University of Maryland found after
leaving welfare, workers earned roughly only $11,000 a year.
Now to combat that, to Maryland's credit, you took the laudable
step to make the earned income tax credit partially refundable.
And I commend you on that.
On the other hand, the State continues to implement a very
miserly policy on how much earned income is disregarded for the
purposes of welfare eligibility. Until very recently, only two
States ended assistance payments sooner than Maryland for
welfare recipients going to work. And I am sure that is not a
statistic that we are proud of in the State of Maryland. Again
considering our ability, we should, I think, be at a better
place than that.
On the issue of Medicaid and food stamps, I commend the
State of Maryland for acknowledging this problem and sending
temporary medical cards and simplified Medicaid applications
for the 60,000 individuals who may have been inappropriately
dropped from Medicaid when they left cash assistance. I am
interested in learning how many of these 60,000 individuals
retain Medicaid coverage today.
To provide more resources for low-income families and to
reconnect--noncustodial parents with their families, we are
concerned about the fact that some States have allowed for
pass-throughs of child support to families on public
assistance, other States have not.
I think we all agree that this is a valuable tool for
reconnecting families. Regrettably, Maryland keeps every penny
of child support collected on behalf of families on cash
assistance. I hope there will be some consideration during this
general assembly of legislation that is currently pending that
would change that. I am curious as to the status of that
particular bill.
Of course, one of the biggest issues confronting mothers
attempting to move off of welfare-to-work is to finding quality
daycare. In this context, I worry that Maryland is eligibility
levels for childcare assistance limited to families earning
less than $22,000 a year leaves too many parents without access
to affordable daycare.
Maryland is one of the only a few states that have set
childcare assistance eligibility levels at 40 percent of the
State median income, which is far below the allowable Federal
threshold of 85 percent of the State median income. Governor
Glendening recognized this in his new budget and has provided
the modest increase from 22,000 to 25,000. So I would again
like to know what progress we are making on getting more
families the daycare that they need.
I am encouraged by the good work being done in Maryland and
nationwide to overhaul the welfare system, but there is still
much more that both the State and Federal Government must do.
We during this last legislative session maintained our
commitment of providing flexible funds to the states. There was
an attempt made to try to reduce TANF funds. And on a
bipartisan basis, we prevented that from happening living up to
our commitments to the States. Well, we think this is a
partnership and the States have a commitment to make sure that
these funds aren't being used to supplant other funds that the
States have made available to deal with children and families
on welfare. And I would be interested on your views in that
regard.
And then, finally, if I might suggest, that I do think the
Federal Government must be an active player; we just can't be a
bystander. Our opportunities are also better right now because
of our growing economy, and we need to be proactive. I would
hope Congress would pass the minimum wage bill that I think
would help in this regard and that we would increase Federal
funding for childcare. I authored a bill to do just that.
I have also introduced legislation to require the Federal
Government to share with the States the costs of passing
through more child support to low-income families. So I think
we need to work together in a partnership in order to continue
the progress that we have made.
Let me conclude from where I started. We are very pleased
with the way that the welfare rolls are being reduced and child
poverty is being reduced and that we maintained our commitment
of flexible funds to the States and the creative innovations
the States have used. But we need to now reach further.
The families that are remaining on cash assistance are more
difficult than they were the families that we had a year ago on
cash assistance, and we need to figure out strategies where the
Federal Government and the State government working together
can deal with those issues.
[The opening statement of Hon. Benjamin L. Cardin follows:]
Opening Statement of Hon. Benjamin L. Cardin, a Representative from the
State of Maryland
Madame Chairwoman I want to thank you for joining me in
Baltimore today to oversee the progress of welfare reform in
Maryland. There is much here to warrant optimism, including a
rising number of individuals leaving welfare for work and a
declining number of Maryland's children living in poverty.
However, there are still a number a major obstacles to
overcome, such as very low earnings for welfare leavers,
problems with access to Medicaid and food stamps for low-income
families, and financial barriers to quality day care. In short,
welfare reform is working in Maryland, but the job is far from
done.
There can be little doubt that our strong economy combined
with significant budget surpluses in both Washington and
Annapolis present a once-in-a-lifetime opportunity to tackle
many of the core problems leading to poverty. We should all
hear the echo of the famous phase--``if not now, when?'' Now is
certainly the time to make sure that recent employment gains
turn into permanent poverty reductions.
Today, I would like to focus on the choices Maryland has
made under the Federal welfare reform legislation, which gave
States broad discretion in designing their own programs. In
other words, why did Maryland select some welfare reform
strategies and not others, and how do these policies intersect
with the overall State budget. Let me mention a few specific
issues.
One of the central problems that continues to vex welfare
reform efforts here in Maryland and around the country is
helping people leave poverty for a better life when they leave
welfare for work. For example, a University of Maryland survey
found that, a year after leaving welfare, workers were earning
roughly only $11,000 a year.
To combat this problem, Maryland took the laudable step of
making its earned Income Tax Credit (EITC) partially refundable
to increase the take-home pay of low-wage workers. However, the
State continues to implement what can only be called a miserly
policy for how much earned income is disregarded for the
purposes of welfare eligibility. Until very recently, only two
States ended assistance payments sooner than Maryland for
welfare recipients going to work. Some improvements to
Maryland's earnings disregard policy were implemented last
year, but more needs to done to make work pay, not painful.
On a related issue, too many individuals who are trading a
welfare check for a pay check are losing other benefits to
which they are entitled, such as Medicaid and food stamps. I
was pleased that our State acknowledged this problem by sending
temporary medical cards and simplified Medicaid applications to
60,000 individuals who may have inappropriately lost health
coverage when they left cash assistance. I am interested to
learn how many of these 60,000 individuals retain Medicaid
coverage today.
Of course, one of the biggest issues confronting both
mothers attempting to move from welfare to work, and those
trying to stay off welfare, is finding quality day care for
their children. In this context, I worry that Maryland's
eligibility levels for child care assistance, limited to
families earning less than $22,000 a year, leaves too many
parents without access to affordable day care coverage.
Maryland is one of only a few States that sets its child
care assistance eligibility level at 40% of the State Median
Income (SMI), which is far below the allowable Federal
threshold of 85% of SMI. Governor Glendening's new budget
begins to recognize the inadequacy of Maryland's child care
budget by proposing to modestly increase the income eligibility
thresholds from $22,000 a year for a family of three to $25,000
for such a family.
I am encouraged by the good work being done in Maryland and
nationwide to overhaul our welfare system. But there is still
much that Federal and State officials can do to improve
outcomes for low-income families, especially considering the
resources generated by a strong economy. Yet despite the needs
of poor families for improved child care, health care and work
rewards, some states are apparently using Federal TANF dollars
to replace, rather than augment, State money dedicated to
helping these families.
This type of supplantation does not adhere to the spirit of
the welfare reform agreement between the State and the Federal
government. The Federal government has upheld its end of the
agreement by maintaining the TANF grant's flexible funding at
its statutory level. But the States must also continue to do
their part--which means focusing Federal TANF funds on helping
needy families, not on freeing up State dollars now dedicated
to poverty programs.
Finally, by focusing most of my comments on Maryland's
welfare policies, I do not mean to suggest the Federal
government should merely stand on the sidelines. While Congress
should continue to give States broad flexibility in determining
there welfare policies, there are other areas where the Federal
government should be more proactive.
For example, I hope and expect that Congress will increase
the minimum wage to raise the earnings of low-income workers,
especially those leaving welfare. I also believe we need to
increase Federal funding for child care to help families
balance the burdens of work and raising a family--and I have
authored a bill to do just that. I have also introduced
legislation to require the Federal government to share with the
States the cost of passing through more child support to low-
income families.
Madame Chairwoman, let me again thank you for bringing this
Subcommittee to Maryland to oversee welfare reform in action. I
know you share my desire to hear about both the promise and the
problems of welfare reform here and around the Nation.
Madam Chair, I appreciate the honor that you allow me to
introduce the first panel that we have. We have, I think, the
two key legislators that have been responsible for the progress
that we have made in the State of Maryland. Senator Madden
comes from Howard County, a county that is one of our real
growth counties in the State of Maryland, one in which the
State senator can pick whatever priorities he wants to
concentrate on.
We are very, very proud that he has been a champion on
welfare reform in our State. And I applaud him for those
efforts. He has been a true champion on trying to make sure we
do the right thing for families in our State.
And Samuel Rosenberg, a member of the House of Delegates,
which I consider to be the upper House, considering that I
served as Speaker of that body, only because of the protocol,
we will allow Senator Madden to go first. But Sandy Rosenberg,
he and I came from the same legislative district. He chairs one
of the Subcommittees on the Appropriations Committee.
In Congressional terms, we would call you a cardinal. And I
understand that may not go over well in your district, but I
will see what happens. But he has been one of the real leaders
in our State on progressive issues dealing with poverty and
dealing with children.
And then we have Lynda Fox, who is the secretary of the
Maryland Department of Human Resources, the person charged on
the executive side with implementing our human resource
programs, including welfare reform and has been one of the real
policy developers on the welfare issues in our State.
And last, Fred Puddester, who is the secretary of the
Maryland Department of Budget and Management. Fred has
experiences on both the legislative and executive side. He is a
person who has incredible credentials and credibility among
legislators and in our entire State for running budget
discipline, as well as using the budget in a creative way to
deal with the problems with the people of our State.
So welcome. Your entire statements will be put in our
record. And we would appreciate it if you would try to limit
your formal presentations to no more than 5 minutes.
Senator Madden.
STATEMENT OF HON. MARTIN G. MADDEN, SENATOR, MARYLAND SENATE,
AND CO-CHAIRMAN, MARYLAND GENERAL ASSEMBLY, JOINT COMMITTEE ON
WELFARE REFORM
Mr. Madden. We know the urgency of that message sitting in
our own Committee for the last month and having another 2
months to go.
Madam Chairman, thank you very, very much for coming out
here to the land of pleasant living. We appreciate your
valuable time in doing so. We want to thank you for the
opportunity to show you what the States can do when they get a
chance to be closer to the people they are trying to serve. And
we thank you for devolving this program down to us. We also
particularly thank you keeping your word on maintaining the 5-
year level block grant. I think it would have been a terrible
precedent on this first devolving of the Federal Government to
the States to have to come back and break that word. It would
have set a bad precedent for the next time we wanted to do
another program.
Maryland was determined not to duplicate the Federal one-
size-fits-all system. And so we granted our 24 local social
services directors in the 23 counties and the City of Baltimore
the flexibility, the funding, and the autonomy to make their
own decisions on what is best to bring welfare--with what is
best to bring people to self-sufficiency that we are trying to
serve.
We backed this promise up by guaranteeing the local social
service directors that they would receive 45 percent of the
savings generated from any caseload reduction in their
jurisdiction. And this has generated numerous experiments and
different programs; things that work in one county are quickly
duplicated in others where they are applicable. Things that
don't work, we move on.
I, for one, adhere to the old saying there is no failure in
trying and failing, only in failing to try. And we have never
held anybody responsible for trying something that didn't work.
One of the things that has happened is that Allegheny County, a
county with one of our highest unemployment rates in the State,
has the biggest caseload reduction in Maryland. They are down
90 percent. It is not because the job market is better up
there; it is not. They just tried new and more innovative
approaches.
We have given our local social service directors the
individual authority to give education exemptions, rather than
a blanket exemption for everyone. We think we are on the right
track here in Maryland. We want more ability to do so.
Two things I would ask you to do as we move forward.
Maryland came out of the welfare reform effort very early. We
had a Federal waiver prior to August the 22d of 1996 when the
landmark legislation was passed and signed. So we kicked in
right away in October 1996. I think your Department of HEW
approved our plan on January 1997. So our clock is now 3 years
and 1 month ticking.
And as Congressman Cardin knows, we only go into session
January through April. If you all don't tell us this session
what you are going to do at the end of the 5-year time limit,
we have no way to react to the changes because that means you
won't do it until after our 2001 session. We will be out of
session until 2002 when our time limit has already expired.
From our perspective here in Maryland and the other early
States, it is imperative that you tell us this year what is
going to happen at the end of the 5-year block grant;
otherwise, we don't have the time we need to react in a proper
manner.
The second thing I would urge you to do is please devolve
more programs back to us. And, you know, right now, a year from
now we are going to have a new President for sure and perhaps
some new people sitting in certain seats. I think we should
keep this bipartisan consensus that was started 3 years ago
continuing, and if you are not ready to devolve back the
Medicaid Program or the Food Stamp Program nationally, why not
start some pilots? Start with six States, three with Democratic
Governors, three with Republican Governors, one rural State,
one urban State, one on the West Coast and one on the East
Coast, whatever you think is fair and gives you a broad
perspective. Give six or eight States a chance to show you what
we can do on Medicaid and food stamp eligibility.
I will guarantee you this, we will do it fairly and we will
do it compassionately, and we will do it more efficiently. Now,
I can't guarantee you a result, but I can almost predict that
we will find results that far exceed your expectations, just
what we found in welfare. Nobody would have predicted the
success the welfare program had.
So please, as you go about recertifying the welfare, why
not try a pilot program in certain States? I only ask one
request, make sure one of them is Maryland. And I think we will
find this body of knowledge--it is transferrable. Maybe it is
too big a step to do it on a national basis, I understand that.
Try some pilots. Connecticut would also be a good one to start
out, Madam Chairperson. Those are my two requests here.
Congressman Cardin, to answer one of your questions, the
issue you raised regarding Maryland cutting off benefits very
early when somebody leaves welfare, that is a deliberate policy
that I endorsed here in Maryland. The reason why is that the
way the Federal law is set up, if you give even $10 of cash
assistance to anyone, it counts as one of those 60 precious
months of lifetime eligibility somebody on welfare has.
I would much rather direct aid through tax credits or
additional noncash assistance, because whether we give a full
cash benefit to somebody for a month or whether we give them a
$10 supplement while they are working, each of those cash
payments eats up one of those 60 months of lifetime
eligibility. I don't think it is a wise use of resources to do
so.
Thank you for your time.
Mr. Cardin. Thank you very much, Senator Madden.
Mr. Cardin. Dr. Rosenberg.
STATEMENT OF HON. SAMUEL I. ROSENBERG, DELEGATE, MARYLAND HOUSE
OF DELEGATES, AND CO-CHAIRMAN, MARYLAND GENERAL ASSEMBLY, JOINT
COMMITTEE ON WELFARE REFORM
Mr. Rosenberg. Thank you. Welcome, Chairman Johnson,
Ranking Member Cardin, Congressman English to Baltimore City,
to the 3d Congressional district, not the 42d legislative
district. It was my honor to serve my first term with
Congressman Cardin's last term in the House Delegates of
Maryland.
I think one of the important things about how we have
approached welfare reform is in one of the things that
Congressman Cardin did not say about Senator Madden, that is,
that he is a Republican; I am a Democrat. We have had a
bipartisan approach to welfare from the outset in Maryland.
We have also had I think an approach that is
nonideological, in the sense the very first welfare innovation
act that we did--we are now on our 5th or 6th annual acts--but
the very first year the advocates came to us and said you
should study what the impact is of what you are doing. And so
we wrote into the law that there will would be funds for an
annual study that Congressman Cardin cited as to what is the
impact of what we have done.
We have paid attention to that study in molding what we do.
We have achieved a great deal of success, but we have only
begun the process of welfare reform. There are people who
remain on the rolls who will be more difficult to find work.
But, more importantly, or equally as important, I think our
priority now has to be helping people who have left the rolls
begin to move up the economic ladder, so that their second or
third job is one that pays a higher wage, and that involves a
variety of factors on our part: Job skills, childcare,
continued support, and things like Medicaid and food stamps.
And I think that is our priority now as we move into the
second phase of welfare. And we need the ability--we need to
keep the ability to do that, to be innovative, to be flexible,
and to retain the funds to do that. In Maryland, we have
provided that the savings go into a dedicated-purpose account
so that they can only be used for welfare-related purposes.
This is--you know, so that it doesn't go into, you know, just
the general funds so that Mr. Puddester can use it for a
variety of purposes. It has to be used for welfare-related
purposes. We have reinvested through the locals giving them
flexibility. And I think that is something--that is the kind of
flexibility that we should retain.
When you decide--when you reauthorize the program when, you
know, whether it is in this calendar year or the next calendar
year, preferably sooner, so we know what we are doing, it is
essential that we retain that flexibility, so that individually
each State can address problems as it sees fit.
