[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
FIRST SESSION
__________
NOVEMBER 15, 1999
Erie, Pennsylvania
__________
Serial 106-47
__________
Printed for the use of the Committee on Ways and Means
_______________________________________________________________________
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC
20402
U.S. GOVERNMENT PRINTING OFFICE
65-693 CC WASHINGTON : 2000
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
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
version. Because electronic submissions are used to prepare both
printed and electronic versions of the hearing record, the process of
converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
Page
Advisory of November 8, 1999, announcing the hearing............. 2
WITNESSES
Gamble, Thomas J., Mercyhurst College Civic Institute, and
Mercyhurst Center for Child and Family Policy.................. 51
Greater Erie Community Action Committee, R. Benjamin Wiley....... 45
Mercer County Community Action Committee, Gary A. Cervone........ 55
McDonald's, Karen L. Bechtold.................................... 57
Pennsylvania Department of Public Welfare, Hon. Feather O.
Houstoun, Secretary............................................ 33
WELFARE REFORM
----------
MONDAY, NOVEMBER 15, 1999
House of Representatives,
Committee on Ways and Means,
Subcommittee on Human Resources,
Washington, DC.
The Subcommittee met, pursuant to call, at 12:10 p.m., Erie
City Council Chambers, 626 State Street, Erie, Pennsylvania,
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
FOR IMMEDIATE RELEASE CONTACT: (202) 225-1025
November 8, 1999
No. HR-12
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, November 15, 1999, in the Erie City
Council Chambers, 626 State Street, Erie, Pennsylvania, beginning at
12:00 noon.
Oral testimony at this hearing will be from invited witnesses only.
Witnesses will include the Secretary of the Pennsylvania Department of
Welfare as well as local program administrators, scholars, and
employers. 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 a continuation of a series of field hearings across
the country on welfare reform. The Subcommittee is expected to conduct
additional hearings in other locations.
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. This information will build a public record on
differences and similarities in how welfare reform is being conducted
and the effects it is having in selected States and counties around the
nation.
In announcing the hearing, Chairman Johnson stated: ``The 1996
welfare reform law is one of the most imporatnt reforms of American
social policy in recent decades. Our Subcommittee has been conducting
hearings ever since the legislation was enacted to show the deep and
continuing interest of Congress in how the legislation is being
implemented, educating our Members on the effects the legislation is
having, and building a strong public record on the legislation. Field
hearings give the Subcommittee a chance to visit sites where the
reforms are being implemented and to meet and hear from those who are
actually doing the most important work in attacking welfare
dependency.''
FOCUS OF THE HEARING:
The Subcommittee expects to learn details about the welfare reform
programs being conducted in both the State of Pennsylvania and in Erie
County. Witnesses are also expected to describe specific impacts of the
Pennsylvania programs on families, welfare dependency, employment, and
communities.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Any person or organization wishing to submit a written statement
for the printed record of the hearing should submit six (6) single-
spaced copies of their statement, along with an IBM compatible 3.5-inch
diskette in WordPerfect 5.1 format, with their name, address, and
hearing date noted on a label, by the close of business, Monday,
November 29, 1999, 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.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a
witness, any written statement or exhibit submitted for the printed
record or any written comments in response to a request for written
comments must conform to the guidelines listed below. Any statement or
exhibit not in compliance with these guidelines will not be printed,
but will be maintained in the Committee files for review and use by the
Committee.
1. All statements and any accompanying exhibits for printing must
be submitted on an IBM compatible 3.5-inch diskette WordPerfect 5.1
format, typed in single space and may not exceed a total of 10 pages
including attachments. Witnesses are advised that the Committee will
rely on electronic submissions for printing the official hearing
record.
2. Copies of whole documents submitted as exhibit material will not
be accepted for printing. Instead, exhibit material should be
referenced and quoted or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee files for
review and use by the Committee.
3. A witness appearing at a public hearing, or submitting a
statement for the record of a public hearing, or submitting written
comments in response to a published request for comments by the
Committee, must include on his statement or submission a list of all
clients, persons, or organizations on whose behalf the witness appears.
4. A supplemental sheet must accompany each statement listing the
name, company, address, telephone and fax numbers where the witness or
the designated representative may be reached. This supplemental sheet
will not be included in the printed record.
The above restrictions and limitations apply only to material being
submitted for printing. Statements and exhibits or supplementary
material submitted solely for distribution to the Members, the press
and the public during the course of a public hearing may be submitted
in other forms.
Note: All Committee advisories and news releases are available on
the World Wide Web at `HTTP://WWW.WAYSANDMEANS.HOUSE.GOV'.
The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four
business days notice is requested). Questions with regard to special
accommodation needs in general (including availability of Committee
materials in alternative formats) may be directed to the Committee as
noted above.
Chairman Johnson. We are here this afternoon to bring this
hearing of the Human Resources Subcommittee of the Ways and
Means Committee of the United States Congress to order in the
City of Erie, Pennsylvania.
It's a pleasure to be here. We had a very productive visit
so far and very much appreciate the input we received this
morning from Mrs. Josephine Johnson and her able staff and the
variety of departmental people that are responsible for
implementing the Welfare Reform bill, and also from two of the
recipients who have done a remarkable job of getting themselves
into the work force and managing their family affairs in a way
that's going to be promising for the future.
I'm Nancy Johnson. I represent the sixth district of
Connecticut. I chair the Human Resources Subcommittee and I'm
very pleased to be here today, and very pleased that my
colleague and friend, Bill Coyne could join us. We served
together for many years on different committees and it's a
pleasure to have him here today. And, of course, I'm very
pleased to be here in the center, I guess, of my colleague
Congressman Phil English's district. Phil is the ranking
Republican on the Ways and Means Human Resources Subcommittee
and helps me with a great number of issues and with running the
business of the Committee.