And it is as Senator Madden said, we have said to the
locals, it is not just do as we say; we have given them the
flexibility to address problems. Congressman Cardin, you spoke
specifically of the pass-through of child support. There is
legislation before us this year--we haven't had a bill hearing
on it yet. But I think what has motivated us throughout this
process is a sense of giving people the opportunity to move off
welfare, providing whether it is programs or incentives but
also saying that there is a consequence for your children, for
your family if you fail to take advantage of that opportunity.
Most notably that has been the case with what we have been
trying to do with substance abuse. Senator Madden took the
initiative several years ago to say if parents are abusing,
they are not going to be good parents, and their children are
going to suffer. And we have--we are still working on that to
make it work; but we have said that, you know, if we make drug
treatment available to you and you fail to, you know, work--
remain in the program, there is a consequence for your children
if we do nothing, so we are going to do something and deal with
custody issues there.
We are still trying to make sure that that treatment is
made available. But I think that--I think that best epitomizes
what we have tried to do here in welfare in Maryland, address
the problem, not from an ideological approach but by saying
there is a problem, here is how we think, here is the tools,
the opportunities to address that problem and moving forward
and constantly evolving so that we are, in fact, addressing
that problem.
So our bottom line is continue to give us that flexibility,
continue to give us the resources so that we can address those
problems. And we look forward to working with you as we have
worked as a legislature, Democrat, Republican, legislative, as
well as advocates and elected officials to giving people the
opportunity to move not just out of welfare but up the economic
ladder.
Mr. Cardin. Thank you.
[The prepared statement follows:]
Statement of Hon. Martin G. Madden, Senator, Maryland State Senate, and
Hon. Samuel I. Rosenberg, Delegate, Maryland House of Delegates; Co-
Chairmen, Maryland's General Assembly's Joint Committee on Welfare
Reform
Dear Chairman Johnson:
Thank you for the opportunity to appear before the U.S.
House of Representatives Ways and Means Committee's
Subcommittee on Human Resources hearing in Baltimore on welfare
reform. Congress and the President made the right decision in
devolving welfare to the states.
Maryland was determined not to duplicate the failed federal
``one size fits all'' structure. Accordingly, we gave each of
our 24 local social service directors (23 counties and
Baltimore City) the flexibility, funding, and autonomy, to make
their own decisions on how best to address the barriers to
self-sufficiency faced by their residents. We backed this
approach by providing that 45 percent of the savings realized
because of caseload reductions is returned to the 24 local
departments. This lead to the creation of many new approaches,
such as a source of funds for innovative demonstration projects
between local social service departments and nonprofit
organizations, as well as other local entities. Welfare reform
has succeeded beyond our most optimistic expectations. We
certainly hope that this flexibility continues as the existing
TANF block grant ends and discussions begin regarding its
extension.
As co-chairs of the Maryland's General Assembly's Joint
Committee on Welfare Reform, we are proud of the State's
efforts to implement welfare reform. Our efforts enjoy
bipartisan support and could not have been accomplished without
a high level of cooperation between the legislature and the
Executive Branch. From January 1995 to December 1999,
Maryland's welfare caseload has declined by more than 65
percent. An on-going legislatively mandated study indicates
that most of those people who left welfare found jobs, have
stayed employed, increased their earnings, and have not
returned to welfare.
We are also proud of the fact that Maryland is an
acknowledged leader in developing innovative approaches to
helping welfare recipients achieve independence. For example:
Maryland was the first State to implement a drug
screening program for welfare recipients because we recognized
that a significant barrier to independence is substance abuse;
Maryland allows any program savings to stay with
our State welfare agency and its local departments of social
services;
Maryland created a special account for State-only
funds that can be used only if caseloads start increasing; and
Maryland mandated that an ongoing study be
conducted that follows former welfare recipients. This study
has provided invaluable information regarding what happens to
those people that leave welfare and is considered a model for
other states.
In spite of our success, we recognize that there is still
much work to be done. Starting in January 2002, the first group
of welfare recipients in Maryland will be subject to the 60
month time limits. Unless exempted, these welfare recipients
will no longer be eligible to receive any TANF benefits. While
the caseload declines remain encouraging, the fact is that
Baltimore City has well over one half (48,000 cases) of the
State's remaining caseload, and most of these individuals fall
into the ``hardest to place'' category. While we continue to
endorse the autonomy and flexibility granted to the local
departments, we aslo recognize that a regional approach may be
necessary to assist Baltimore City in addressing its caseload.
For example, transportation barriers prevent inner-city
residents from obtaining access to well paying suburban jobs.
We will have to devote more resources to removing these
barriers.
As we begin to focus on the ``hardest to place cases,'' we
were pleased to see that the new TANF regulations afford the
states much greater flexibility in the use of their funds to
move welfare recipients to independence. We are also pleased
that Congress has declined to take away the TANF surplus that
the states have accumulated in the event caseloads start
increasing. We encourage you to continue the TANF block grant
and your support of state and local efforts.
We have helped people move from welfare to work. Now we
must give people the opportunity to move from unskilled,
subsistence jobs to higher skilled, better paying jobs. We also
would like you to consider devolving other programs to the
states, such as Medicaid and Food Stamps. If you are not ready
to devolve all of the major programs for the poor to the
states, we would encourage you to establish a three year pilot
program in 6 states and would like for Maryland to be included
in the pilot. We promise to administer these new pilot programs
fairly, compassionately, and efficiently. . . .we also expect
to achieve positive results that exceed all our most optimistic
expectations.
Mr. Cardin. Secretary Fox.
STATEMENT OF HON. LYNDA G. FOX, SECRETARY, MARYLAND DEPARTMENT
OF HUMAN RESOURCES
Ms. Fox. Good morning. I would like to thank Chairman
Johnson and Congressman Cardin and Congressman English for
coming to Baltimore today to allow us this time to talk about
both the successes and challenges of welfare reform here in
Maryland.
As you can see from the panel, it has been a real team
effort. The Governor and the General Assembly have collaborated
together to have a unified, consistent, coherent approach to
welfare reform; and we think it has worked very well. We have
assisted many, many families; and at the same time, we have
protected children and protected those with disabilities and
other vulnerabilities.
Certainly one measure of our success has been our caseload
decline. Since January 1995, our caseload has decreased by over
66 percent. It has ranged from place to place around the State,
going as high as about 90 percent in some counties, but
remaining at about a 55 percent decrease in Baltimore City. As
in other parts of the country, the welfare caseload is becoming
more of an urban phenomenon.
At this point, about six in 10 of those who are receiving
Temporary Cash Assistance do reside here in Baltimore City. We
think that the caseload decline is one measure of our success,
but clearly not the only measure of our success. Dr. Catherine
Born will talk a little bit about the work she has done.
Basically we found people have become employed, stayed
employed, had wage gains and maintained their families.
We believe that we are using the flexibility that you have
given us through the devolution of welfare reform to the
advantage of Maryland families. At this point we appreciate
that we can serve not only those who are receiving cash
assistance but also those that have left our rolls and those
who are only one paycheck away from needing our assistance.
We also have used this opportunity to do a lot more in
terms of programming for fathers so that we are serving both
parents whether or not they reside in the same household. We
have been able to expand our childcare resources. We have taken
advantage of the transferability into the childcare development
fund.
We have done that for 2 years, and we are asking for
permission in this year's state budget to do it a third year.
That has enabled us, as Congressman Cardin pointed out, to
increase our eligibility threshold. It has also enabled us to
provide greater access to the program for children of teen
parents and also children being cared for by kinship care
providers.
We also are embarking in July on an After School
Opportunity Fund of $10 million that will enable private and
nonprofits and traditional childcare providers to do after
school activities. We are also expanding our Family Support
network. They serve young vulnerable families with children
birth to 3. We are expanding our Healthy Families Maryland
program, which is a home visiting program aimed at reducing
subsequent nonmarital births as well as preventing child abuse
and neglect. And we are enhancing our activities to serve those
that have left welfare.
As we reach this point, we are really seeing a new set of
emerging issues. We feel like we have entered into stage two of
welfare reform. So job retention and job skills enhancement are
now becoming increasingly important.
We also appreciate the flexibility we have been given for
the first time to really engage in prevention activities so
that we ensure that the next generation need not be dependent
on welfare. In the beginning, our goals were caseload reduction
and customer satisfaction. Now, it is much more job retention,
earnings gain, diversion and prevention.
It has become increasingly clear that we are not going to
succeed in the long run without coupling those leaving cash
assistance with the other Federal and State supports that are
available. We have been working very hard on ensuring that
everyone who is entitled gets medical assistance, food stamps,
childcare, both the State and the Federal earned income tax
credits, and avail themselves of child support enforcement
services as well.
I think there are many ways that Congress can continue to
help us as we continue this welfare reform journey. We
certainly appreciate that you left our funding intact. We
appreciate your respect for our bargain. I do think that the
high balances may have given you a false impression. I think
States like Maryland were prudent in their use of their funds.
We wanted to be certain that the caseloads were going to fall
and were going to remain low.
We also were in a very uncertain regulatory environment.
The initial HHS regulations really had a chilling effect, I
believe, on the creativity in States in using the resources. So
we are hoping to continue, but we have not yet any guarantee
that the economy will remain as vigorous as it has been. The
Regional Economic Studies Institute at Towson University tells
us that about 9 percent of our 61 percent decrease can be
attributed to the health of the economy. The rest is really
attributable to policy change, which I think is interesting.
But keeping that in mind, we do urge that you continue the
sustained level of funding in the reauthorization.
Mr. Cardin. Thank you very much.
[The prepared statement follows:]
Statement of Hon. Lynda G. Fox, Secretary, Maryland Department of Human
Resources
Introduction
Good morning, my name is Lynda Fox. I am the Secretary of
the Maryland Department of Human Resources. It is a privilege
to be here today to discuss my views on the successes and
challenges of welfare reform in Maryland. I would like to thank
Chairman Johnson and the Committee for this opportunity. I
would also like to thank our Congressman, Ben Cardin, for all
of his hard work in getting as broad a possible range of views
into the development of the original welfare reform legislation
and in taking a leadership role in the development, where
appropriate, of mid-course corrections to the Congressional
vision of welfare reform. In Maryland, we think the Temporary
Assistance to Needy Families program has had a dramatic and
positive impact not only on welfare but the entire human
services delivery system. In Maryland and across the nation, we
are making great strides in assisting families to become
independent of welfare and to enter the workforce. At the same
time, we are safeguarding children, people with disabilities
and other vulnerable populations by providing needed services.
It is also a privilege to appear before you today as part
of a panel that vividly demonstrates that, in Maryland, welfare
reform is a team effort. Senator Madden and Delegate Rosenberg
have provided a clear policy direction for Maryland's welfare
reform efforts. Dr. Born has provided them and us with the
facts and research necessary to make reasoned policy choices.
Secretary Puddester has provided the budgetary guidance that is
necessary to make our efforts successful. Because of the
cooperation and foresight of Governor Parris Glendening and the
Maryland General Assembly, Maryland is a leader in welfare
reform -welfare reform that is firmly based on our research and
the research of others and that takes maximum advantage of the
fiscal flexibility you have given us to determine how to best
serve low income families in Maryland. In the brief time that
we have together, I would like to share with you some of our
successes, point out some of the challenges that still lie
ahead and enlist your support in facing those challenges.
Our Successes
One measure, but only one, of our success is that of a
caseload decline. We have built on the strengths of our
customers and helped move them to independence. Since January
1995, we have helped 150,547 Marylanders become independent of
welfare. As of the January 2000, our cash assistance caseload
has gone from 227,887 customers to 77,340 customers, a decline
of 66.1%. Based on work done by the Regional Economic Studies
Institute at Towson University, this decline in Maryland can be
attributed largely to the implementation of our Family
Investment Program. Towson Universty has been forecasting the
state's welfare caseloads since 1992. They have projected the
caseload in the current economic environment both with and
without welfare reform. Their forecast estimates that without
welfare reform, but with a booming economy, the caseload would
have declined about 9%, rather than the 66.1% we have achieved.
They have concluded that the dramatic difference in the rate of
decline is at least partially due to the strong economy; but
even more importantly, is a result of the sound policy
decisions that have been made in Maryland.
Maryland's caseload decline also mirrors a national trend
in that the population remaining on cash assistance is
disproportionately located in urban areas. While the state
caseload has declined 66.1%, the caseload in Baltimore City has
declined 55.3%. As a result of this difference in decline
rates, Baltimore City now has 61.1% of the state's caseload.
The more important question is not just how many people
have left welfare caseloads but how well do they fare after
they leave. I will leave it to Dr. Born to describe the details
of her research work on this basic and important question. I
think that we in Maryland have answered the basic questions
that were asked at the beginning of the current welfare reform
effort. We have found that people who leave welfare generally
find work, preserve their families and do not return to the
rolls.
Another of our successes is that we have been able to
understand more clearly and take advantage more fully of the
true flexibility the Congress has given us and which we now
see, years later, reflected in the final federal regulations. I
will leave it Secretary Puddester to discuss more fully how we
are taking advantage of this flexibility. Be assured that in
Maryland we are using this flexibility to fund a host of
activities that we think faithfully implement the purposes of
the federal welfare reform law and serve low-income Maryland
families who receive cash assistance, have received cash
assistance or are but one paycheck away from receiving cash
assistance. We have used in this flexibility on activities such
as the following:
Child Care Expansion.
We have transferred $92 million from the TANF block grant
to the child care block grant in order to meet growing child
care needs and to fund program expansions that will serve
additional children.
The Maryland After School Opportunity Fund program.
We will use $10 million in TANF funds to launch this
program in July 2000. This program will provide funds to a
myriad of after-school programs designed to enhance the
motivation, performance and self-esteem of youth and thus meet
the goals of the federal welfare reform legislation.
Expansion of Our Family Support Center Network.
These centers were developed to establish preventive
supports for families during the early formative years and to
encourage the formation and maintenance of two-parent families.
These centers are community-based programs that provide
services to assist mothers and or fathers with children age
birth through three, particularly in high-risk communities, to
raise healthy families and build productive futures.
Expansion of the Healthy Families Program.
This program provides home visitation and on-site services
to families such as parenting education, family planning and
employment services. This program's goals include the
prevention of subsequent out-of-wedlock pregnancies as well as
child abuse and neglect.
Expansion of Our Job Skills Enhancement Pilot Project.
This program provides of participants with training to
enhance existing skills, gain additional or alternative skills
or to learn interpersonal communication and other related
skills to retain their jobs and increase their potential for
advancement beyond entry-level positions.
The Challenges That Remain
Caseloads have declined. This is not the end of the story
of welfare reform but rather the beginning of a new chapter.
Those that remain tend to live in urban areas where there is a
problem with the supply of jobs and also tend to have a greater
number of barriers to independence. We also have to ensure that
those who have left do not come back, unless absolutely
necessary. Finally, we are faced with the issue of true welfare
prevention not just diversion. In our diversion activities, we
want to insure that people do not stay in our welfare offices
very long. In our prevention activities, we want to ensure that
they do not have to come to us for cash assistance in the first
place. We faced the initial issues of welfare reform and are
now facing new and more difficult issues. Among these are:
Job Retention and Job Skills Enhancement.
Is important that those who leave welfare for a job keep
that job and move on to a better job. With assistance from
planning grants and input from advocates and members of the
General Assembly we are devising a number of programs to ensure
that those who leave welfare for a job keep that job and use it
as a stepping stone for career.
Prevention Activities.
The final federal regulations have more clearly articulated
the flexibility in the federal welfare reform law. Maryland has
enthusiastically grasped that flexibility to design and enhance
programs that are preventive in nature. This continues a long
tradition in Maryland of focusing on different kinds of
preventive activities. For example, one of Maryland's very
first of welfare reform activities was called the Primary
Prevention Initiative that focused on child immunizations and
school attendance as being preventive of welfare dependency. We
are building on this tradition of prevention by funding after-
school programs, family preservation programs, family support
centers, dropout prevention programs, out of wedlock pregnancy
prevention programs, young fathers programs and other
community-based initiatives.
Realigning the Major Welfare Reform Goals of the Department.
At the beginning of our welfare reform effort, we
developed, in concert with the Maryland General Assembly, a
Reinvestment Strategy. Our major goals were caseload reduction
and customer satisfaction with an overall objective of creating
caseloads savings and reinvesting those savings back into
programs that would help those with greater barriers to
independence. The General Assembly gave the Department
unprecedented fiscal flexibility to carry forward caseload
savings into the future. Now, we are faced more squarely with
the issues of job retention, earnings gain, diversion and
prevention. Consequently, we are more clearly articulating a
goal of the support of low-wage working families. The policy
shift to welfare as a temporary support has accentuated the
fact that other governmental means tested programs are supports
to employment and eventual family independence. Taking the lead
from David Ellwood, we view independence as a multi-legged
stool with governmental means tested programs and private
efforts working together to move the family eventually to
independence. The programs we are providing and/or marketing to
our customers include:
Child Support.T1 We have included a Child Support
First component to our program and are building a Child Support
Last component to ensure that those exiting from the welfare
rolls have the child support money to which they and their
children are entitled.
Child Care.
As our welfare caseload projections go down, our child care
projections increase as more people move to work and need this
support.
Medical Assistance. We have developed manual
review mechanisms and are shortly going to turn on new computer
programs to fully implement the provisions of Section 1931 of
the federal welfare reform law regarding Medical Assistance. We
are committed to insuring that all medical assistance
applicants who are eligible are correctly determined to be
eligible, regardless of their cash assistance status.
Food Stamps. This program has taken on increased
importance as part of the social safety net as cash assistance
caseloads have declined. As I will discuss later, this program
unfortunately does not have the flexibility that exists in TANF
Earned Income Tax Credits. We continue to
aggressively market both the federal EITC and Maryland's own
refundable EITC.
How You Can Help Us Meet the Challenges
To meet the challenges I have described, the states cannot
go it alone. Most certainly, they (along with Maryland) will
not be able meet those challenges with reduced federal support.
Consequently, I offer the following suggestions as being some
of the more fruitful ways in which the federal state
partnership in welfare reform can continue to grow along an
exciting, devolved and research driven path.
Maintain Current Levels of Support.
We understand the Committee's concern that some states have
accumulated significant TANF reserves. I think this
accumulation reflected an initial prudence on the part of the
states and an uncertain federal regulatory climate. Now that we
more fully understand the flexibility inherent in the federal
welfare reform law, I believe that Maryland and other states
will reduce those balances by spending on appropriate
activities for low-income families.
Look Toward a Reauthorization of the TANF Program at Current
Block Grant Levels.
We have been led to understand that is it the opinion of
many that upon reauthorization the TANF block grant to the
states may be smaller. We would urge you to reject that kind of
thinking. The federal welfare reform law was the result of the
historic agreement between the states and the federal
government regarding the risks of significant change in the
area welfare reform. The states were willing to accept those
risks and the burden of any unforeseen additional costs. The
Congress needs to hold up its part of the bargain and continue
funding at reauthorization at current levels. I would remind
you and everyone listening that we have yet to see the repeal
of the business cycle. We have yet to see how the progress we
have made and the successes we have achieved will fare in a
time of serious economic downturn.
Continue the Principle of Maximum State Flexibility in the
Design of Their Welfare Programs.
Now that states have had some experience with welfare
reform, you will see even greater experimentation and a greater
drift away from welfare the way it was. There are some who are
troubled by this, despite the results of studies such as we
have done in Maryland concerning welfare leavers and other
aspects of our program. I urge you to resist the
recommendations those who would attempt to reestablish aspects
of welfare as we knew it by placing controls on state
flexibility and creativity and otherwise attempting to unravel
the historic welfare reform agreement.
Continue to Work toward Granting the States the Flexibility
They Have in the TANF Program to Other Federally Funded Means
Tested Programs, Particularly Food Stamps.
I offer the following suggestions:
Substantially reform the Food Stamp Program to
simplify it and conform it to the goals of welfare reform while
preserving its role as a significant part of the social safety
net. There needs to be a radical simplification of this
program's complex income, asset and deduction rules, which
continue to mystify staff and customers. In themselves, they
constitute a considerable barrier to participation in the
program.
If the above cannot be done or seems too big a
step, the Congress should grant increased waiver authority to
United States Department of Agriculture to allow state
experiments in the Food Stamp Program. This would be similar to
the waiver demonstration projects that gave states the
experience and the information to craft successful welfare
reform programs. States are the great laboratories of
democracy. While we are well aware of the fact that this
Committee does not have jurisdiction over the Food Stamp
Program, we urge you to constantly work with your colleagues
that have direct responsibility for that program to grant the
state's a measure of the flexibility that was contained in the
federal welfare reform law. As you know, the states have
responded appropriately to that flexibility and would do the
same with regard to the Food Stamp Program.
Full federal participation in the pass-through and disregard in
the calculation of the grant of any child support collected on
behalf of families who receive TANF cash assistance.
There is growing support in Maryland and across the nation
for passing through and disregarding at least a portion of the
child support collected on behalf of children receiving cash
assistance. There are many good reasons to do this. Among these
are the extra income it gives the family while they receive
cash assistance, but more importantly the tie that this creates
between the non-custodial parent and the children that will
continue long after the family has left welfare. The problem
with this strategy is that current law governing the
distribution of child support collections requires that we give
to the federal government half of what we collect for these
families. Thus, we can pass through and disregard only the
state share of the collection unless we choose the extra
expense of paying the family the federal share.
We are supportive of any legislation that would have the
federal government participate in the cost of passing through
and disregarding child-support collections to current TANF cash
assistance recipients. We would also suggest that this passed
through and disregarded income be excluded from the income that
is counted to determine the family's Food Stamp benefit.
Otherwise, the family would be giving back to about one dollar
from every three it got. Finally, we note that this passing
through and disregarding of the child support collection will
require significant computer programming for a state such as
Maryland. Should the Congress mandate such a pass through, we
suggest that the states be given ample time to properly adjust
their automated systems to properly execute such a policy.
Giving states assistance in our continuing program improvement
and research efforts.
We have demonstrated that Maryland's welfare reform effort
is firmly based on continuing program improvement and using our
research results. Our program will continue to develop and
improve to better serve low-income Maryland families only to
the extent that we can gather enough meaningful data to
evaluate our programs and find out where people who have left
our programs are or are working. There are several databases
that have been constructed or are under construction that fall
under the jurisdiction of your committee. Access to either of
them would significantly assist Maryland in evaluating its
program, seeking a federal High Performance Bonus in the area
of TANF and improving the services we offer to our low-income
families. We would request legislation to allow us and our
researchers access and receive match information including
identifiers for TANF purposes from both of the following
databases:
The Expanded Federal Parent Locator Service
database, which holds employment information from all of the
states as well as the federal government. Maryland is a small
state surrounded by others with a large number of federal
employees. Access to this database, properly restricted to
preserve confidentiality and the proper use of the data, would
be of significant help to us in designing future enhancements
to our program and in targeting services.
The database being created under the authority of
Section 136(f)(2) of the Workforce Investment Act. While not as
powerful as the above database, we would say that cross-state
information is as valuable in designing and evaluating programs
to implement TANF as to implement WIA.
Thank you for your attention. I will be happy to answer any
questions you may have.
Mr. Cardin. Secretary Puddester.
STATEMENT OF HON. FREDERICK W. PUDDESTER, SECRETARY, MARYLAND
DEPARTMENT OF BUDGET AND MANAGEMENT
Mr. Puddester. Thank you. Chairman Johnson, Congressman
Cardin, Congressman English, I want to thank you for coming to
Baltimore, and joining us here. And Chairman Johnson, it is
sort of old home week for me. When I came to Maryland 21 years
ago, I had a little more hair. And as a legislative analyst,
Congressman Cardin was the Speaker of the House. It was sort of
like an old home week for me to come here.
I am going to repeat, I guess, a lot of what my colleagues
said here. But I think what you have at the table shows you the
commitment to welfare reform we have here in Maryland. But as
Delegate Rosenberg said, it is executive branch, legislative
branch, Republicans and Democrats before you.
My testimony comes from the perspective of the budget guy.
We have had a lot of success in welfare reform in this State.
Lynda talked to you a little bit about the reduction and the
caseload. But we also had a lot of challenges before us. We
have guided our program by one of local option, local answers
to these issues as part of an overall strategy the State has in
terms of outcome-based budgeting. What we have done is handed
these decisions, if you will, over to the local Department of
Social Services. And I think the results speak for themselves.
We do have some innovative stuff going on at the State
level. Congressman Cardin mentioned the $22 million increase in
child daycare in this budget the Governor has placed before us.
And there is $10 million for an afterschool program, which was
part of a piece of legislation that came out of the general
assembly last session. We both at the State and the local level
have some innovative programs that I think are contributing to
the success we have.
That is not to say we don't have challenges. You heard a
lot about sort of the next level in getting people more
independent and getting wages up for those people that leave
welfare. As Lynda's staff deals with the folks that are left on
the welfare rolls, you see average caseload costs going up. And
you see they are dealing with a more difficult client to place
out in the work force. And I think that is going to continue,
that her staff will continue to have more challenges as they
seek to continue to reduce the workload.
I want to thank this Committee, this Subcommittee, Members
of Congress for keeping the deal--that is very important to
us--in terms of selling this throughout the State. I want to
commit today that from the executive branch side, we are going
to keep our part of the deal, too.
We are trying to draw down our TANF funds. We are not going
to be supplanting general funds in their place. Delegate
Rosenberg talked a little bit about our dedicated-purpose
account. What we have set up in Maryland is an account to
capture the savings that we get from the reduction of the
caseload; that account is set aside and cannot be used for
anything other than activities related to this population.
Hopefully by the end of fiscal year 2001, we can get as
much as $70 million in that account. But the concept is that it
is there to help Lynda and her staff and the local departments
to deal with the issues that face us. And we will not be here
in Maryland siphoning off money that we are saving for other
purposes.
I want to thank all for the opportunity to come here today
and the help you have given us in making welfare reform a
reality here in Maryland. Thank you.
[The prepared statement follows:]
Statement of Hon. Frederick W. Puddester, Secretary, Maryland
Department of Budget and Management
Good morning, my name is Frederick W. Puddester, Secretary
of the Maryland Department of Budget and Management. It is a
great privilege to be here today to discuss the status of
welfare reform in Maryland. I would like to thank Chairman
Johnson for this opportunity and on behalf of the citizens of
Maryland express our gratitude for holding this hearing here in
Baltimore. I am honored to be here today with my colleague from
the cabinet Secretary Lynda Fox from the Department of Human
Resources, Dr. Cathy Born from the University of Maryland, as
well as the chairs of the Maryland Legislature Joint Committee
on Welfare Reform, Senator Martin Madden and Delegate Sandy
Rosenberg. This panel reflects the widespread commitment to
welfare reform in Maryland government as evidenced by the
presence to executive branch, the university community and the
legislative branch. We are all partners in making welfare
reform a success.
My testimony today is from the perspective of the Secretary
of Budget and Management. As a part of my duties, I am
responsible for the development and execution of the Maryland
State budget. The activities of welfare reform are a
significant activity for the Maryland Department of Human
Resources, itself one of the largest state agencies.
You have asked for my views on both the successes and
challenges of welfare reform in Maryland. Clearly the most
significant success has been the 66.1% reduction since January
1995 in the number of individuals receiving Temporary Cash
Assistance. This reduction in the number of individuals
receiving assistance is good for the individuals, their
families, and their community. As the Budget Secretary, I
clearly look forward to individuals transitioning from
receiving assistance to becoming taxpayers, their transition
from the expenditure to the revenue side of the appropriation
is always welcome.
One of the key components of welfare reform is the
requirement for work or work related activities as a condition
of assistance. The State of Maryland has been spending
approximately $40 million in locally driven reinvestment
strategies. We are allowing the local departments of social
services the opportunity to develop work related and training
activities which reflect both the needs and resources of their
communities. This flexibility is matched with performance
requirements as defined in outcome measures of our strategic
planning process known as Managing for Results.
Another significant development for Maryland is the
flexibility to utilize funds for support services beyond the
traditional assistance programs. Secretary Fox and her staff
have long advocated that it is insufficient to merely direct
individuals receiving assistance to find a job. Support
services are necessary to make both job training and continuing
employment a reality. Under welfare reform, Maryland has been
able to increase the support of childcare purchase of care by
approximately $28 million. The Governor's budget currently
under consideration by the state legislature will provide an
increase of 2100 slots for child care and bring the total
number of slots to almost 29,000. This effort will permit
individuals receiving assistance to provide care for their
children while attending work related activities and while
working. Similarly, a new initiative in Maryland called the
After School Opportunity Fund is being implemented under
welfare reform. Experts tell us that a significant portion of
inappropriate juvenile behavior occurs during the late
afternoon, after the conclusion of the school day, and before
the parents return from work. Our new program will assist in
providing quality programs for our children during these
critical hours and is anticipated to help reduce the number of
teenage out of wedlock births.
The road to welfare reform is not complete and there are
challenges remaining to be addressed. In Maryland, we have been
successful in reducing the assistance caseloads by 66.1% since
January 1995. A concern remains for those individuals who
remain on the caseload. We understand that these customers
often have multiple barriers to independence. These may include
lack of basic educational levels, poor basic job skills, few
job specific skills, possible substance abuse, and the lack of
family role models and mentors to be a successful employee. In
short, these individuals will be far more challenging and
expensive to return to work then those returned to date. We can
reasonably expect that some portion of these individuals will
not transition to employment within the five year time frame
and may ultimately require some level of state only support, if
they cannot be excluded from the time limitations under a
hardship exclusion.
The changes under welfare reform have had a significant
impact of other supporting services as well. While our
assistance caseloads has significantly declined, the
participation in the medical assistance program has continued
to grow. This growth has resulted from both revised eligibility
requirements as well as the ability to continue individuals in
these programs for a period of time after they transition to
employment With respect to the medicaid program additional
state resources are being utilized to meet the required federal
matching component.
From the beginning of welfare reform there was a
congressional commitment to maintaining the constant level of
funding for five years. It will be critical to continue this
level funding stream into the future. While the caseload may
have declined it has become apparent that the average costs per
recipient have been rising. As a greater portion of the
caseload represents the more challenging customers this trend
can be expected to continue. In addition, post welfare support
services such as childcare and after school programs are
critical to the program's long term success.
I believe that Secretary Fox and her staff have been
successful in transitioning individuals from the assistance
rolls to the employment rolls. However it is critical to note
that the initial job placement does not represent the end of
the story. Support will be necessary to assist individuals in
retaining their new found employment and perhaps more
importantly in developing the skills necessary to advance their
individual career path. We must continue the efforts to assist
individuals in not just obtaining a first job but being able to
eventually move in a career path to support their families
without government assistance.
It has been noted that Maryland has embarked on a strategy
to effectively and fully use available TANF dollars. I must say
this strategy has not resulted in supplanting of State funds in
any way. The State of Maryland has not, and I repeat has not,
realigned State funds previously allocated to the poor for
other governmental functions. We have not supplanted State
general funds with TANF Federal Funds. We have in some
instances elected to utilize TANF funds for allowable
activities in area of family support centers, dropout
prevention activities, and a healthy families program. The
state general funds which supported these activities have been
placed in a dedicated purpose or reserve account for family
investment programs. Their future use is restricted to
requirements as a result of an economic downturn or mild
recession. Both of these items are events which we have not
experienced since the beginning of welfare reform.
States such as Maryland will require the continued
Congressional assistance in the implementation of welfare
reform. The TANF program comes up for reauthorization in
federal fiscal year 2002 and needs to be reauthorized at the
current level. States need the continued flexibility to develop
and implement locally driven programs. We would hope that the
successes of the flexibility in welfare reform can be extended
to the medicaid program and food stamps as well.
Thank You for the opportunity to appear before the
Committee today and for your continued support and flexibility
to make welfare reform a reality.
Mr. Cardin. Thank you. Mrs. Johnson.
Chairman Johnson of Connecticut. I thank the panel for your
excellent testimony. There are so many questions. I will just
ask about a couple of different things first.
First of all, on this issue of daycare, your eligibility
guidelines are really very stringent. And yet if you are going
to succeed in the work force, and if your first job is entry-
level pay or even considerably above that, you simply can't pay
rent and daycare.
Now, do your eligibility guidelines look low because they
are for a bigger grant? Do you have a big voucher program that
helps the working poor? How is it you are getting people off
welfare when you actually have a very stringent guideline for
daycare subsidies?
Ms. Fox. I think it is important, with respect to
eligibility for childcare, to remember that we are basing it on
State median income. Maryland has among the highest State
median incomes. We will be increasing eligibility from 40 to 45
percent of State median income, which is about $29,900 for a
family of four.
So I think that it is a bit misleading when you state it in
terms of median income, and you compare it to the maximum
Federal allowable. So there is that issue.
Also we have certain dilemmas in childcare funding. If we
don't pay adequate rates to our providers, then we bar freedom
of choice of childcare from our families. We found that we
reached a point where our rates became outmoded and many
providers would not accept the children in our purchase-of-care
programs.
So we have increased the rates. We have also increased
eligibility limits. We also reduced our copayments; at one
point our copayments were higher. And we do have a cost-sharing
system with parents who are working, but not with parents who
are currently receiving cash assistance and on the way to work.