We are, as you may know, the Subcommittee responsible for
having written the Welfare Reform bill and for the oversight of
its implementation, which means that we've been holding
hearings on each section of that bill, that may have many
different aspects to it, to see how, in fact, it is working out
there in service to people. That's what self-government is all
about. We make the laws and it's our obligation to see how are
they working and what is it that we need to learn from the
people affected about how to improve the law or what the next
step is. So I'm very pleased to report that I believe that the
national information is very positive about how well the reform
is working, but it is very clear that we have a next step.
We have new challenges to meet. And it is through hearings
like this across the country and in Washington that we are
refining our understanding of the new challenges ahead so that
we can shape the law and assure that they use only the
resources that are necessary. To not only assure that when you
need a hand, you get a hand but that that hand is a hand up to
a brighter and more fulfilling future for parents and for their
children. So this is a very important hearing in the work of
the Committee.
It's very important that we were able to pass on the floor
of the House last week a fatherhood bill that will reach out to
some of the fathers of the children on welfare to offer the
same kinds of resources that we have been extending to women on
welfare.
So I think as we move through building an empowering
network of services and a national policy subsidizing work as
opposed to non-work, that we will be able to fulfill the
fundamental promise of freedom, which is opportunity. And
that's what we're here about today.
We want to see how much opportunity has been created for
welfare recipients and their children and how we can do a
better job to assure that they not only can move out but move
up.
And so I'd like to yield the leadership of this hearing to
my valued colleague, Congressman English, and thank him for his
work on the Subcommittee and for the opportunity that we're
having today to hear first hand from people in Erie and the
surrounding areas as to what's working and what needs work.
Thank you, Phil.
Mr. English. Thank you, Madam Chair. I want to thank you
for bringing the Subcommittee to Erie for what we think will be
a very productive and insightful hearing. When I looked at our
role as the Subcommittee in oversight responsibility for
welfare reform it struck me that an excellent place to begin
would be Erie, Pennsylvania, my hometown, a community with real
needs but also one with a tradition of superb social services
at the local level. If welfare reform is going to work, it
needs to work here. And this is a good starting place for us to
assess what has happened at the Federal level.
I want to also thank Mrs. Johnson for personally coming
from Connecticut to participate in this hearing and my
colleague, Mr. Coyne, for coming up from Pittsburgh. Bill Coyne
has served with me on Ways and Means in the 6 years since I
came to Congress. He has been a superb advocate of western
Pennsylvania and I think will offer important and balanced
views here as part of this hearing. We are all here primarily
though to listen.
The Committee on Ways and Means played the central role in
writing and passing the seminal 1996 Welfare Reform Law.
Although we are exceptionally proud of that law, we are well
aware that laws are only as good as their implementation. For
that reason we've been holding an extensive set of oversight
hearings in Washington and we're in the midst of a series of
field hearings to learn about how the law is being implemented
around the country. Previously we've conducted field hearings
in Arizona and in New Mexico. In the next several months, we
plan to conduct hearings in Florida and in Maryland.
Both our hearings in Washington and our field hearings have
documented the remarkable successes of welfare reform. The
hearings, as well as scientific evaluation studies, have shown
a few rough spots, and we need to be honest about those. But on
the whole I think almost everyone who follows social policy has
been amazed by the scope of the success of the welfare reform
movement that has swept the country since about 1994. By 1994,
about half the States had been granted waivers to conduct their
own welfare reform programs. Then national legislation based on
flexibility was passed in 1996.
In my opening remarks I want to provide our audience with
some idea of what welfare reform is all about and what our
Committee has learned about its effects on children and on
families. This information, which has been prepared by our
staff, will provide a good backdrop for our attempt to learn
more about welfare reform in Pennsylvania and in Erie County.
If I could I'd like to put up the charts at this point. As
you'll notice from chart 1 we outlined five steps to welfare
transformation. This chart shows the major features of the 1996
Welfare Reform Law. First, end cash entitlement. Under the old
Aid to Families with Dependent Children program, millions of
mothers became dependent on welfare because they were entitled
to the benefits, which means they got the benefits regardless
of whether they tried to work or took constructive action to
help themselves. The entitlement system encouraged dependency
because State and local programs were legally prohibited from
requiring recipients to work or prepare for work.
Block grant funding. The second major feature of welfare
reform was that we began giving States a fixed sum of money
each year rather than more money for each person they put on
welfare and less money for every person that left welfare. The
old system punished States that helped adults leave welfare and
rewarded States that allowed them to stay on welfare. This
fixed funding feature of block grants gives States a greater
incentive to help people leave welfare. After all, if States
receive fixed funding and can help people leave welfare, they
get to keep the money that was previously spent for benefits.
States can then turn around and use this money to help more
people leave welfare.
Work requirements. Of all the attributes of the old welfare
system, the fact that able-bodied adults could receive benefits
year after year and not be required to do anything to prepare
for independence was its single most fatal flaw. Now, however,
States must put a specific percentage of their welfare caseload
into work programs or be fined by the Federal Government. So
far every State has met its work requirements and now around
half the people receiving welfare are working.
Sanctions. Inevitably, a few people will try to take
advantage of the system and avoid meeting their obligation.
Under the previous welfare system, the few people who were
required to prepare for work often ignored the requirement. Any
system, whether the workplace, schools or sports teams, that
allows its members to ignore the rules soon has no rules, or at
least no effective rules. But now States can and actually do
back up their requirements with sanctions. If an adult on
welfare is required to work or prepare for work but does not
meet the requirement, then their benefit is reduced and in many
States even terminated. Sanctions have given an entirely new
tone of seriousness to the Nation's welfare programs.
Five-year time limit. The day people sign up for welfare,
they are told that they have a lifetime total of 5 years of
cash benefits. There is no better or clearer way to emphasize
the temporary nature of welfare than by imposing a time limit
on the amount of time able bodied adults can receive benefits.
This new requirement has brought a great sense of purpose to
both welfare caseworkers and welfare recipients. Simply put,
they must succeed in achieving independence.
These five characteristics of the new welfare system have
been in place in every State since 1996 or 1997, and many of
the features were in place in most States by around 1994. Taken
together, these reforms constitute the most thorough reform of
any major social program in American history. Now let us turn
to an examination of the effects produced by these reforms.
If I can put up chart 2. This gives you a sense of caseload
decline. This chart shows the history of enrollment in the new
Temporary Assistance for Needy Families program, TANF, and in
its predecessor program, AFDC. I want to call your attention to
three features of this graph. First, between the late 1950s and
1994, there is a nearly uninterrupted increase in the rolls.
Notice that there are only a few years in which the caseload
actually declines. Even when the economy is hot and jobs are
plentiful, as was the case in the 1960s and in the 1980s, the
rolls don't go down.
Second, notice the big increase in the late 1980s and early
1990s. No one has a complete explanation for this increase, but
during a period of major economic growth of the early 1990s,
the rolls kept going up until 1994.
Third, and most important, look at the decline after 1994.
Modest at first, but then almost a free fall after we passed
the Federal Reform Law of 1996. We have now reached the point
at which the average State has seen a 50 percent decline in its
rolls. And many States have seen a decline of over 70 percent.
Nothing like this has ever happened in the history of American
social policy.
Now if I could put up chart 3, recalling my comments on the
feature of fixed funding, look at the generous resources States
are now enjoying. Because the welfare rolls have declined while
funding has remained fixed, the States now have almost twice as
much money per family on welfare as they had in 1994. This
money, which can only be spent on children and families, means
that States can maintain their welfare benefit levels and still
have lots of money for child care, transportation, training and
whatever else is required to help the remaining families leave
the rolls. What this chart really shows is that success
promises to lead to even greater success.
If I could put up chart 4. If welfare reform is working, we
should expect to find an increase in employment by mothers,
especially poor mothers. This next chart, in many ways the most
impressive chart of all, shows the dramatic increase in the
number of mothers entering the work force. The top panel shows
the yearly average increase in employment by all single moms.
In the years before 1996, the average increase was about
140,000 per year. But in 1996, the year welfare reform passed,
the increase jumped to 197,000. This impressive increase,
however, pales in comparison with the 1997 increase of 412,000,
by far the largest increase ever.
The bottom panel is equally impressive. This graph shows
the increase in employment by never-married mothers. These
mothers are the poorest on balance, the most likely to go on
welfare, the most likely to stay on welfare for a long time,
and the least likely to work. And yet, between 1993 and 1998,
precisely the period during which welfare reform was being
implemented and the rolls were declining, there was a whopping
40 percent increase in employment by never-married mothers.
There can simply be no question that welfare reform has led to
historic increases in employment, particularly by the mothers
most likely to be poor.
If I could put up chart 5. From the beginning of the
welfare debate, Republicans on the Ways and Means Committee
have argued that welfare has always been a trap that guarantees
that children will be reared in poverty. A huge flaw in the
previous welfare system was that people on welfare could not
escape poverty unless they cheated. The level of benefits
taxpayers were willing to pay simply could not lift a family
out of poverty. But as we will see in a moment, a system that
combines work and wage supplements has tremendous potential for
reducing poverty.
If we were correct in this claim, now that welfare reform
has passed and work by mothers has increased, we should expect
to see a decline in poverty. As this chart shows, that is
exactly what has happened. Overall poverty, child poverty, and
poverty among minority children has declined every year since
1994. In fact, the decline in black child poverty in 1997 was
the biggest decline on record.
Let me put up chart No. 6. This chart shows why poverty
declined so much when mothers went to work. What this chart
demonstrates is that the Nation has had two revolutions. First,
we had the welfare revolution that you read about in the
newspapers and that is so widely known and popular among the
American people.
But second, we had a quieter revolution in the Nation's
work support system, the programs by which taxpayers subsidize
the incomes of families that are trying to help themselves by
working. This lesser known but equally essential work support
system is composed primarily of child care, the Child Health
Insurance Program or CHIP, the child tax credit, Medicaid and
the earned income credit.
As this chart demonstrates so clearly, all of these
programs have either been initiated or expanded dramatically
since 1984. In fact, if we had not passed the legislation that
built the new work support system in 1999, we would now be
spending only $5.6 billion helping these low-income working
families. But because we passed the new work support laws,
mostly on a bipartisan basis, the Nation will actually spend
almost $52 billion helping these deserving families.
That's why we're able, at last, to roll up victories in the
war against poverty. We reformed welfare to encourage or force
able-bodied adults to leave welfare. Then we created a terrific
new work support system to subsidize their income when they
took the low wage jobs that they are qualified for and that are
easily available in the American economy.
Chart No. 7. Take a look at my last chart. This chart shows
the decline in child poverty by a broad Census Bureau
definition that includes income from all the programs in the
work support system I just showed you. In just 4 years, the
child poverty rate has declined from 17.5 percent to 12.9
percent, a 26 percent decline.
How important is this achievement? In 1965 the Nation
decided to fight a war against poverty by creating hundreds of
social programs and giving away billions of dollars in cash and
benefits. Between 1965 and 1995, Federal and State Governments
increased spending on social programs by a factor of 10, from
about $40 billion to nearly $400 billion in constant dollars.
Despite all these new programs and all of the new spending,
the child poverty rate did not decline at all, not at all. So
we threw billions of dollars at poverty and in a sense, poverty
won. The reason is now clear. We were fighting a war using the
wrong weapon. Our main strategy was giving away benefits
without requiring anything in return. Instead of poverty
reduction, we got welfare dependency. Instead of helping people
get back on their feet, we stuck them with a system that
punished work.