We always had a dilemma of do we serve children at a higher
level and serve a smaller proportion of the eligible
population, or do we serve more of the eligible population at a
somewhat lower rate? What we are really trying to do is
encourage everyone to avail themselves not just of childcare,
but of medical assistance. We have an eligibility limit of 200
percent of poverty for the State Children's Health Insurance
Program. So most of the children if they are not eligible for
Medicaid are eligible for MCHIP.
We also are encouraging use of food stamps. I guess one of
the things I would mention here, recognizing that it is not
within the jurisdiction of your Committee directly, that the
complexity of the Food Stamp Program is a real deterrent to its
use. Both our customers and our workers are confused by all of
the asset, deduction and income rules. It is just so
complicated for the size of the benefit that I think many
working families decide to forego it.
I think this unfortunate in many instances, but we are
trying to encourage use of food stamps. We have also been
heavily marketing the Earned Income Tax Credit (EITC), both
Maryland's refundable credit and the Federal credit. Because we
know if someone goes to work even at minimum wage, if they
receive the food stamps they are entitled to and the EITC, then
they have left poverty.
Mr. Madden. Let me follow up very quickly. I believe we
have about 31 percent of our people who have informal care, in
other words, a relative or somebody watching them. But,
Congressman Cardin, you urged the passage of an additional
pass-through of child support benefits to the mothers there.
One of the problems is that a pass-through doesn't affect their
eligibility for TANF funds in the State of Maryland, but it
does affect their eligibility for food stamps.
And that is another reason why I am saying why not devolve
food stamps back to the States here, let us cut through all
these bureaucratic layers and put more dollars into the
customers' hands. We can do it a lot simpler and clear up some
of these complicated rules out there.
Mr. Rosenberg. As Secretary Fox referred to the dilemmas in
childcare, if you increase eligibility and you don't increase
the amount of money available, fewer people get served. The
other dilemma we have is with our limits on spending growth in
Maryland on an annual basis that if we increased money for
childcare, that means there is less available for job training.
So that is the dilemma and the discussion we are going to
have during our budget hearing in the next month.
Chairman Johnson of Connecticut. I just have to say that
dilemma is better reconciled at each State than at the Federal
level, which is the way we used to do it.
Let me ask also how your drug screening program is working.
Do you have adequate drug treatment resources? Do you have
adequate mental health services?
Mr. Madden. We have adequate funds. One of our problems has
been getting people to identify themselves as substance
abusers. We make it very easy to do so. If you identify
yourself as a substance or alcohol abuser, you do not have to
comply with the work requirements or one of our work activities
that exempts you from having to go out and get a job.
We have funds available over and above the Medicaid
package. The Medicaid package calls for comprehensive substance
abuse treatment. Comprehensive is a deceiving word. It is not
really the appropriate word; it doesn't cover your residential
treatment. We put up $3 million for appropriate treatment for
mothers with substance abuse problems. And we have had
difficulty identifying enough people. Lynda can probably tell
you what we are going to do to rectify that.
Ms. Fox. When we began what we did, we had workers do a
screening. They used a CAGE screen, which is a basic interview
screen and then the Managed Care Organizations were to do a
more comprehensive assessment. There was a lot of passing of
paper back and forth. It simply didn't work very well.
So we tried a pilot in Baltimore City and in Prince
George's County, which is our other major urban jurisdiction,
where we placed substance abuse specialists on-site at the
local Department of Social Services, and they began to do all
the screening. We found we identified twice as many customers
having addiction problems. Thus, we were able to get at least
twice as many people to enter treatment.
So we found that that is working. There will be, we hope,
legislation this Session that will eliminate some of our other
screening mechanisms and substitute the placement of these
addiction specialists in the local department offices.
With the pilot program, we found that about 10 percent of
our customers had some type of alcohol or drug problem.
Chairman Johnson of Connecticut. How about mental health?
Ms. Fox. Mental health, we have not had as much difficulty
with. As part of the reform of Medicaid, we carved out the
public mental health system, and there is a 1-800 number that
anybody can call, either the customer or the customer's
workers, to link them with publicly funded mental health
services. So, if they get Medicaid, there is access. But if
not, there is other public funding and still access.
So access to those services has not seemingly been a
problem. We do have many customers, though, who do have that as
an issue.
Chairman Johnson of Connecticut. Thank you.
Mr. Cardin. Let me now recognize Congressman Phil English
from Pennsylvania. He has been a very valuable member of the
Human Resources Subcommittee and one of those individuals who
again has really reached out to all Members of the Congress to
move forward on a lot of progressive programs to help our
children.
Mr. English. Thank you, Mr. Chairman. And it is a real
privilege to be on your home turf today. It is a great
privilege to have an opportunity to hear some of the very
interesting things that are happening in Maryland.
Secretary Puddester, I was wondering. You state that
Maryland has not supplanted State general funds with TANF
funds, but that the general funds which supported these
activities have been placed in a reserve account for family
investment programs. I am intrigued by that. We have nothing
like that in Pennsylvania. Tell me how it works.
Mr. Puddester. The way it works, which we finally got the
regulations last April, we sat down with Lynda's staff, and
unfortunately the legislative session already ended, so we had
to work on the next budget; and we identified programs that
were eligible under the regulations that were currently funded
with general funds.
And what we have done in this budget, using drawing down
TANF funds and appropriating those moneys for those programs,
taking the general funds we had there and putting them in the
reserve account, so they are there for us for whatever purpose
and that reserve fund is in fact restricted. So it is a--there
is a way of drawing down them and taking the general funds that
were there and putting them in a special fund.
Mr. English. How much of a TANF reserve does Maryland
retain? Have you taken any special action to increase the TANF
spending to reduce any reserves that you have? Is there any
concern that you don't have rainy day funds and hence may not
have funds available when a recession hits?
Mr. Puddester. Yes. We actually are in very good shape in
Maryland. I am sure, talking to the folks in Pennsylvania, they
are in a similar position. We hope to have about $70 million in
the special account for TANF alone. We maintained in Maryland a
minimum, a statutory minimum 5 percent rainy day fund. We are
currently at the end of this budget cycle going to have a
number that is probably in excess of 10 percent of the budget.
So I think in this stage we are in very good shape in Maryland,
in terms of both TANF reserve and our rainy day funds in light
of recession.
Mr. English. Thank you very much. Secretary Fox, I am
intrigued. One of the things that came up in a hearing we had
in my hometown of Erie, Pennsylvania, is the difficulty that
many people who now have eligibility for Medicaid are not
actually on the program, because as they leave TANF, they are
not continued automatically on it; and many of them are
apparently unaware of their eligibility and hence are not
ensured.
Is that a problem here? Or can you suggest a way that other
States can be avoiding this problem?
Ms. Fox. We were very concerned about that last spring, and
what we did was we imposed what we jokingly called the ``human
moratorium,'' because our computer couldn't support completely
what we wanted to do. We actually implemented a system whereby
a worker who was either denying an application for cash
assistance or closing a cash assistance case made a
recommendation but couldn't close the case, if she thought it
was supposed to be closed; then it was reviewed by her
supervisor. And then there was a review at the central office
of our department.
It is only after three people have looked at the case that
it could be closed. We have since then gone back and
reprogrammed our computers so that this will be happening in an
automated fashion now. What we have found is that we have
increased enrollment. Maryland is, I think, one of the
exception States in that our Medicaid caseload in total has
increased fairly considerably since the advent of welfare
reform. We believe that strategy helped us a lot.
The other thing that we have done is outreach since the
beginning of welfare reform about--not just medical assistance,
but also food stamps and the EITC and childcare and child
support. We have worked with the advocates and we have
distributed a lot of written materials, posters and videos. We
worked with an organization called the Southern Regional
Institute that worked with several of the southeastern States.
We are in the process now of updating all of those outreach
materials. Every place I go when I speak, I always talk about
the need to move from simply moving people off of the welfare
rolls to supporting low-income working families. I try to make
clear that some families are going to need these supports for
sustained periods of time and that there is nothing wrong with
accepting this kind of help. In fact, in our annual report we
have a very nice quote from one of our customers, and she said,
``I would be ashamed if I were too proud to take food stamps
when my children need groceries.''.
Mr. English. That is very impressive. And may I say if we
Republicans in Pennsylvania tried to set up something called a
human moratorium, it would be cause for alarm. But it sounds
like a very positive policy.
One last question, you have what we don't have in
Pennsylvania, and that is your own refundable EITC. What
experience have you had in marketing this? One of the
criticisms of the EITC on the Federal level that, I think,
sometimes honestly is overstated is the fraud problem. Have you
dealt with the fraud problem at all at the State level? Has
that in any way been a significant issue?
Ms. Fox. To the best of my knowledge, it has not been a
significant issue in Maryland. Our biggest challenges have been
having people understand both the Federal and the state credits
and knowing how to access them. Actually, one of our local
departments is going to provide vouchers to customers who have
left welfare for work so that they can get some tax preparation
services. We are going to see if that helps people to access
the credits.
Mr. English. Thank you. Thank you, Mr. Chairman.
Mr. Cardin. Thank you.
First, Secretary Puddester, I want to go over some of the
testimony that is going to come out later to give you a chance
to comment on it. Your credibility is so high in my view that,
if you tell me that you are not using TANF money for other than
to supplant State, I believe you. And I know that you are--you
have established a great deal of credibility over your career.
But there is going to be testimony later that there is $100
million of money that is being replaced, and there is another--
someone else is indicating that there is $22 million of the
surplus Federal funds that are being used to supplant, they are
using that money to supplant what the State was going to do on
their own.
I take it a lot of this has to do with this account you are
talking about where you are placing the savings in the account?
I guess my question to you is that, What are the restrictions
on the use of this money? Can the State come in and use it for
other purposes? I assume you can change the law. How certain
are we that the money is going to actually be used to deal with
the issues concerning welfare?
Mr. Puddester. Congressman Cardin, the statute is very
clear. When we set up what Delegate Rosenberg said, dedicated-
purpose accounts, there is budget statutory language when the
money goes into the account that details the uses on which it
can be utilized for. That language is in the budget this year.
So it is tied back to the State Reserve Fund Law, which sets up
the ability to set up these dedicated-purpose accounts.
We have used them in the past, savings and loan dedicated-
purpose accounts. We have got one, quite frankly, Congressman
Cardin, that is sitting there now, $50 million that we put in
place back in 1995 when there was an anticipation there would
be Federal cutbacks. Governor Glendening in his first budget
said let us set aside $50 million in the event that these
Federal cutbacks come in, and we will have a buffer.
No cutbacks came. The $50 million still sits there. We
could have grabbed off that $50 million if there was a lot more
flexibility at any time in the last 5 years. But because that
money was specifically put in that account to address cutbacks
in Federal aid and there were no cutbacks in Federal aid, the
money sits. And I think that is as good evidence as you can
have that the money will be used for the TANF-type related
programs.
Mr. Cardin. Thank you. I appreciate that.
Senator Madden, I appreciate also the point that you made
about the food stamp eligibility and pass-through of child
support. There is an offset; it is not dollar for dollar. I
think it is 3 to 1. But I think individuals are still going to
be better off financially with the pass-through, the families
are going to be better off financially with the pass-through of
child support.
The point, I guess, I am raising goes beyond the dollars.
We all want to connect families together; a child needs both a
mother and father to pay for the support as well as for other
purposes. And we want them to all at least be part of that
child. And the pass-through of child support has a better
chance for both parents to be involved in the raising of that
child.
I guess that is the main reason that I am concerned. And I
guess my question to you is that if we do change Federal policy
to help financially the States in paying for part of that, is
it possible you all might move aggressively in this area?
Mr. Madden. I think it would clear up a lot of our concerns
about it. Because it is my understanding now if we pass through
the child support, I think it costs us on our block grant also,
as far as the dollars we are getting from the Federal
Government.
Ms. Fox. Right. At this point, as you know, we split with
the Federal Government the child support that is collected on
behalf of cash assistance beneficiaries. I think we would be
willing to forego our side if the Federal Government were
willing to forego its side. It would help, I think, if there
were some disregard of that income for food stamp purposes, as
well as cash assistance purposes. Because the State frankly
would be foregoing $1 in $3 in Federal food stamp benefits if
we were to do both a pass-through and a disregard.
Mr. Cardin. That is fair enough. Let us see if we can't
work out something on that, see if we can't improve the Federal
law here.
Ms. Fox. I would add one other thing. If you do legislation
in that regard, if you would give States time to do the
computer changes that would be necessary to implement it, that
would also be very helpful.
Mr. Cardin. Delegate Rosenberg, I noticed that there is at
least proposals, tax proposals in the General Assembly to
expand the refundability of the EITC. I applaud the State for
what it has done. But it would be helpful if you could do more,
particularly when you are looking at changes in your Tax Code.
I have heard both the chairman of the Budget and Tax
Committee and the chairman of the Ways and Means Committee
indicate that they are looking at modifications of the EITC. Is
it likely that is going to happen this year?
Mr. Rosenberg. I think if those two chairmen are looking at
it, it is very likely there will be some progress on that.
Although we do have a question to what extent do we do things
of that nature which are entitlements, and say at x level of
dollars you are entitled to x sort of--whether it is a credit
or the earned income disregard or to what extent do we invest
in job training that will help people rise through the
economic--rise up the economic ladder. Because of our spending
affordability limits, which you are very familiar with, there
is only so much that we can do in the operating budget in any
fiscal year in terms of growth.
So that is a continuing issue for us. To what extent is it,
you know, investing, helping people earn more, to what extent
should we be using our operating budget dollars, for things
like income disregard, earned--the tax credit.
Mr. Cardin. I think it is a very good point. I expect you
are going to give the same political posture we are that you
are going to be looking at a tax bill this session. And it
would be helpful if part of that tax proposal deals with the
problems we are dealing with. It is--I don't think it is an
either/or, it seems to me that it is one in which you will have
an opportunity to make progress in both areas.
Mr. Rosenberg. I would hope we could, yes.
Mr. Cardin. Secretary Fox, on the Medicaid eligibles who
are not getting the benefits here, there is a little bit of
suspicion by the Federal Government, the States generally,
certainly not Maryland, that since you pay a good part of the
Medicaid bill, you may not be as aggressive in trying to get
people enrolled as otherwise you might. I was very much
interested in the fact that you sent out these insurance cards
and really working at the 60,000 that weren't enrolled in a
program they were eligible for. What success are you having?
Ms. Fox. We believe we have had considerable success. One
of the things we did to track this particular issue was engage
the Schaefer Center at the University of Baltimore to follow up
on customers leaving each month since January 1999. We have
been doing that now every month, and we will do it through the
end of the State fiscal year. What we are finding is a very
high proportion of those that leave for work are getting one or
more benefits, with the most common benefit being medical
assistance.
The State has spent a lot of money expanding the CHIP
program. I believe our enrollment strategy worked. We achieved
in 1 year what we expected to get in 18 months. So the State
has been making a considerable investment in medical
assistance, and it has created a few headaches for Fred. I
think those of us working in welfare reform really think that
medical coverage is a key support needed by low-income working
families, especially those with children.
Mr. Cardin. It certainly is part of the overall picture. If
you can keep us informed on that, I know that our Committee is
very interested to get those who are eligible for Medicaid
enrolled.
Chairman Johnson of Connecticut. I would like to make a
couple of comments. First of all, we are going to be holding a
hearing on Medicaid and the problems and how States can do a
better job, and perhaps you would be willing at that time to go
through some of the detail of how you dealt with the problem of
the fall-off in Medicaid participation.
Second, I would like to put on the record two things. First
of all, the national figures in terms of the number of people
returning to the welfare rolls after having left are
discouraging, high. One study recently described it as a 30
percent return rate, and your low return rate is really a
marvelous achievement, in my mind.
Third, we looked very closely last year at including in a
bill that we tried to help you with the welfare-to-work
programs by making it easier to use some of that surplus that
had not been drawn down for rainy day funds. If we do it from
our end, then there is a new cost estimate, and we have to pay
for it.
I do want to point out that you have done it very, very
well. By using the--by drawing down your TANF funds and using
some of your match to have a rainy day fund, you have
effectively achieved the goal that we wanted you to achieve but
now cannot foster. You have done it perfectly legally, it is
absolutely right, but it is concerning to me that some States
were not prepared to draw down their funds for services for a
rainy day fund. So again, you are really a model of successful
effort in that area, and we commend you.
I do want to urge you to work with us on this issue that
you have brought of enlarging the block grant at least on a
pilot basis. We have struggled with this many, many years. As
you point out, if you change the food stamp eligibility
criteria, you pay a lot more money, or you can put a lot of
people out of the program. It would be interesting to get your
thoughts on what you could do if you had a waiver.
We need to think to have some better insight into how that
would work so that we can trust that level of devolution. You
do have two different Committees involved. I am very interested
as we approach reauthorization, and, Senator Madden, I did not
realize how urgent it was that we give you some direction this
early.
Mr. Cardin. Just to interrupt, you are on your own for at
least 1 year.
Mr. Madden. But you understand the situation?
Mr. Cardin. I understand. I have been there in your
position.
Mr. Madden. Eighty percent of the people we cannot exempt.
Chairman Johnson of Connecticut. Maybe we can do a 1-year
extension with no changes in the law. But I do think that given
the remarkable changes in the bureaucracy in the Federal and
State and local levels that this reform has produced, it would
be a shame to permanently reauthorize for another 5 years
without understanding where we could go further. I think the
coincidence of having developed the Work force Investment Act
and the much greater flexibility in the use of job training
funds at the same time we did welfare reform was really a lucky
happenstance. But I think particularly in a State like this,
where you have really used the flexibility and are doing
different things in different areas, we would value your input
as we approach reauthorization. And I think a pilot project
under that reauthorization is the least we can do.
So you will note or--I don't know why you would follow our
business when you have plenty of your own. We have used what we
have learned in welfare reform to amend the independent living
program and try to replicate the services and supports to those
young people leaving foster care and making the transition to
work and independence. We are doing that in the fatherhood
area, although we have much to do to create a national program,
but we hope to support States like yours that are doing that so
we can develop knowledge as to what a national program should
look like, or whether that should be folded into the block
grant.
So there are many ways that we are trying to roll out what
we have learned from welfare reform in other areas so we can
move as a nation from a dependence model to a supportive work
model across the board. And as we approach reauthorization, we
really do invite you to recommend--make recommendations as to
how we change that.
Just one last question along that line: Do you have any
comments about the new regulations that the administration has
just published creating some new categories of awards to be
added to measure State performance beginning October 1, 2000?
Is this a good thing?
Ms. Fox. We do have some concerns about some of the
additional measures and whether they are really measuring the
right thing. We have prepared written comments on those
regulations that we are submitting to HHS, but we would be glad
to send a copy to you.
Chairman Johnson of Connecticut. Thank you very much. It
was a very good panel, and we appreciate your input, and we
look forward to working with you.
Mr. Cardin. Let me compliment Chairman Johnson because I
think these hearings will be very valuable as we reauthorize
the TANF law. Your testimony today helps us in that process.
Our second panel includes Lynda Meade, who is the Director
of Social Concerns, Catholic Charities of the Archdiocese of
Baltimore, and Chair of the Welfare Advocates Coalition; Sharon
Duncan-Jones, Executive Director, Park Heights Corridor
Coalition, Baltimore; Steve Bartolomei-Hill, Director of the
Maryland Budget and Tax Policy Institute, Silver Spring,
Maryland; Dr. Catherine Born, professor, School of Social Work,
University of Maryland at Baltimore; Dr. Stanley Carlson-Thies,
Director of Social Policy Studies, Center for Public Justice,
Annapolis, Maryland.
Without objection, your entire statements will be made part
of our Committee record. You may proceed as you wish. We will
ask that you try to limit your formal presentations to no more
than 5 minutes.
First it is a pleasure to call upon Lynda Meade, who has
been a longtime advocate on behalf of welfare reform.
STATEMENT OF LYNDA MEADE, DIRECTOR OF SOCIAL CONCERNS, CATHOLIC
CHARITIES, ARCHDIOCESE OF BALTIMORE, AND CHAIR, WELFARE
ADVOCATES COALITION
Ms. Meade. Thank you. It is a pleasure to be here today.
What I wanted to talk to you about is a perspective that you
may not have heard before. Let me tell you that Welfare
Advocates is made up of about 500 groups, basically community-
based human service agencies, faith communities, consumers as
well as advocate groups, and we are a statewide organization
which has been in existence for 21 years.
We decided to undertake a survey of consumers to see what
they thought about the new welfare reform, and I think that you
will be pleased to know that many said--we received 1,700
responses from across the State, which is really a pretty
significant number. Many folks said that welfare reform had
really helped them get a new lease on life, and for those folks
and for those who do feel that they have a new lease on life,
that is very, very important.
They did raise a number of concerns, and I would like to
briefly talk about three of those concerns with you. First, the
consumers who replied said that Maryland's policies, and I
think we have talked about this a little bit, encourage entry-
level, low-wage jobs where it is difficult to make ends meet
and where support after employment is minimal. And I would just
like to make a couple of quotes because these folks actually
said how they felt about what was good about welfare and what
was bad. One said that, ``they cutoff benefits too soon after
getting a job.'' Another said ``they are more serious about
getting a job and not caring sometimes about the outcome;'' ``I
feel more financially unsure''. Or, ``there is more pressure on
me and my family''; or, ``the daycare does not pay enough for
the care of my child''.
These are some of the comments that address the issue of
low wages and minimal support after employment, but we believe
that Maryland is in a unique position to adopt some policies to
address these issues, and examples would include at the State
level increasing the refundable portion of the earned income
tax credit, and we would endorse any expansion at the Federal
level as well; the proposal to expand the Children's Health
Insurance Program to higher-income families, and we think that
is important; as well as expanding health benefits to low-
income working parents.
You mentioned child care a number of times, and annually
indexing the percent of median is important because a person
might be eligible today, but if their salary goes up, they may
not be eligible next year, as well as making sure that copays
are affordable.
Second, training and education was viewed by consumers as
absolutely critical. Well over half said they needed education
or training to obtain better employment, better paying jobs,
and many said that they thought that their education and job
training should count toward participation work activities.
There is opportunity in Annapolis this year to open the door
toward education and job skills training for low-income working
parents and would allow folks on welfare who are participating
at least 20 hours a week to be able to access this, and it is
something that we would absolutely endorse. Employers say that
they want to hire people with basic academic skills, and our
folks say that they need literacy, and so we think that all of
that is good.
The third point I would like to make deals with the
customers who responded said that assistance has declined not
just once they leave welfare for work, but when they are
applying or while they are on welfare. Welfare advocates would
say that people need a basic safety net. Some comments from the
surveys include, ``I can't make ends meet,'' and ``I am behind
in rent''. There are a number of policies that Maryland enacted
at the start that really were cost-saving measures until they
were sure what was going to happen within the context of
welfare reform. The feeling is that Maryland should rescind
some of those policies. One is the child support pass-through,
and the legislation here provides for a full pass-through, and
we believe that it not only encourages the responsibility and
the participation of the noncustodial parent, but is actually
an incentive to participate in child support payments.
The other thing that Maryland did was eliminate a 14-day--
instituted a 14-day delay in payment, so you apply for welfare,
you are deemed eligible, but you only get 2 weeks' worth of
benefit, and that is really placing families at dire hardship
when they are already financially unstable. It means utilities
arrearages, it means being behind in rent, and it is asking a
family who is going to start to look for employment to try and
really play catch-up.
I am going to close. There are a couple of other policies
that we think should be eliminated: The child-specific benefit
and the $60 income counting against eligibility for subsidized
housing. We attach the comment--a synopsis of comments. These
are real people, 1,700 real people talking from the State of
Maryland, and obviously some are doing well, and others
continue to need more help, and still others are struggling in
their quest.
We would suggest that any additional welfare policies in
Maryland assure that families fare well. Thank you very much.
[The prepared statement follows:]
Statement of Lynda Meade, Director of Social Concerns, Catholic
Charities, Archdiocese of Baltlimore, and Chair, Welfare Advocates
Coalition
Mr. Chairman and members of the U.S. House of
Representatives Ways and Means Subcommittee on Human Resources,
my name is Lynda Meade. I am Director of Social Concerns for
Catholic Charities in the Archdiocese of Baltimore and am
before you today as Chair of the Welfare Advocates coalition.
Welfare Advocates is celebrating its 21st anniversary this
year. We are a statewide coalition of 500 community-based human
service agencies, faith-based organizations, advocacy groups
and consumers. We strongly believe that the true measure of
welfare reform is not the reduction in caseload, but whether
families are ``faring well''.
We think it is important for policy makers to know how
current or former welfare recipients view welfare reform. To
determine their views, we designed a simple questionnaire that
we distributed across the state--in local social service
offices and through our network of service providers.
We had circulated a similar survey in the early 1990s and
received nearly 1,300 responses. With welfare reform and the
drop in caseload, we expected to receive about 800 or 900
replies.
We had more than 1,700 responses from across the state. The
responses came from every jurisdiction in Maryland except
Caroline County on Maryland's Eastern Shore. The results were
analyzed by Dr. Daphne McClelland of the University of
Maryland, Baltimore County.
The five open-ended questions we asked were:
1) What do you think is good about the new welfare
program?
2) What do think is bad about the new program?
3) How have the welfare changes affected you and your
family?
4) What would help you get off of welfare?
5) What changes would you make to the welfare program?
The responses truly reflect consumers' views of the
successes and challenges of welfare reform in Maryland. I would
like to weave together the results of the survey, some actual
quotes from those who responded together with policy directions
we believe Maryland should adopt.
By far, the number one response to what is good about
welfare reform was the assistance. In the words of consumers:
``Helps people get a new lease on life.''
``Try to help you get on your feet.''
``Assistance in finding a job.''
Other major response categories were improved policies--
``helps when you really need it'' and a better process--
``improved efficiency and accuracy''
Slightly more than half responded that welfare reform had a
positive effect on them and their family.
``I feel good about working for what my family has; it's
sometimes tough financially.''
``[It has] opened my eyes to a better life. And I'm determined
to make it.''
``We are still struggling but soon hope my independence will
surface.''
And, the simple, yet meaningful statement: ``I learned to
drive.''
Conversely, the number one answer to what is bad about the
new program also was the new policies--specifically the policy
requiring people to take any job at any wage and that once
employed, support is minimal. ``[They] cut off benefits too
soon after getting a job,'' wrote one person. Another said,
``they are more serious about making you get a job and not
caring sometimes about the outcome.'' Still another person
wrote, ``I'm afraid of losing benefits if I work over my
scheduled hours.''
Time Limits and the lack of a safety net are other policies
of concern to consumers. One person responded, ``anyone can
fall on hard times and they may really need help again until
they can get back on their feet.''
The second most frequently stated answer to what is bad
about welfare reform was the decline in the types and amounts
of assistance. Concerns raised included providing Medical
Assistance to adults for only one year, the lack of child care,
job training and housing opportunities.
At the same time, nearly half of those responding said that
welfare reform had resulted in a negative effect.
``I feel more financially unsure.''
``There's more pressure on me and my family.''
``I cannot make ends meet''; ``I'm behind in rent.''
``The day care assistance doesn't pay enough for the care of my
child.''
``It has made us get 2 jobs to meet the criteria and then it
made us over income to receive MA.''
We believe that Maryland has a unique opportunity to adopt
various policies to address the issues of limited income and
the need for post-employment support that were so eloquently
cited by consumers. These policies include:
Raise the refund amount for Maryland's Earned
Income Tax Credit
Expand Maryland's Children's Health Insurance
Program to cover more children
Extend health insurance to low-income working
parents
Raise and index the eligibility standard for Child
Care so more families would be eligible and assure that co-
payments are affordable
Raise our state's income disregard that is now
pegged at 35%.
In response to the question, what would help you get off of
welfare, the overwhelming response was ``better'' employment--
better pay, a permanent job, benefits and more job
opportunities, particularly on the Eastern Shore and Western
Maryland.
Training and education were considered critical components
for consumers to leave welfare. Almost 50% of those responding
spoke of the need to continue their education, to obtain a GED
or to receive some training. And, they want their efforts to
count toward requirements for work activities. Maryland should
enact the Working Parents Opportunity Act currently before our
legislature to allow parents working or in work activities at
least 20 hours per week to be supported in their quest for
education and training.
Consumers also want a more individualized approach. ``See
the uniqueness of each case,'' wrote one individual. To assist
individuals currently on welfare, many of our members believe
funds should be made available to work activity and job
placement vendors to provide case management services. These
service providers are in an excellent position to develop
linkages for health, substance abuse treatment, mental health
services, housing, transportation and other needs as they are
working with individuals and families on a daily basis.
For those who apply for assistance or who continue to
receive welfare benefits, we believe that Maryland should
rescind a number of policies adopted some years ago as
primarily cost-cutting measures. Our recommendations include:
Restore the Child Support pass-through provision
and pass-through 100% of the payment.
Eliminate the 14-day delay in benefits upon
approval of eligibility
Eliminate the Child-Specific Benefit provision
that requires a 3rd-party payee.
In conclusion, it is evident to us that some families are
empowered by the opportunity to work and to leave welfare.
Others face challenges and continue to need assistance and
still others are working yet struggling to make ends meet. We
believe that now Maryland is in an extraordinary position to
meet the continuing needs of its citizens and to help families
to ``fare well''.
Thank you for the opportunity to testify before you today.
What Families on Welfare or Who Have Moved into Work Think About
Welfare Reform
The Responses of More than 1,700 Families
Profile of Those Responding:
Slightly more than \2/3\rds said they were not
receiving cash assistance
Almost 2/3rds said they were receiving Food Stamps
Slightly more than said they did receive Medical
Assistance
Almost 9 in 10 said they did not receive housing
assistance
Almost 95% said they did not receive energy
assistance
Responses are from every jurisdiction in Maryland
except Caroline County.
Almost \1/2\ of those responding were from
Baltimore City.
The Survey Results:
1. What Do You Think is Good About the New Welfare Program?
The Assistance: (69%)
``Helps people get a new lease on life.''
``Has caused more people to be more responsible.''
``Assistance in finding a job.''
``Try to help you get on your feet.''
Improved Policies (38%)
``Helps you when you really need it.''
``Pretty good for those who want to help themselves.''
``Helps in time of need.''
Better Process: (15%)
``Improved efficiency/accuracy.''
``Workers more responsive.''
2. What Do You Think is Bad About the New Welfare Program?
The new Policies: (37%) Specifically:
a. Forced to take any job/Low Wages & Little Support:
``People are taking jobs that they don't like which
will cause them to change jobs more;''
``Welfare is not patient with people having a hard
time finding and/or keeping a job.''
``Cut off benefits too soon after getting a job''
``Lack of good paying jobs' ``Not enough good jobs.''
``No transportation in rural areas''
``Low paying jobs won't support families''
``I'm afraid of losing benefits if I work over my
scheduled hours.''
``They are more serious about making you get a job and
not caring sometimes about the outcome.''
b. Time Limits
``If you don't have a job by their deadline they cut
you off and if you start working they cut you off right away''
``Anyone can fall on hard times and they may really
need help again until they can get back on their feet.''
c. Lack of a Safety net:
``Those who struggle to maintain independence can't
get help on medical or even food.''
``What about people who can't work'' ?
Decline in the Types and Amounts of Assistance (25%)
``Only give MA for 1 year.''
``Doesn't give people enough child care and medical
assistance time''
``Need more money.''
``Training is lacking for employment''
``Not enough housing opportunities''
``The Process (23%)
``Long wait''; ``Unorganized.''
``Now takes longer (14 days) to get assistance''
``Child care vouchers are never on time.''
3. How Have the Welfare Changes Affected You and Your Family?
``There has been a positive effect said nearly 55% of those who
responded
A. On The Individual and Family:
``I feel good about working for what my family has;
it's sometimes tough financially.
``Made me responsible and independent.''
``Opened my eyes to a better life. And I'm determined
to make it.''
``It has made me try to get a job so that I don't have
to deal with welfare anymore.''
``We are still struggling but soon hope my
independence will surface.''
B. The Assistance has Improved:
``I found a better doctor for my son.''
``I have more food each month, my bills are paid and
I'm thankful.''
``I learned to drive.''
``There has been a negative effect said nearly 45% of those who
responded
A. On the Individual and Family:
``I feel more financially unsure.''
``I worry a lot ``I'm afraid.''
``There's no hope for help in the future if needed.''
``There's more pressure on me and my family.''
``I spend more time away from my children.''
``Mothers cannot mother properly''
B. The Assistance has Declined:
``I did not receive benefits this month.''
``I cannot make ends meet; ``I'm behind in rent''
``Was discontinued from receiving TCA for not looking
for a job while in school''
``I am not a citizen so things have become much harder
and my child suffers.''
``The day care assistance doesn't pay enough for the
care of my child''
``It has made us get 2 jobs to meet the criteria and
then it made us over income to receive MA.''
4. WHAT WOULD HELP YOU TO GET OFF OF WELFARE?
A Job; A better job (96%)
``A better paying job.''