But now the Nation has adopted a new strategy. We encourage
and, where necessary, demand work. Then we supplement income
with the growing work support system. As the poverty data in
this chart show, we are having great success so far.
Now, I don't want to leave the impression that we've solved
every problem and there's nothing left to do. The point of this
hearing is that is not the case. There are at least three
problems that our Subcommittee wants to know more about.
First, not enough children are getting Medicaid after their
family leaves welfare. More children are now eligible for
Federal and State health insurance coverage than ever before.
And yet for the first time in a generation, the number of
children actually enrolled in Medicaid is declining. We want to
know why, and under Chairman Johnson's leadership, our
Subcommittee will be exploring this issue in the months ahead.
My own view is that States are already figuring out ways to
solve this problem by simplifying their health insurance
eligibility forms, increasing their outreach to eligible
families, and simplifying their Medicaid requirements for
continuing eligibility.
The second problem is that enrollment in food stamps is
also declining. Frankly, the evidence seems to indicate that
some of this decline is being caused by stigma. Lots of
families want to escape welfare completely and depend only on
themselves and the less stigmatized parts of the work support
system like the earned income credit. So many families seem to
be choosing not to receive food stamps. While admiring these
families for their choice, we should still make sure food
stamps are available to families that really need them.
And finally the evidence indicates that there is a small
group of families at the bottom who are being left behind. They
are leaving welfare but they're not working. We need to know
why they're not working and we need to develop better ways to
help them. As the evidence I have summarized makes clear, there
is a lot of money available to tackle this problem.
Our Subcommittee on Human Resources has come here today to
spread the word that welfare reform is working and that we need
to continue on the path we're on. We are making dramatic
progress against poverty, and we're making it the old-fashioned
way. People are earning their way out of poverty. But we're
also here because we want to know more about the details of
welfare reform in States and localities throughout the Nation.
I am proud that the Subcommittee has decided to visit my
district and learn more about how our professionals and other
citizens are handling welfare reform and offering genuine
innovation. We have, as Chairman Johnson has indicated, already
learned a great deal by visiting the Erie County Assistance
Office, and I expect we'll learn a lot more during this
hearing.
[Charts 1 through 7 follow:]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Mr. English. I would now like to yield to my colleague, Mr.
Coyne, who also has an opening statement.
Mr. Coyne. Well, thank you, Phil, for hosting this hearing
and Chairman Johnson for conducting and agreeing to come to
Erie to hold this very important meeting on a subject that's
very important to many, many people.
I think that it is critically important that Congress
monitor the impact of the Personal Responsibility and Work
Opportunity Reconciliation Act. Since Congress gave the States
a great deal of flexibility in this landmark legislation, we
have a responsibility to look at how welfare reform is being
implemented by different States throughout the country and
determine what effect the bill is having on poor children and
their families. Congress also needs to ensure that the States
are held accountable for using their Federal funding
responsibly and in accordance with the law as it was passed.
For those reasons, it is especially helpful for Members of the
Subcommittee to hold field hearings and hearings in Washington
on this issue across the country.
Today, 3 years after the enactment of the Welfare Reform
Act, we are beginning to get the first real feedback on the
impact of the 1996 bill. On the surface, the bill looks like a
great idea and it looks like it is succeeding. AFDC and TANF
caseloads have dropped by roughly 40 percent nationwide since
welfare reform legislation was enacted. There is other
information, however, that suggests that there is cause for
some concern about this issue. A study by the Center on Budget
and Policy Priorities, for example, concluded that the average
incomes of the poorest single-parent families dropped by more
than $500 between 1995 and 1997. That's a lot of money for a
family getting by on just a few thousand dollars a year.
A recent GAO study done at my request and Congressman
Levin's request determined that much of the drop in food stamp
use was not due to a drop in the need for food stamps. In fact,
food banks are hard pressed to keep up with local need, even
with unemployment at close to 4 percent, a 31-year low. The
General Accounting Office concluded that a significant part of
the drop in food stamp use was due to efforts by State welfare
agencies to place new procedural roadblocks in the way of
families seeking assistance. The GAO also found that many
people who were eligible for food stamps were either not
informed or were misinformed about their eligibility by State
caseworkers throughout the country.
We also have learned that nationally only about 15 percent
of the 10 million children who are eligible for subsidized
child care are being served. Additional congressional action to
provide child care assistance is clearly needed.
Similarly recent studies by the GAO and Families USA
determined that in 1999, fewer children were covered under the
Children's Health Insurance Program and Medicaid than were
covered by Medicaid alone in 1996. The GAO also found that very
few States are doing a good job of providing transitional
Medicaid coverage.
Finally, the Pittsburgh Foundation has been working on a
Health and Human Services welfare reform demonstration project
with the Allegheny County Assistance Office. And its first year
report identifies some gaps in assistance with families making
the transition from welfare to work. I have several copies that
I've given to the staff of that report and I'd like to ask the
report be included at this point in the record for this
hearing.
Mr. English. Without objection.
Mr. Coyne. In closing let me observe that the 1996 Welfare
Reform Act clearly benefited from good timing. The bill was
enacted into law in the midst of the strongest and longest
economic booms of the 20th century. Welfare caseloads were
dropping dramatically across the country even before the 1996
Welfare Reform bill was enacted. Moreover, other recent
congressional action has helped to reduce poverty in this
country and get families off of welfare. Part of the success in
helping poor families become self-sufficient is attributable to
the increases in the minimum wage and expansion of the earned
income tax credit, both of which are worthy of support. The
real challenge for the Welfare Reform Act will come when the
economy slows down, as it inevitably must. Oversight hearings
like this one are essential in order to ensure that children in
this country don't go hungry or homeless, and to ensure that
they receive the medical care and child care that they need and
deserve.