``A permanent job with benefits.''
``A job where hours can match my child's school.''
``A decent paying job.''
``More jobs on the Eastern shore''; ``More jobs in
Garrett County''
More Training and Education (47%)
``Help in continuing my education.''
``Obtain my GED and get training for a good paying
job.''
``Some type of training program.''
Child Care Assistance (12%)
``Help with a job and day care.''
``A babysitter I can trust.''
``Day care help.''
``After-school programs for children of parents who
are working.''
Other Areas of Importance:
Transportation (5%)
Housing (4%)
Child Support (4%)
Drug Rehab (1%)
Housing (4%)
Health Care (3%)
5. WHAT CHANGES WOULD YOU MAKE TO THE WELFARE PROGRAM?
Quality jobs, not just any job
``Put more into helping parents find decent jobs''
``To make sure the jobs people are getting are good
career jobs and pay enough money''
Quality child care, not just any child care
``Better child care''; ``more funds for child care''
Education/Training Opportunities for all recipients who need it
``Define education as a work activity''
``Include serious training so people could et jobs
with benefits''
``More emphasis on education and other programs which
would lead to self-sufficiency''
``Social Services should make people with no high
school get a GED''
``Would push college/vocational education as well as
job finding skills''
Policy should focus more on health and children
``Focus more on children and medical''
``Give child with disability treatment, not just
money''
``Make dental available''
``Keep medical assistance at all times''
Time limits should be extended
``Could reapply after the 5 year limit if really in
need''
``Be more patient with people and don't take people
off so quickly''
People Need a Basic Safety Net
``Help people until they can find a job''
``More Food Stamps''; ``More help with utilities'';
``Provide more money for housing costs''; ``Make it easier for
families who stay together''; ``Give more support''
``Increase the minimum gross amount a family can earn
in order to receive public assistance''
Provide Transitional Support when Leaving Welfare for Work
``Working single parents should be allowed to receive
TCA for 1 year to assist and prevent any reason to return''
``Need day care when sent to work programs''
``Extend time receiving benefits even when get a job''
``Need to invest more money for a person to get
ahead''
``Extend child care and medical assistance''
``Something to help working moms''
Recipients Should be Informed of Policy and Policy Changes
``Better information about programs''
``Inform recipients about how program works before
cutting them off''
Policy should be Tailored to Needs of Individual
``Assess the problems the family is incurring:
Childcare availability; give specific training, assess housing
situation, transportation''
``Better screening''
``See uniqueness of each case''
``Rules are made on a general basis, but really need
to observe on case by case situation''
``Handle cases individually and take into
consideration each unique situation''
Workers Should Treat Recipients with Respect and be Efficient
and Effective
``Workers need to be more professional''
``Should see worker at time stated on interview''
``Workers that like to work with people''
``Understanding from workers''; ``Encouragement from
workers''
``Have a person to take messages from callers and put
on workers' desks''
``Workers you can get in contact with''
``Smaller caseloads for workers''; ``Don't change
caseworkers so much''
``More efficient workers''; ``Quicker processing''
Prepaped by Welfare Advocates: 1/2000 Based on an analysis
by: Daphne McClellan, Ph.D., MSW, University of Maryland,
Baltimore County
STATEMENT OF SHARON DUNCAN-JONES, EXECUTIVE DIRECTOR, PARK
HEIGHTS CORRIDOR COALITION, INC., BALTIMORE, MARYLAND
Ms. Duncan-Jones. Thank you for the opportunity to share a
grassroots perspective on the socioeconomic impact of welfare
reform. I am going to kind of tailor my comments first by
giving you a statistical overview of the Park Heights community
which I represent, also assess welfare reform from a
neighborhood perspective, as well as acknowledge some real
creative ways that the local department is using some of its
flexibility and how it really complements some of the
revitalization efforts in Baltimore, and in particular the Park
Heights community.
I am going to offer what I believe are some common-sense
approaches how we can further leverage our welfare reform and
allow these lessons to really benefit the families and the
communities that we serve.
Park Reist Corridor Coalition is a grassroots organization
which is committed to revitalizing the social, economic and
environmental infrastructures of Park Heights. Geographically
it is located in northwest Baltimore, and it is the single
largest neighborhood in Baltimore City. Park Heights is in the
Seventh Congressional District, populated with nearly 40,000
residents, which embody 1,733 acres. Park Heights is described
as the largest urban renewal area in the United States.
Park Heights is not an empowerment zone. The social and
public health indicators impacting Park Heights reflect a
blighted community. Child maltreatment, crime, infant
mortality, substance abuse, diabetes, crime, and HIV/AIDS are
the highest in the State, and the present economic condition in
Park Heights can be linked to past conditions in Baltimore
beginning in the seventies when manufacturing jobs began to
fall. Since 1990, Baltimore City has suffered a loss of 63,000
manufacturing jobs. Specifically, Park Heights has experienced
economic decline with two major companies relocating out of our
community and out of the city. That is London Fog, a clothing
manufacturer, and Park Sausage, a meat manufacturer.
In spite these blighted conditions, the strength of Park
Heights is the resiliency of its people, its residents, who
desire in live in a safe, sober and economically sound
community.
The big question today is has welfare reform worked in
Baltimore and in Park Heights. Depending on how you define
success, I think the answer will differ. Has Maryland been
successful in decreasing the welfare roll, welfare dependency
and welfare caseloads? Yes. Has welfare reform significantly
impacted the socioeconomic well-being of Maryland, Baltimore
City and Park Heights? I don't believe so, so my answer is no;
no because obtaining employment is not enough in changing human
behavior.
Our families and communities need intensive family centered
services that focuses on building the individual, the family
and the community. However, there is hope. The Baltimore City
Department of Social Services' new Northwest Project is very
promising because its 3-year initiative which commenced October
1999 leverages lessons learned from social service delivery and
welfare reform. The new initiative begins to boldly and
realistically address the socioeconomic barriers to obtaining
self-sufficiency. The generic caseloads, which consist of one
clinician to eight families, enhances not only the family
capacity, but the community's capacity as well.
The project goal is to infiltrate Park Heights with intense
family centered services. Thus far, the community's response to
this has been incredible, mainly because a governmental agency
finally gets it. Comprehensive approaches to welfare reform,
can be cost-effective, and they can work.
I really want us to continue to be creative, particularly
when we are talking about urban-based communities impacting
African American families and using common-sense approaches to
enhance effectiveness of welfare reform. Spend the funds wisely
and invest in the human spirit, and I have a couple of
suggestions. I believe that we really need to maximize the
family centered services to assist the employers in reducing
job retention. We need to pool multiagency resources like HUD,
EPA, Department of Commerce, the Justice Department, Education
Department, CDC to maximize the family and community capacity
to be sober, safe and economically sound. We need to leverage
the community, establish linkages with the community-based
revitalization efforts and welfare reform. When doing so, we
systematically leverage critical resources like health care,
education, community development and job training services.
Another point, we need to utilize the unique capacity of
faith-based institutions to further nurture the human spirit of
families and communities.
My final point is we need to invest in communities to
enhance the local economy on a neighborhood-level by advocating
for specific job training to restore the basic retail services
like dry cleaners, bakeries and family restaurants. In Park
Heights, as large as it is, there is only one family
restaurant. Let's start designing healthy and family friendly
communities.
Bottom line, poverty cost; and poverty left to fester
carries an intergenerational price tag that we cannot afford.
Getting a job is not enough. Strengthening people, families and
the socioeconomic infrastructure of communities will yield
positive and sustainable results in America, Maryland,
Baltimore City and Park Heights.
Thank you for the opportunity to share the reality of
welfare reform in Park Heights with you today.
[The prepared statement follows:]
Statement of Sharon Duncan-Jones, Executive Director, Park Heights
Corridor Coalition, Inc., Baltimore, Maryland
Introduction
Hello, I am Sharon Duncan-Jones, Executive Director of the
Park Reist Corridor Coalition, Inc. a grassroots nonprofit
organization committed to revitalizing the social, economic and
environmental infrastructures of Park Heights. Geographically,
Park Heights is located in Northwest Baltimore, and it is the
single largest neighborhood in Baltimore City. Park Heights is
in the 7th US Congressional District of Maryland. Populated
with nearly 40,000 residents which embody 1,733.7 acres, Park
Heights is described as the largest urban renewal area in the
United States. Park Heights is not an empowerment zone.
Statistical Overview
The social and public health indicators impacting Park
Heights reflect a blighted community. Child maltreatment,
crime, infant mortality, substance abuse, juvenile crime,
diabetes, and HIV/AIDS are the highest in the State. The
present economic condition in Park Heights can be linked to
past conditions throughout Baltimore. Beginning in the 1970's,
manufacturing jobs had begun to fall. Since 1990, Baltimore has
suffered a loss of 63,000 manufacturing jobs. Park Heights has
experienced economic decline with two major companies
relocating out of the community and the city: London Fog, a
clothing manufacturer and Park Sausage a meat manufacturer.
Park Height's unemployment rate is 22%, and it is well above
the city's average.
Yet, despite these blighted conditions, the strength of
Park Heights is the resiliency of the residents. Residents who
desire to live in a sober, safe and economically sound
community.
Assessing Welfare Reform
The big question for today is, has welfare reform worked in
Baltimore City and in particular, Park Heights. Depending on
how you define success, the answer will differ. Has Maryland
been successful in decreasing the welfare roll, welfare
dependency, welfare caseloads, yes! Has welfare reform
significantly impacted the socioeconomic well-being of
Maryland, Baltimore City, Park Heights, no! No because,
obtaining employment is not enough in changing human behavior.
Our families and communities need intensive family-centered
services that focuses on building the individual, their
families and communities.
Promising Socioeconomic Approach to Welfare Reform
However, there is hope. The Baltimore City Department of
Social Services' new Northwest Project is very promising
because the three-year initiative which commenced October 1999,
leverages lessons learned from social service delivery and
welfare reform. The new initiative begins to boldly and
realistically address the socioeconomic barriers to obtaining
self-sufficiency. The small-generic caseloads (1:clinican to 8
families) enhance family and community capacity. The project's
goal is to infiltrate Park Heights with intense family-centered
services. Thus far, the community's response has been
incredible. Mainly because a governmental agency finally gets
it! Comprehensive approaches to welfare reform are cost
effective and they can work!
Creative and Common-Sense Approach & Strategies
Let's continue to be creative and use common sense
approaches to enhance the effectiveness of welfare reform.
Spend the funds wisely. Invest in the human spirit. I have a
few suggestions:
Maximize family-centered services to assist
employers in reducing job retention.
Pool multi-agencies resources like HUD, EPA,
Department of Commerce, Justice Department, Education
Department and CDC to maximize family and community capacity to
be sober, safe and economically sound.
Establish linkages with community-based
revitalization initiatives and welfare reform. When doing so,
we systemically leverage critical resources like health care,
education, community development and job training services.
Utilize the unique capacity of faith-based
institutions to further nurture the human spirit of families
and communities.
Invest in communities to enhance the local economy
on a neighborhood-level by advocating for job training to
restore the basic retail services like dry-cleaners, bakeries
and family restaurants. Let's start designing healthy and
family-friendly communities.
Bottom-line, poverty cost; poverty left to fester carries
an intergenerational price tag that we can not afford. Getting
a job is not enough. Strengthening people, families and the
socioeconomic infrastructure of communities will yield positive
and sustainable results in America, Maryland, Baltimore City
and Park Heights.
Thank you for the opportunity to share the reality of life
in Park Heights with welfare reform.
Mr. Cardin. Mr. Bartolomei-Hill.
STATEMENT OF STEVE BARTOLOMEI-HILL, DIRECTOR, MARYLAND BUDGET
AND TAX POLICY INSTITUTE, SILVER SPRING, MARYLAND
Mr. Bartolomei-Hill. Thank you. I am Steve Bartolomei-Hill,
Director of the Maryland Budget and Tax Policy Institute, which
is a project of the Maryland Association of Nonprofit
Organizations. I am going to talk about three things today: How
well people are faring once they have left welfare, the
opportunities that exist to mitigate some of the hardship that
continues for people who have left, and people who remain on
the rolls, and talk about the State maintenance-of-effort
requirements.
Now, caseload declines have been the numbers that have been
used the most to tout success of welfare reform, and the
declines have been dramatic. At their peak, three times as many
people received welfare in Maryland as currently are on the
rolls. These caseload declines do mask some of the hardship
that continues.
The Department of Human Resources has been tracking people
who have left welfare. One of the things that they found is
that at the time that people leave welfare, about half of them
are found to be working. Four out of 10 are working in both the
first and second quarters after they have left welfare, but
only 3 out of 10 are found to have any earnings in each of the
first four quarters after they leave welfare. Their numbers do
understate the number of people who are actually working, but
even if they understate the number by half, it is clear that
many people have left, but they cannot be found to be working.
Even those that are working have earnings that remain quite
low. The median income is about $800 a month. That is below the
poverty level for any size family with children. Understand
that a substantial fraction are not working. Among the minority
that are working, half earn less than $800 a month. Clearly
many families continue to struggle to make ends meet. Part of
that is by design. As Senator Madden said, the State has
earnings disregards and a benefit level that intentionally ends
eligibility for benefits when people's earnings remain very
low.
However, amidst this hardship, there are substantial
opportunities to make some improvements. The caseloads have
declined. That leaves fewer people to work with. State and
Federal resources remain available at their prereform levels
based on the fixed block grant. And independent of the welfare
funds, the State has a substantial budget surplus of about a
billion dollars, they are projecting budget growth of about 9
percent, and we have tobacco settlement funds. If only a
portion of these funds were invested in the well-being of low-
income families, the state could make substantial improvement.
Unfortunately, there have been only a few bills introduced
in this legislative session that make progress in that area. We
have talked about some of them, passing through child support,
reversing some of the earlier benefit cuts, and increasing the
State-earned income credit. However, as mentioned, some of
these simply reverse cuts, and none of these are assured of
enactment.
I think what is more telling are areas where policymakers
have not sought increases. Those areas include child care,
health care access for adults, and increase in benefits or
disregards.
I think one thing that is apparent is that the more
significant policy changes and the policy changes that cost
money remain outside of State fiscal priorities.
I think the continued Federal role is important. The
Federal Government can stimulate change perhaps by offering
incentives to States to take action. The Child Health Insurance
Program is a great example of that. When the child health
insurance block grant became available, suddenly increasing
access for children became a fiscal priority in most States. On
the other hand, without similar incentives, their parents got
left behind. While Maryland, like many States, provides access
to health insurance for low-income children up to 200 percent
of poverty, their parents get health insurance or lose their
health insurance when their income is about half of poverty.
That would be an opportunity. If there were Federal incentives
to increase health care access, States might do that.
Child care is another area. There was discussion about the
State increasing its child care limits. There has been some
modest progress. One thing that wasn't mentioned, though, was
that all of that progress is being made with Federal funds.
There have not been any new State funds invested in extending
child care.
And the child support disregards would be another area
Federal incentives could stimulate State policy. Most States
are not passing through child support to families that receive
cash assistance. So there might be some role for the Federal
Government in offering some incentives to do that.
Just briefly, on the maintenance of effort: one of the most
challenging aspects of understanding state policy choices under
welfare reform is being able to follow the money--both federal
and state welfare funds. Cash assistance payments in Maryland
have declined from $294 million in 1996 to about $100 million
for FY 2001, yet we are told that there is not enough money to
make program enhancements. It might be appropriate for your
General Accounting Office to look at what the fiscal conditions
are in States and where the money is going.
I will conclude there. In summary, many families have left
welfare, but even those that have left still endure economic
hardship. There are plenty of opportunities to make progress in
that area now. To the extent the policymakers argue that the
are no funds available for enhancements, we need to increase
our understanding of where the money is going. Thank you.
Mr. Cardin. Thank you.
[The prepared statement follows:]
Statement of Steve Bartolomei-Hill, Director, Maryland Budget and Tax
Policy Institute, Silver Spring, Maryland
Thank you for the opportunity to address you today. My name
is Steve Bartolomei-Hill, and I am director of the Maryland
Budget and Tax Policy Institute. The Institute provides timely
and accurate analysis of budget and tax priorities in Maryland.
We focus on how policies affect low-and moderate-income people
and other vulnerable populations, and the important community
programs that serve them. The Institute is a project of the
Maryland Association of Nonprofit Organizations.
Prior to directing the Institute, I worked for several
years in the Office of the Assistant Secretary for Planning and
Evaluation at the U.S. Department of Health and Human Services.
Because of my prior experience analyzing welfare issues, the
Institute has paid particular attention to the progress of
welfare reform in Maryland.