I commend Chairman Johnson and Congressman English for
their interest in this very important matter, and I look
forward to working to help all American families become self-
sufficient and enjoy a decent standard of living. I ask that my
full statement be included in the record.
Mr. English. Without objection. Thank you, Mr. Coyne.
[The prepared statement and an attachment follow:]
Statement of Hon. William J. Coyne, a Representative in Congress from
the State of Pennsylvania
I want to thank Chairman Johnson for holding today's
hearing, and I want to thank my colleague from Pennsylvania,
Congressman English, for hosting this hearing in his district.
I think that it is critically important that Congress
monitor the impact of the Personal Responsibility and Work
Opportunity Reconciliation Act. Since Congress gave the states
a great deal of flexibility in this landmark legislation, we
have a responsibility to look at how welfare reform is being
implemented by different states--and determine what effect the
bill is having on poor children and their families. Congress
needs to ensure that the states are held accountable for using
their federal funding responsibly and in accordance with the
new law. For those reasons, it is especially helpful for
Members of the Subcommittee to hold field hearings on this
issue across the country.
The issue of welfare reform has been the subject of
discussion and debate for many years. Throughout the 1980s and
early 1990s, legislation was introduced to reform the AFDC
program. Congressional committees held dozens of hearings on
the problems with federal welfare programs. But until 1996, no
major changes in the AFDC program were enacted. The reason, of
course, was simple. Year after year, Members of Congress
relearned one apparently unassailable truth--that warehousing
the poor was cheaper than spending the money needed to help
them make a successful transition from welfare dependency to
self-sufficiency.
In fact, even before enactment of the 1996 welfare reform
bill, most of the families that received AFDC stayed in the
program a relatively short period of time and needed little
help becoming self-sufficient. The relatively small percentage
of families that stayed on welfare for long periods of time,
however, not only consumed a disproportionate share of the
federal welfare budget and shaped the public's negative
perceptions about all welfare recipients. They also needed a
lot of help to become self-sufficient. Consequently, year after
year--and in the face of substantial federal deficits--Congress
chose to maintain the status quo rather than invest the
resources necessary to help the long-term welfare recipients
become self-sufficient.
In 1996, however, Congress passed a welfare reform bill,
and President Clinton signed it into law. This legislation, the
Personal Responsibility and Work Opportunity Reconciliation
Act, ended the 60-year entitlement to a subsistence income that
the federal government had provided to poor children and their
parents--and replaced it with a program of block grants to the
states. The bill limited lifetime dependence on welfare to 5
years and required adults on welfare to work after two years of
receiving benefits. Supporters of this legislation believed
that the bill would force parents on welfare to take greater
responsibility for themselves and their families.
Critics of the bill, myself included, disagreed with the
policy of ending the AFDC entitlement. We believed that the
world's wealthiest, most civilized nation could and should
guarantee that all of its children received adequate food,
shelter, and health care. We were concerned that innocent,
vulnerable children would suffer as a result of the enactment
of the Personal Responsibility and Work Opportunity
Reconciliation Act. We were also concerned that the bill failed
to provide the resources necessary for families on welfare to
become self-sufficient. We were especially concerned by the
failure of this legislation to adequately address the issue of
job training. Consequently, I voted against the Personal
Responsibility and Work Opportunity Reconciliation Act.
In 1997, Congress acknowledged some of the shortcomings in
the Personal Responsibility and Work Opportunity Reconciliation
Act. The Balanced Budget Act of 1997 established a $3 billion
program to help adult TANF recipients make the transition from
welfare to work. It also established the State Children's
Health Insurance Program (CHIP) to complement Medicaid and
provide health insurance for low-income children.
Today, three years after the enactment of the Personal
Responsibility and Work Opportunity Reconciliation Act, we are
beginning to get the first real feedback on the impact of the
1996 welfare reform bill. On the surface, the bill looks like a
great success. AFDC/TANF caseloads have dropped by roughly 40
percent nationwide since welfare reform legislation was
enacted. The labor force participation rate of women
maintaining families with children has increased from 72
percent to 77 percent. Federal outlays for welfare, Food
Stamps, and Medicaid have decreased significantly.
There is other information, however, that suggests that
there is cause for some concern. A study of U.S. Census data by
the Center on Budget and Policy Priorities, for example,
concluded that the average incomes of the poorest single-parent
families dropped by more than $500 between 1995 and 1997.
That's a lot of money for a family getting by on just a few
thousand dollars a year.
In addition, a recent GAO study, done at my request and
that of Congressman Sander Levin, determined that much of the
drop in Food Stamp use was not due to a drop in need. In fact,
food banks in Pittsburgh and other parts of the country are
hard pressed to keep up with local need--even with unemployment
at close to 4 percent. GAO concluded that a significant part of
the drop in food stamp use was due to efforts by state welfare
agencies to place new procedural roadblocks in the way of
families seeking assistance. The GAO also found that many
people who were eligible for food stamps were either not
informed or were misinformed about their eligibility by state
caseworkers.
We also have learned that, nationally, only about 15
percent of the 10 million children who are eligible for
subsidized child care are being served. Local officials in my
district have told me that there is a long waiting list for
child care subsidies in Allegheny County, and that the list
would be even longer if many families hadn't given up
completely on the prospect of ever getting this assistance.
Additional Congressional action to provide child care
assistance is clearly needed. Earlier this year, I cosponsored
legislation that would increase funding for the Child Care and
Development Block Grant and the Dependent Care Tax Credit, and
I recently signed a letter to President Clinton urging him to
fight for increased funding for the Child Care and Development
Block Grant in the fiscal year 2000 Labor-HHS appropriations
bill.
Similarly, recent studies by the GAO and Families USA
determined that in 1999, fewer children were covered under the
Children's Health Insurance Program (CHIP) and Medicaid than
were covered by Medicaid alone in 1996. Pennsylvania is one of
12 states where Families USA determined that 30,000 fewer
children were receiving health care coverage under CHIP and
Medicaid than in 1996--even though more children are now
eligible for coverage. The Census Bureau recently reported that
a million people across the country lost Medicaid coverage last
year. It is irresponsible and inhumane to deny health care
coverage to children. The lack of health insurance for poor
families is a community concern as well as a humanitarian one--
charitable care for the poor, which averages $60 million a year
in Pittsburgh's hospitals alone, places significant economic
pressures on institutions which are already under great
pressure from the changes taking place in the health care
industry.
The GAO also found that very few states are doing a good
job of providing Transitional Medicaid (TMA) coverage--even
though it is required by law. GAO suggested that the
beneficiary income reporting requirements associated with
Transitional Medicaid significantly reduce the percentage of
families that take advantage of this program. The Health Care
Financing Administration (HCFA) has proposed eliminating these
requirements for up to one year, and is my hope that the
Subcommittee will hold hearings on this issue--and consider
enacting such legislation if the hearings suggest that it would
increase TMA coverage.
The 1996 welfare reform act clearly benefited from the
accident of good timing. The bill was enacted into law in the
midst of one of the strongest and longest economic booms of the
20th century. Welfare caseloads were dropping dramatically
across the country before the welfare reform bill was even
enacted. Since 1996, the economy has been particularly strong,
with unemployment dropping recently to record lows. It is no
surprise that welfare caseloads are dropping. This is the
period in the economic cycle when we would expect welfare rolls
to decline. A rising tide does eventually lift all boats--if it
rises high enough. Moreover, other Congressional action has
helped to reduce poverty in this country and get families off
welfare--part of the success in helping welfare families become
self-sufficient is attributable to increases in the minimum
wage and expansion of the Earned Income Tax Credit, both of
which I supported. But the real challenge for the welfare
reform act will come when the economy slows down or stalls, as
it inevitably must.
In conclusion, let me merely state that oversight hearings
like this one are essential in order to ensure that children in
this country don't go hungry or homeless--and to ensure that
they receive the medical care and child care that they need. I
believe that Congress needs to take additional action to
achieve these important objectives. We are clearly falling
short even in the current favorable economic climate, and we
won't really confront the limitations of the 1996 welfare
reform bill until the next recession hits.
I look forward to hearing testimony from the witnesses who
will testify before us here today. I commend Chairman Johnson
and Congressman English for their interest in this important
issue, and I look forward to working with my colleagues in a
bipartisan fashion to help all American families become self-
sufficient and enjoy a decent standard of living.
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Mr. English. And with that let me welcome Secretary
Houstoun with whom I have worked extensively over the last few
years on this issue. I want to invite her to offer her
testimony. We have a flexible 5-minute limit. If you could
limit your comments and offer your full testimony to the
record, that would help us move forward. And I would also like
to create an opportunity for us to give you a full range of
questions. So I thank you for being here, Madam Secretary, and
I compliment you on the extraordinary job with the Ridge
administration addressing this great challenge. The floor is
yours.
STATEMENT OF HON. FEATHER O. HOUSTOUN, SECRETARY, PENNSYLVANIA
DEPARTMENT OF PUBLIC WELFARE
Ms. Houstoun. Thank you, Congressman English. It's a great
pleasure to be here. Pennsylvania was one of the first States
to enact a comprehensive State welfare reform program. We did
that in 1996, about 5, 6 months before the Congress acted. We
had bipartisan support for our welfare program and we are
working very hard to replace the old entitlement program that
mired families in poverty, without any movement toward self-
sufficiency. We take it very seriously and very responsibly. I
think once you've gone around the country and heard the
concerns about the ``race to the bottom,'' this has not
happened, certainly not in Pennsylvania. We're very proud of
the compassion and the care with which we designed our program.
In Pennsylvania we really had a three-pronged approach. For
those people who were immediately eligible and able to work, we
helped them get a job. In the first 24 months clients have a
great deal of latitude to pursue education as fulfillment of
their work obligation. After 24 months clients need to be
working 20 hours a week, but to pay attention not just to that
24th month deadline but also to the 5-year lifetime limit that
is part of our program.
We have a very wide array of employment and training
programs. They range from intensive wraparound supports all the
way through simple job preparation programs to support clients
who need different kinds of preparation before they attach to
the work force.
We have a strong school component requiring recipients who
have not completed school to enroll if they are under 18 and
encouraging those who are over 18 to complete their education.
We do believe that there is dignity in all work and we hear
that from our clients. The individual's first job represents
the first step on a career ladder that has to include
retention, advancement and job skill upgrades. We have designed
our programs to reflect the lessons from research by the
Manpower Development Research Corporation, which has
demonstrated in countless evaluations that combining work with
skill building and educational opportunities is the best
approach for most welfare clients to become self-sufficient.
We are especially proud that Governor Ridge and the General
Assembly enacted a ``make work pay'' structure for our program.
It provides immediate and lasting financial incentives to work
by disregarding 50 percent of the earned income when
calculating a recipient's cash assistance check. In the old
system, as you mentioned, Congressman, it did not pay to work.
In the new one, particularly in Pennsylvania, it certainly
does.
We've taken the time to look at the package of benefits
that a working welfare recipient receives. And just to give you
a local perspective on what you displayed on the board from a
congressional and national perspective, if a client is working
at a $5.75 an hour job for 35 hours a week, when one combine
Medicaid, child care, the earned income tax credit and food
stamps, that $5.75 job turns into a job worth over $12 an hour.
That's a significant enhancement in the capacity of that family
to take care of itself and be on the road to self- sufficiency.