My written testimony focuses on two aspects of welfare reform
in Maryland:
caseload declines and indicators of well-being among
low-income families with children
opportunities that exist for enhancing Maryland's
welfare program, and the importance of federal leadership and
incentives
For your information, I am also including the following two
items:
policy choices made upon initial enactment of the
Personal Responsibility and Work Opportunity Act of 1996
state plans to meet the Maintenance of Effort
requirement
Behind the Numbers: Indicators of Success and Well-Being
In Maryland, as in many states, the most prominent number
used to tout success under welfare reform is the dramatic
decline in caseloads. At the pre-reform peak, three times as
many families received cash assistance in Maryland compared to
current enrollment levels. However, focusing on caseload
declines masks the economic hardship that continues for most
families that have stopped receiving cash assistance. Further,
the declines in caseloads have not coincided with commensurate
increases in employment.
Since October 1996, the Maryland Department of Human
Resources has been tracking the employment status of families
that have stopped receiving cash assistance. Their data, which
is based on state employment records, shows the following
outcomes:
Half of exiting families had earnings in the
quarter that they left welfare;
Four in ten exiting families had any earnings in
both the first and second quarters after leaving welfare;
Three in ten exiting families had any earnings in
each of the first four quarters after leaving welfare.
State employment data do not account for former recipients
who are working in other states, those who are in jobs that are
not covered by the state's unemployment insurance system. Thus,
it understates the number of former recipients who are working.
Nonetheless, as the majority of recipients live in Baltimore
City, which does not border another state, this factor is
unlikely to explain away the large percentage of families who
cannot be found on state employment data.
Among those who are fortunate enough to work, earnings
remain low. Median earnings are about $800 per month. Earnings
at this level are less than the federal poverty level for any
size family with children.
These employment and earnings outcomes say more about the
``success'' of welfare reform than simply looking at caseload
declines. Yes, families are no longer receiving cash
assistance, but most cannot be found to be working, and even
those who are working remain poor.
Several factors contribute to the continuing poverty of
those who have left welfare and those who remain. Benefit
levels remain low enough such that the day to day financial
hardship may itself be a barrier to work and the potential for
economic well-being. When recipients do begin to work, benefit
reductions begin at the first dollar of earnings, and are steep
(benefits are reduced by $.65 for every dollar earned). As a
result, a family of three loses eligibility for assistance when
earnings are about $650 in a month-an amount that is slightly
more than half of the federal poverty level.
Current Opportunities
Amid the ongoing problem of economic hardship, a confluence
of factors provides an unprecedented opportunity to help low-
income families.
The substantially reduced caseload leaves fewer
cases to work with, though today's recipients may have greater
needs and greater barriers to work.
The continued poverty of those who have left the
roles indicates the need to enact policies that help low-
income, working families make ends meet.
The availability of federal and required state
welfare funds provides resources to meet some of the needs of
low-income families with children.
Independent of welfare-specific funds, the state
has a budget surplus of nearly $1 billion, is projecting
spending growth of nearly 9 percent for the coming fiscal year,
and has an infusion of tobacco settlement funds. If just a
portion of these funds were targeted to lower income families,
Maryland would have the opportunity to make substantial program
enhancements.
A few bills have been introduced in this session of the
General Assembly that take advantage of this opportunity and
address some of the issues that contribute to income
inadequacy.
Child Support Pass-Through and Disregard Currently, none of
the child support that is collected on behalf of families
receiving cash assistance is actually passed on to the family.
Like 26 other states, Maryland keeps all child support
collected and shares it with the federal government. A proposal
would pass through and disregard all child support.
Make Benefits Payable From the Date of Application
Currently, new recipients and families who are re-enrolling in
the program receive a first-month payment that is roughly half
of the regular benefit-a maximum of $222 for a family of three.
This is one of three cost-saving measures that was implemented
in 1997 when there was concern that state and federal welfare
funds would be insufficient to cover costs. A proposal would
reverse this and provide the full benefit to new enrollees.
Earned Income Credit One proposal would increase the
state's refundable earned income credit from 15 percent of the
federal credit in tax year 2001 to 50 percent of the federal
credit.
While these are important proposals, some simply reverse
previously enacted cuts, and none are assured of enactment.
More telling are the numerous areas where policy makers are not
seeking to invest more state funds. These include essential
items such as child care, health insurance for adults, and
increases in benefits or disregards in the cash assistance
program. This highlights an important point about state policy
decisions affecting low-income people: the more significant,
and thus costly, items continue to remain outside of state
fiscal priorities, even in this time of plenty.
I believe that this indicates the importance of federal
leadership to stimulate policy change. A good example of this
is the Child Health Insurance Program, which has led states to
substantially increase health care access for children. Federal
financial incentives made expanding health care access to
children a fiscal and policy priority. At the same time,
without similar federal leadership and incentives, parent
access to Medicaid has languished. In Maryland, a parent who
makes a little more than $500 a month-less than half of the
poverty level-earns too much money to qualify for Medicaid.
Another example exists in the area of child care. Maryland
has made modest inroads in increasing access to child care.
However, all of this has been done with federal funds. Without
cost-sharing incentives, the state has invested no new funding
in child care. As a result, a single parent with two children
in day care and who earns a little more than $25,000 per year
is ineligible for any child care assistance.
A final example is in the area of child support pass-
throughs. When federal cost sharing stopped with passage of the
welfare law in 1996, 27 states, including Maryland, ended their
child support pass-throughs.
There are many advantages to state flexibility and the
creation of block grants. However, the importance of federal
leadership and incentives to states cannot be understated.
The remainder of my testimony provides information on how
Maryland responded to welfare reform, and how Maryland is
meeting its Maintenance of Effort requirement amid the dramatic
caseload declines.
Initial Responses to the Personal Responsibility and Work
Opportunity Act of 1996
In addition to complying with the work-focused approach of
the federal law, Maryland reacted to the Personal
Responsibility and Work Opportunity Act of 1996 by enacting
several policy changes in its welfare program. Some of these
are described below.
Changes in earnings disregards: Earnings disregards were
simplified. If you recall, under prior federal law the first
$120 of earnings and one-third of the remainder were
disregarded for the first four months of earnings; the first
$120 of earnings were disregarded in the fifth through twelfth
month of earnings; and, the first $90 of earnings were
disregarded thereafter. Many had complained that the time-
limited nature of disregard policies were confusing and
discourage work.
Maryland changed its disregard policy such that 20 percent
of earnings were disregarded for determining program
eligibility, and 26 percent of earnings were disregarded for
recipients. This 26 percent disregard was increased to 35
percent in 1999. In 1999, legislators also took advantage of
the flexibility allowed under federal law and removed from the
federal 60-month time limit those families who are working.
As a result of the current disregard policy, a family of
three must earn below $520 in a month in order to become
eligible for cash assistance. Recipients who earn more than
$650 in a month are ineligible for assistance. To give you some
perspective, this ranks 41st among the 50 states in earnings
level before eligibility ends.
Cost Saving Measures: Initially, there was concern that the
federal block grant and new federal cost sharing arrangement
would not provide the state with enough money to meet cash
assistance needs. As a result, changes were adopted to reduce
cash assistance payments:
Child Support: Maryland repealed the $50 pass-through in child
support. As a result, none of the child support that is
collected on behalf of families receiving cash assistance is
passed on to the families for whom it is collected.
Delayed Eligibility: New applicants, and families who re-enroll
in the program, receive a reduced benefit in the first month of
program eligibility. Under this policy that delays program
eligibility until 15 days after the date of application, the
maximum first-month benefit for a family of three is reduced to
$222-an amount that would be less than 20 percent of the
federal poverty level.
Housing Assistance is Counted as Unearned Income: Families who
receive section 8 and public housing assistance have their
benefits reduced by $60 per month.
All of these policies were implemented to save money when
shortfalls were projected in state and federal funding for
welfare. To this date, despite a caseload decline of two-thirds
and ample federal and state funds, these policies remain in
effect.
Indexing Benefits Cash assistance benefits are adjusted
annually so that their value is no longer eroded by inflation.
In 2000, maximum benefits in Maryland for a family of three are
$417 per month, an amount roughly equal to one-third of the
federal poverty level. However, the indexing that began in 1997
does not make up for benefit cuts that occurred in the early
90s. Between 1990 and 1997, benefit cuts and inflation reduced
the value of cash assistance benefit by more than 25 percent.
Meeting Maintenance of Effort
One of the more challenging aspects of understanding state
policy choices under welfare reform is following the money-both
state and federal funds. In fact, tracking the funds can be so
complicated that you may wish your General Accounting Office to
examine how states are meeting the maintenance of effort
requirement amid the caseload declines that have been
experienced.
Maryland's TANF block grant is $229.1 million per year.
Maryland's maintenance of effort level is based on pre-reform
state spending of $236 million per year. Combining federal and
state funds, pre-reform spending on welfare and related
programs was $465 million per year.
However, total spending on cash assistance has fallen by
nearly two-thirds-from $296 million in 1996 to a projected $104
million for the upcoming fiscal year. Still, Maryland does not
have a significant surplus of unspent TANF funds, and the
apparent lack of state funds continues to be a barrier to
program enhancements. Where has the money gone, and how is the
state meeting its MOE requirements?
In a hearing before the Senate Budget and Tax Committee
last week, Department of Human Resources officials assured
committee members that they had scoured the state budget to
find every possible spending item that could help the state
meet its MOE requirement without necessitating an actual
increase in spending. Existing spending that is proposed to
count as MOE includes the state's refundable earned income
credit, education grants to high poverty areas, and after
school programs.
Two relatively small items may be indicators of the state's
aggressiveness in identifying spending to meet MOE. In both
cases, items may be counted as MOE, even if state funds are not
involved.
In 1999, Montgomery County, Maryland enacted a
local refundable earned income credit, to be financed with
county funds. Under current regulations, these county funds may
be counted as state Maintenance of Effort funds., and state
fiscal analysts have suggested that state do so.
In 1999, as part of electric utility deregulation,
a surcharge on commercial and residential utility rates was
applied to create a universal service program for low-income
consumers. Some of these funds are likely to be counted as
maintenance of effort funds.
All together, nearly $100 million of non-welfare funds have
been found to count toward the state's MOE limit for the
upcoming fiscal year. These funds offset the $100 million
reduction in state funds from areas considered to be
traditional welfare spending.
It is my understanding that some are calling for reductions
in the MOE spending requirements. I believe that policy choices
made in Maryland indicate that the opposite is needed. MOE
requirements should be tightened to ensure that states maintain
spending for lower-income families. For example, at the very
least, MOE should be limited to state general funds.
Summary
While many families have left welfare, their
earnings remain very low, and their need for ongoing assistance
such as child care, health care, and income support continue.
Despite an abundance of funds, significant
enhancements in state safety nets have remained outside of
state budget priorities. This suggests the need for federal
leadership to stimulate state investments in lower income
families.
Despite the maintenance of effort requirements in
federal law, Maryland has taken advantage of caseload
reductions to invest in the well-being of families. Rather, the
state has scoured the budget to find as many existing items as
possible that can count under MOE, thus avoiding the need to
actually maintain or increase spending. This suggests the need
for tighter federal rules on how Maintenance of Effort funds
can be spent.
Mr. Cardin. Dr. Born.
STATEMENT OF CATHERINE E. BORN, PH.D., PROFESSOR, SCHOOL OF
SOCIAL WORK, UNIVERSITY OF MARYLAND AT BALTIMORE
Ms. Born. Thank you.
Madam Chair, Mr. Cardin, and Mr. English, I have been doing
welfare research in Maryland in partnership with our State
agency and our general assembly for about 20 years, and this is
my first opportunity to appear before a congressional
Committee, and I have to tell you, it is a big thrill. I am
delighted that you are holding this hearing in Maryland. I
think you realize that we have made a true bipartisan effort
and have had some real accomplishments here in welfare reform
even though we have not gotten the national attention that some
other States have.
It is fitting that we are here in Baltimore City as well,
because I think in this city and other urban centers is where
many of the key challenges we now face will be played out in
the next few years.
We have a bipartisan effort here in Maryland. We don't
always agree about everything. Mr. Bartolomei-Hill has a
slightly different interpretation of some of our research
findings than I do. It may be a perception--matter of the glass
being half empty or half full.
I would like to talk about my perspective on successes and
challenges as they have emerged through our one research study,
Life After Welfare, which is the first leaver study to be
released in the country. I have been told and I believe it is
indeed one of the best and one of the biggest. It is not the
only study that we are doing, and I think that is important to
note. We are studying welfare stayers, people who are coming on
now for the first time, special populations, how welfare and
housing subsidies interact. We have one of the most
comprehensive State-level research agendas in the country, and
I think our elected and appointed officials deserve credit for
taking the risk to subject what our State has been doing to
public scrutiny. I applaud them for that, not just for the
money that they give me to do the studies.
Very quickly, I think that the successes in Maryland are
families are leaving welfare voluntarily, not because they have
been sanctioned. Sanctioned cases represent 10 percent or fewer
of all case closures. Families are not being forced to put
their children into foster care, an outcome I think that was
not desired by anybody when this national debate was going on.
Children are not coming into foster care as a result of welfare
reform. Families are not coming back on welfare either.
Recidivism, as the Chairman noted, is fairly low, but it is
a phenomenon that we need to worry about. The recidivism that
we have seen in Maryland happens in the first few months after
families leave welfare, which I think suggests a challenge. I
am not sure we have figured out exactly how to cope with it.
However, we have to make sure that postexit services are
available for families immediately upon leaving, because those
first 3 to 6 months are critical if they are to remain off the
rolls.
The majority of exiting adults do find employment after
they leave welfare. Two-thirds work after leaving welfare. That
is based on our review of the unemployment insurance database
for the State of Maryland. Half of all exiting adults work in
the first quarter after they leave welfare, and work effort
does persist over time. This is not a short-lived phenomenon.
Half of all of the exiting adults work in every single quarter
up to nine quarters postexit. They may work longer than that,
but that is as far as our data go at this point in time.
I think the bottom line is simply this: Families are
leaving welfare voluntarily in Maryland. They are keeping their
families together. They are finding employment in unemployment
insurance-covered jobs in the State. They are keeping their
families together. We have won the first welfare reform
battles, I think, rather clearly and convincingly in this
State, but we are far from winning the war. We are not finished
yet. That is part of why you are here.
Some of the challenges do relate to the fact that when
people leave welfare, they tend to find jobs. Those jobs happen
to be in the industries that are growth industries, wholesale
and retail trade, nursing homes, hospitals and that, but they
tend not to make very high initial earnings, $2,400-$2,500 a
quarter. There is a trend toward wage growth over time, but no
one would conclude that most of these adults are immediately
lifted out of poverty by their own earnings. We do need to
think about what we can do to help people move up the earnings
and employment ladder.
The challenges. One of them is the researcher's challenge
that I think is really relevant to policy. We need more data.
All I can talk to you about in terms of tracking our families
is people who found jobs in Maryland that are covered by the
unemployment insurance program. I looked quickly at the 1990
census data. Forty-four percent of the adults in Prince
George's County who work, work outside of the State; 32 percent
of the working adults in Montgomery County work outside of the
State; 38 percent of working adults in Cecil County work
outside of the State. If we really want to know what happens to
families and be able to answer your questions thoroughly, you
need to help us get reasonable access to the unemployment
insurance databases of other States.
I have been told by a Federal agency that shall remain
nameless that individual States should call Mr. So-and-so at
the U.S. Department of Labor, and he could help us figure this
out. That is no way to run a railroad or to access this type of
important tracking data. Those data need to be protected from
misuse, and confidentiality is a concern, but I believe we need
your help to get that data available to States.
One other database that is critical is the expanded Federal
Parent Locator Service. That can help us answer a critically
important question that no one has really addressed, and that
is the role of child support in families' postexit lives. Is
this a reliable source of income? Are we doing everything that
we can to collect support for families once they have left
assistance? That databases has all kinds of State employment
information in it as well as Federal employment. At least in
Maryland we really would like to answer all of these questions
about what happens to families as honestly and thoroughly as we
can, but we do need your help in accessing additional data to
do that. Thank you.
Mr. Cardin. Thank you very much.
[The prepared statement follows:]
Statement of Catherine E. Born, Ph.D., Professor, School of Social
Work, University of Maryland at Baltimore
Introduction
Good morning. My name is Catherine Born. I am a faculty member at
the University of Maryland School of Social Work, where I am proud to
lead an inter-disciplinary team of social science researchers engaged
in a number of policy-relevant and often cutting-edge research projects
in the area of welfare reform, broadly defined. On behalf of myself and
my research team, I am extremely honored, Madam Chair, Vice-Chairman
Cardin and members of the Committee, to have been invited to appear
before you this morning to talk about what our research suggests some
of the successes and challenges have been during the first three years
of this new welfare era.