In Pennsylvania our caseloads have declined pretty
consistently with the national perspective. And that's
particularly significant in that during the first 24 months on
welfare there is no hourly minimum requirement for work.
There's an obligation to look for work but there's no minimum
hourly requirement as there are in many other States. Erie
County has seen a 46 percent decline. Statewide it's been about
41 percent.
We've had over 150,000 Pennsylvania clients get jobs since
we began our program in March 1997. There's been over 7,000
here in Erie County. This includes full and part-time work.
Many of these jobs almost typically are over the minimum wage.
Statewide the average is about $6.77 an hour. It's, I think, a
little bit lower than that here in Erie County. About 40
percent of these jobs do include some form of medical benefits
after about 6 months, which is a very standard expectation in
our programs.
Welfare recipients are competing for and obtaining jobs
throughout the mainstream economy from retail and food service
to industrial and medical-related industries. Many of them
start in business services but then they move on and take
permanent jobs outside the temporary agencies that may have
gotten them a first job.
We've also learned a lot about who was on the caseload and
how complex it is. Statewide nearly 85 percent of the caseload
has a high school diploma or GED, although that's different in
different parts of the State. Typically it's a single parent
household with two children. But almost always, the family is
discontent with their circumstances and very much want to
improve the situation for their families.
Typically welfare recipients are not as barrier-laden as
the general public might perceive them to be. And they are very
often very eager to work.
We have found in our tracking that about two thirds of the
Pennsylvania recipients have left the welfare rolls and had
some employment since leaving. That's also very consistent with
what other States have reported. Interestingly, our telephone
surveys have found that former recipients report optimism about
the future, greater satisfaction about their futures, and no
disturbing symptoms of quality of life degradation. In fact, a
majority report an enhanced quality of life compared to their
life on welfare.
This is all very good news, but as all three of our
representatives have said, there is a lot more to be done. We
want to help families become truly self sufficient. We are very
active participants in the new work force development system
that is emerging because we know that it's going to provide
valuable education and training opportunities to transitional
and entry level workers. It's very, very critical to us that
they move into the system and be ready to go and be more agile
as the economy changes.
We also know that we need a lot of increased investments
for employment and training. Pennsylvania has invested nearly
$240 million in employment and training programs. We've
probably doubled our training levels and funding levels under
TANF. We're able to do things, make offers that were
inconceivable under the old programs simply because of the
flexibility we have in the block grant. Pennsylvania's been a
leader in making sure that employment and training programs are
performance-based and that we get a strong value out of our
employment and training programs. They are structured so that
they receive greater compensation if they have high retention,
high placements, higher salaries and better medical benefits.
Mr. English. Can we get into a question and answer period?
Ms. Houstoun. Certainly, certainly.
Mr. English. And I'll let you wrap up at this point.
Ms. Houstoun. OK. Let me just tell you about some of the
areas where we do think we have some work to do. In child care
we've changed the system dramatically and increased access by
working families but we do still have some bugs in that system
that we need to deal with.
We also, as I said, need to think about families that need
additional education and training to advance. We need to deal
with barriers people have with traditional voc rehab services
and other kinds of substance abuse or health services that
connect those for those kind of families.
And finally and very properly we need to address the issue
of retaining children on Medicaid. All States have had some
difficulty in retaining children on Medicaid when the caseload
went into free fall, because many families walked away from the
entire benefit package. We have started an aggressive campaign
to bring those families back to Medicaid. We'll be training our
county assistance offices to be certain that they do not close
the Medicaid and the food stamp case when the cash case closes.
We've seen the reversal in that trend and are very optimistic.
The record would probably be the sending 32,000 Access cards
out earlier this year to families who had left Medicaid in
order to bring them back into the system.
[The prepared statement follows:]
Statement of Hon. Feather O. Houstoun, Secretary, Pennsylvania
Department of Public Welfare
Good afternoon, I am Feather Houstoun, Secretary for the
Pennsylvania Department of Public Welfare. It is both an honor
and pleasure to provide you with testimony on Pennsylvania's
effort in welfare reform.
While several states had waivers operating in early 1995
and 1996, Pennsylvania was one of the first states to pass a
comprehensive, state welfare reform law. We enacted our law in
May 1996, several months before the federal legislation was
signed into law.
In 1996, the U.S. Congress embarked upon eliminating a 40-
year old entitlement system that entrenched families in poverty
and provided little opportunity for self-sufficiency. Welfare
reform represents one of the most profound social policy
changes in decades--permitting different welfare systems that
reflect the diversity of the nation.
Pennsylvania's reform is built upon three principles:
personal responsibility, parental responsibility and self-
sufficiency through work. These philosophies drive our state
strategy for moving welfare families into the workforce and
enabling them to build a path toward self-reliance. In
Pennsylvania, we have taken a three-pronged approach to
connecting individuals to jobs. For those who can immediately
compete for jobs, we assist them to obtain employment right
away. For those with more barriers, we offer opportunities for
them to build a work history, enhance their job skills and
then, connect them to the workforce. And for those recipients
who have not completed school, we require they enroll if they
are under age 18; and if they are over age 18, they are
encouraged to attend and complete their program.
In Pennsylvania, we've built a system predicated upon the
belief that there is dignity in all work. An individual's first
job represents the first step on career ladder that anticipates
retention, advancement and job skill upgrades. National
research conducted by the Manpower Demonstration Research
Corporation has proven that combining work with skills building
and educational opportunities is the true foundation to
becoming self-sufficient.
More importantly, Governor Ridge and the General Assembly
enacted a ``make work pay'' structure, which provides immediate
and lasting financial incentives to work by disregarding 50
percent of earned income when calculating a recipient's cash
assistance check. In the old system, it did not pay to work--in
the new one, it does pay to work, and our experience
demonstrates that.