I am also extremely pleased that you are holding this field hearing
here in my home state. Maryland's reform efforts and accomplishments
have not gotten anywhere near the national attention that some states'
programs have received. Yet, while the national spotlight was shining
elsewhere, we were quietly and competently and in true bi-partisan
fashion going about the very important business of crafting a welfare
reform program for our state and its people. As I trust you will
conclude from the testimony submitted and heard here today, we have
done an excellent job. In addition, I believe our elected and appointed
officials deserve considerable credit for taking the risk of subjecting
their new welfare programs to independent research scrutiny. As I'm
sure you know, there are now a number of ``welfare leavers'' studies
afoot in the land; Maryland was the very first state in the nation to
commission such a study and -to this day -our study is one of the
largest, longest and best of its kind.
Maryland's Welfare Research Program
For over 20 years the University of Maryland School of Social Work
and the Maryland Department of Human Resources have partnered in the
conduct of policy-relevant research on Maryland's welfare programs; in
fact, School of Social Work research provides the empirical backbone
for Maryland's approach to welfare reform. Through partnership
projects, Maryland has become a national leader in both welfare policy
and welfare research. Currently, the School is carrying out three
programs of research each consisting of multiple projects:
Life After Welfare--This program began with a large, on-
going, multi-year study of welfare leavers. The study began in the
first month of welfare reform in Maryland, October 1996 and the first
report was issued in March 1997, one of the first in the nation
released in the post-PRWORA era. Four interim reports have been issued
to date reporting on employment, recidivism, and child welfare
outcomes. More detailed analyses of special populations are also
conducted including, to our knowledge, the first study of the
circumstances and outcomes of sanctioned families, released in November
1999. Notably, separate analyses of employment stability, wages and
wage growth by industry are also underway as is a study of the role of
child support in families' post-TANF lives.
Life On Welfare--This series focuses on welfare-stayers
and welfare-newcomers since TANF and state-level reform. Among the
projects are: 1) a quantitative and qualitative look at one county's
entire on-welfare caseload in the 18th month of reform; 2) a multi-year
study of first-time entrants to cash assistance in the summer of 1999
utilizing both administrative and survey data; and 3) an in-depth
comparison of the on-welfare caseload at two time points to see if the
prediction that caseload decline leaves a higher proportion of hard-to-
serve clients on assistance is accurate.
Setting the Baselin--This series consists of focused
analyses of historical administrative data to provide baseline measures
of phenomena such as cash assistance recidivism and foster care entries
among children whose families have left welfare.
Together these research efforts provide state and local
policymakers with important data on how welfare reform is affecting
Maryland families and any mid-course corrections that might be needed.
They also enable us to identify successes achieved to date and
important challenges which remain. The remaining pages highlight some
of these successes and challenges.
Success:
Maryland's caseload decline is not due to the imposition of
full family sanctions
In the first three years of reform, just about one
in ten (11%) cases in our Life After Welfare sample exited cash
assistance because of a full family sanction.
Though still low, the percent of work sanctions
has increased over time (from 3.5% in the first six months to
11.2% in the most recent six months). The percent of child
support sanctions has remained very low at less than 2%.
Compared to non-sanctioned welfare leavers,
sanctioned payees are younger, began having children at earlier
ages, are more likely to be Caucasian, and are less likely to
have worked, pre-exit, in a Maryland UI-covered job.
[GRAPHIC] [TIFF OMITTED] T7486.001
Success:
The majority of sanctioned families either return to welfare or
become employed in the first few months.
Sanctioned adults are less likely (31.1%) than
others (56.1%) to work in the quarter in which they leave
welfare and, among those who did work during this period, mean
quarterly earnings of sanctioned adults are significantly lower
($1,741.57) than among those who were not sanctioned
($2,344.41). Although the proportion of sanctioned adults
working in UI-covered jobs increases, the same pattern prevails
in the quarter after welfare case closure: 38.4% of sanctioned
payees are working compared to 55.7% of non-sanctioned payees.
Within the first 90 days after case closure,
sanctioned families are much more likely to come back on
welfare than are other families; almost twice as many
sanctioned families (35.2%) as non-sanctioned families (18.4%)
came back on welfare in three months or less.
As these data illustrate, two outcomes are most
prevalent among sanctioned payees: the majority either seek and
find employment immediately after case closure or come into
compliance and return to cash assistance. Of the remainder, the
vast majority continue to receive Food Stamps and/or Medical
Assistance. Others move out of state or appear to have other
sources of support; in no cases, however, did families totally
disappear from view.
[GRAPHIC] [TIFF OMITTED] T7486.002
Success:
Considering all welfare leavers, most former payees become
employed.
Excluding those who come back on welfare right
away (i.e., within 30 days), two of every three payees (66.6%,
n = 3,082/4,625) worked in a UI-covered job in Maryland after
leaving welfare.\1\
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\1\ All earnings figures refer only to wages earned in a UI-covered
job in Maryland by the adult who formerly headed the TCA case. Other
types of income, earned or unearned, received by this person and any
and all wages/income received by other persons in the household are not
included. Thus, these figures do not necessarily equate to total income
for the payee or family.
---------------------------------------------------------------------------
Excluding those who return to welfare right away,
about half (50.4% or n = 2,330/4,625) of former payees worked
in UI-covered employment in Maryland in the first quarter post-
exit.\2\ Among those with history of UI-covered employment
prior to their TCA exit, nearly two-thirds (64.1%, n = 1,997/
3,118) worked in such a job in the first quarter after leaving
welfare.
---------------------------------------------------------------------------
\2\ Excluding child-only cases (where the adult casehead was not on
the welfare grant), this figure increases slightly to 52.5%.
[GRAPHIC] [TIFF OMITTED] T7486.003
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Success:
Work effort persists over time.
The statewide pattern of roughly one out of two
adults working in UI-covered employment in Maryland continues
in the 2nd through 9th quarters post-exit. That is, in each
subsequent quarter, about half of all former payees are
employed in a job covered by the state's Unemployment Insurance
system.
Those with a pre-exit wage history have noticeably
higher rates of post-exit employment: roughly three-fifths of
these clients are working in each of the 2nd through 9th
quarters after they exited from welfare.
In the first post-exit quarter, median quarterly
UI-covered earnings are $2,100 for all cases.\3\ The trend in
quarterly earnings is a slight upward one over the 2nd through
9th post-exit quarters such that, for all cases, median
earnings are $2,556 by the 9th quarter after the welfare case
closed.
---------------------------------------------------------------------------
\3\ All earnings figures refer only to wages earned in a UI-covered
job in Maryland by the adult who formerly headed the TCA case. The
figures are a total for the quarter and cannot be reduced to hourly
figures. Other types of income, earned or unearned, received by this
person and any and all wages/income received by other persons in the
household are not included. Thus, these figures do not necessarily
equate to total income for the payee or family.
---------------------------------------------------------------------------
For many former clients, work effort and UI-
covered employment do persist over time: 1,493 of 2,905 (51.4%)
exiters in the 10/96 -3/98 sample worked in the first quarter
after exit. Of the 1,493 exiters with work experience in the
first quarter after exit, the percent working in subsequent
quarters ranges from 83.0% in the second quarter after exit to
72.7% in the fourth quarter after exit. This finding suggests
that first quarter working exiters maintain employment at a
fairly high level in subsequent quarters.
The most frequent employer types for adults
working in the first quarter after their TCA exits are:
Wholesale and Retail Trade -34.2%
Personal/Business Services -24.1%
Organizational Services -20.3%
Together, these three industries account for 78.6%
of the employers.
Success:
The majority of welfare leavers do not return to welfare in the
first two years.
Seven out of ten adults (69.8%), who exited TCA in
the first six months of welfare reform stayed off welfare for
two full years.
About one in five families (19.4%) returned to TCA
within 3 months of exiting.
The recidivism rate increases slightly over the
next 9 months reaching 25.4% at the 12 month follow up point.
Churners, who return to welfare within 30 days,
account for a large portion of recidivism.
Excluding churners, the recidivism rates are 8.9%
at 3 months, 13.8% at 6 months, 18.5% at 12 months, 23.1% at 18
months and 25.8% at 24 months.
[GRAPHIC] [TIFF OMITTED] T7486.004
Success:
Children are not coming into foster care as a result of
families leaving cash assistance.
Children in families which leave welfare do not
appear to be at increased risk of foster care placement.
Placements that do occur tend to happen in the first few months
after the family exits cash assistance; the case narratives
lead us to suspect that in at least some of these cases, the
foster care placement preceded and indeed prompted the TCA case
closure.
We find that 158 of 9,677 (1.6%) children had a
history of Intensive Family Services prior to the welfare exit
that brought them into our sample. In the first three post-exit
months, 18 children out of 9,677 (0.2%) children received
Intensive Family Services. The number increases over the next
nine months reaching a high of 44 out of 5560 children (0.8%)
at the twelfth post-exit month.
Among all the children in our sample, 30 (0.3%)
had a history of kinship care and 198 (2.0%) had a history of
foster care placement. Far fewer children enter foster or
kinship care in the months following their families' departure
from the welfare rolls. At the three month follow up point, 13
of our 9,677 children (0.1%) had entered foster care and none
had entered kinship care. By the sixth post-exit month two
children had entered kinship care and 22 were in foster care.
At the one year follow up point, less than one-tenth of one
percent of children had entered kinship care and four-tenths of
one percent had been placed in foster care.
Challenges As We Go Forward
Welfare reform in Maryland has been and remains a truly bi-
partisan effort based on empirical data and the hard work of
many persons. Our reform program has been conscientiously
implemented by state and local welfare agency officials and
carefully overseen by elected officials and it has involved
numerous community partners. Also since day one, we have made
serious and sophisticated efforts to monitor outcomes through
research and to use research results to improve program
operations. Despite these commendable traits and the documented
successes we have achieved, many important challenges remain in
our state and across the nation. A few of the more important of
these include:
Increase participation of former welfare recipient
families and the working poor, more generally, in programs such
as Medical Assistance (MA) and Food Stamps (FS) and take steps
to reframe and market these programs as family supports, not
``welfare.'' Take-up rates in MA and FS, as well as child care
and possibly child support have been lower than expected among
former TANF families and have been chronically lower among the
working poor than among other groups. This situation continues
despite expanded eligibility and/or relaxing of certain program
rules. Such services are critical supports for newly-employed
former welfare recipients and, indeed, for the much larger
population of working poor families. Our challenges here
include: document reasons for these disturbing trends;
experiment with creative methods of outreach, education and
service delivery/application venues and strategies; make
certain all welfare and other community agencies' staff are
aware of new rules. Perhaps a widespread, generic public
education campaign (posters on busses, libraries, etc.) might
be useful.
Reform Food Stamps! Some positive changes have
recently been made, but more wholesale review and reform of
this critically important program is sorely needed. In the
absence of wholesale reform, expanded waiver authority is
imperative.
Devise and reward regional approaches. Caseload
decreases in many urban centers have not kept pace with
declines in other areas such that, reversing pre-TANF trends,
welfare caseloads are now increasingly concentrated in large
cities. Job opportunities, however, lie elsewhere. Addressing
this mismatch in other than band-aid fashion requires cross-
jurisdiction collaboration and attention to myriad issues in
the areas of welfare, housing, transportation, safety, child
care and more.
Time is running out. In less than two years, the
first wave of TANF recipient adults will potentially hit the
federal five year lifetime time limit. While there was much
discussion about this time limit at the outset of reform, we
have seen little data to estimate the magnitude of this coming
crash, state contingency plans, and the like. The challenge now
is to begin to take a close look at the needs and TANF use
patterns of current customers, to develop strategies to prevent
families from reaching the limit, and to plan for how we will
deal with those who despite all efforts hit the five year mark.
Although recidivism has been relatively low, it
still occurs for 3 out of 10 families. Recidivism did not
matter in a practical sense under the old system so little is
known about why families return to welfare. Today, returns to
welfare mean a family is closer to the lifetime limit. Our data
make it clear that the first few months after exiting cash
assistance are a critical period for families in which risk of
returning to welfare is highest. Policymakers and program
managers must continue to make concerted efforts to assist
families in maintaining their independence from cash assistance
in these first critical months. In addition, few researchers
have examined recidivism under TANF in any great detail; more
need to do so.
Welfare caseloads have changed In some counties,
the typical welfare family no longer consists of a mother and
one or two children, but instead is comprised of a grandmother
or other relative and several dependent children. Welfare
program rules for such families vary across states, but in
general we know very little about these types of families -
their characteristics, special needs, long-term prospects, etc.
In addition to research, policy attention must be paid to how
TANF features such as time limits, exemption policies and
thresholds, work requirements, etc. affect these families and
vice-versa.
More data are needed The list of questions
addressed in welfare reform research studies needs to be
broadened to include studies of special populations (sanctioned
families, caretaker relative families, new TANF entrants,
recidivists, etc.). States and their research partners also
need federal assistance in obtaining access to data that will
permit more thorough answers to questions already under study
(e.g., employment outcomes for welfare leavers). Maryland
shares borders with four other states and the District of
Columbia; our lack of access to other states' data on UI-
covered employment and wages is the single most important
barrier to our ability to more comprehensively document former
recipients' employment, wages and financial well-being.
Another extremely rich, unique, invaluable and relatively
inexpensive-to-use source of important program monitoring/
client outcome data is FPLS. These data could be used not only
to assess the ability of non-custodial parents to pay child
support, but also to enrich our understanding of the employment
patterns of former TANF recipients. Easier access to this data
would eliminate many of the problems with tracking cross state
employment. Based on our experience and knowledge,
Congressional leadership will likely be needed to facilitate
access to these data, but also to insure that the data are not
misused and that confidentiality concerns are adequately
addressed.
There are many other specific challenges, in addition to
those just listed. However, when all is said and done, I
believe the biggest challenge we face is simply to finish the
job that we started just a few years ago. I for one, share the
view expressed by Isabel Sawhill in a recent issue of the
Brookings Review.
``Ending poverty as we know it is not an impossible dream. By
combining requirements that adults work with adequate supports
for those that do, and assuming reasonably good labor markets,
it should be feasible to reduce poverty and hardship to minimal
levels at a cost that is well within reach. The most pressing
needs are child care subsidies and health care insurance for
adults who now lack such coverage. In the long run,
improvements in education and more intact families are the best
insurance against poverty. But in the interim, work remains the
most powerful antidote to poverty and social exclusion. The new
supports for the working poor enacted on a bipartisan basis
over the past several decades are a huge step forward. We
should now finish the job...'' \4\
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\4\ Sawhill, I., (1999). From Welfare to Work: Toward a New
Antipoverty Agenda. Brookings Review, Fall 1999, p. 27-30.
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With the continued strong leadership of your subcommittee,
I believe we can indeed ``finish the job.'' Thank you very
much, I would be pleased to answer any questions you might
have.
Mr. Cardin. Dr. Carlson-Thies.
STATEMENT OF STANLEY W. CARLSON-THIES, DIRECTOR, SOCIAL POLICY
STUDIES, CENTER FOR PUBLIC JUSTICE, ANNAPOLIS, MARYLAND
Mr. Carlson-Thies. Thank you, Madam Chair, Congressman
Cardin and Congressman English. The Center for Public Justice
is a national, nonpartisan, faith-based organization, a think
tank, headquartered in Annapolis. My focus is Maryland
welfare's collaboration with faith communities. I have been
following this issue since 1995, and I am a member of a special
committee, the Faith Community/Department of Human Resources
Partnership Council, which has been established by the
department as a bridge to the faith communities.
It seems to me the logic of welfare reform requires
collaboration. How can public welfare help people get off
welfare and stay off unless it works not only with business,
but also with the many social organizations that provide not
just training, but also encouragement and guidance? Congress
pressed collaboration further by adopting the Charitable Choice
provision requiring States to open welfare procurement to
competition by all kinds of religious groups, to honor the
faith characteristics of religious organizations that accept
public funds, and to protect the rights of welfare recipients
who get services from such organizations. Maryland has made
collaboration with the faith communities ones of its welfare
reform goals, and I think it can show considerable success.
I salute the department for its initiatives, but the faith
communities remain largely on the sidelines. I think more
vigorous State action is needed. Maryland's collaboration
initiatives predate the 1996 Federal welfare law, and since
then the Department of Human Resources has continued its
initiatives, including that partnership council, clergy
conferences, and changing the welfare statutes in response to
Charitable Choice. I note three significant fruits of all of
this.
First of all, the Community-Directed Assistance Program, a