Our family caseload numbers have declined by nearly 40
percent statewide. Thousands of individuals previously trapped
in a system of disincentive have now gone to work, sometimes
for the first time ever. In our two and one-half years of
reform, over 150,000 Pennsylvania welfare recipients secured
full or part time jobs at well above the minimum wage. Many of
these jobs come with health care benefits. The statewide
average wage is $6.77 and nearly 40 percent of individuals
getting jobs are receiving some form of paid medical benefits
within the first six months of employment. Welfare recipients
are competing for and obtaining jobs in the mainstream economy
from retail and food service to industrial and medical-related
industries.
Over the past two and one-half years we have gained a
greater knowledge of who is receiving cash assistance in
Pennsylvania. Gone are the stereotypical perceptions of a
person with little or no ambition to better themselves. The
individuals in our program-nearly 85 percent of the total
caseloads-typically have at least a high school or GED
education. These are single-parent households with two children
in their care. These are parents that, for the most part, are
discontented with their current circumstances and want to make
a change for the better for themselves and their families.
We have found that welfare recipients are not as barrier-
laden as the general public might perceive them to be. Nor are
their barriers to employment all that different from the
general population. We have found that nearly of 60 percent of
our caseload has some type of work history and approximately 70
percent have some education at or above high school completion.
For many, the leading barriers to employment are child care and
transportation.
Comprehensive tracking also tells us that over two-thirds
of the Pennsylvania recipients that left the welfare rolls have
had some type of employment since leaving--very much in line
with what other states report of their former clients. In a
telephone survey of a sample of former Pennsylvania welfare
recipients, 85 percent reported that they feel better about
their future.
While these are impressive numbers, there is more work to
be done. While families who took the changes of the system
seriously and benefited from our ability to invest in their
futures--got a job, took advantage of employment, training and
education opportunities, and used work supports (child care,
transportation, etc.)--they still struggle to become truly
self-sufficient. They continue to be helped through assistance
programs in child care, food stamps and medical assistance; we
would hope for each the opportunity to advance out of poverty.
The Department supports this intent by being an active
participant in the new workforce development system, which will
provide valuable education and training opportunities to
transitional and entry-level workers statewide.
Through careful assessment and monitoring, we were able to
determine early in reform that increased investments were
needed to meet the needs of not only those individuals with
barriers to employment, but also those people that had done
what was required of them--to take that first job. Because of
the flexibility of the TANF block grant, we have been able to
fund skills building and educational activities at levels that
were inconceivable in the past. This year alone, Pennsylvania
has invested nearly $240 million in employment and training
programs, a two-fold increase of funding prior to welfare
reform.
Our investments do not come without accountability. As
stewards of taxpayer funds, we have a responsibility to ensure
a value-add in our services and a return on all of our
investments in services. In addition to our increased funding,
we now utilize performance-based contracting for most of
employment and training opportunities. In fact, Pennsylvania
has become a national leader in performance-contracting. We
consistently command approximately 65 percent placement rate
statewide. Moreover, our strict monitoring, corrective
compliance protocols and authority to withhold contract funding
gives us the leverage to demand performance, prevent
``creaming'' and offer qualified candidates to Pennsylvania's
employers. Based upon ``pay for success'' principles, this way
of doing business with our vendors has exponentially increased
the likelihood of a welfare recipient remaining in a position,
rather than hopping from job to job.
This past March we took steps to ease the transition from
welfare to work for these parents. Our subsidized childcare
system in Pennsylvania previously posed a barrier for some
mothers. Faced with the stress of obtaining employment, our
system offered little respite financially for mom. She would
have to pay the full cost of her children's care out of her
pocket, later receiving an adjustment to her cash grant that
would rarely cover the cost of care. The changes we made
eliminated this problem for these mothers. Now, she pays only a
small portion of her child care costs, with the state picking
up the rest of the tab.
By streamlining the subsidized system, we not only eased
her transition, we were able to alleviate a financial burden
not only for parents on welfare, but also the working poor.
Many of these parents were on waiting lists to receive help
paying for their care. Today, after record increases in child
care from TANF funds, we have largely cleared those waiting
lists and are reaching out to ensure all working poor parents
know what is available to them. We now enroll twice as many
children per month compared to the old system. This undoubtedly
will yield positive effects on job retention and advancement of
welfare and transitioning parents, and could quite possibly,
prevent other low-income parents from having to turn to welfare
to help make ends meet. This year alone, the Commonwealth has
invested $377 million into a subsidized child care system.
As you can see, Pennsylvania has many triumphs under its
belt, but we still face challenges, and we have begun to re-
tool our systems and re-invent the way we look at our welfare
system. Job retention and advancement initiatives are already
in place to address those individuals already working. Many are
reaching their second and third years on cash assistance. For
these people, the upcoming years offer the opportunity to build
further skills so that when their five years are up, they are
self-sufficient.
We have also begun to engage individuals earlier in
employment and training opportunities. Those coming into the
welfare system for the first time have the greatest opportunity
to gain the skills and education necessary to succeed. By
coupling education with a work history early, a recipient will
be far better equipped to compete in the job market than
someone who has done little with their time on welfare.
Another group of individuals we have begun to focus on are
those currently exempt from employment requirements. Despite
their exemptions, they too, face their welfare time running
out. It is imperative that we engage them in the same
employment and training opportunities to prepare them for life
after welfare. Increased outreach efforts coupled with
coordination with agencies providing domestic violence,
children and youth, and physical and mental health services are
proving to be fruitful in getting people engaged in the system.
In closing, Pennsylvania is committed to continuing the
common-sense and compassionate approach to welfare reform it
began in 1997. We have gained a vast knowledge of the
individuals we serve, as well as the system we built. We have
employed new strategies and acted swiftly to address the ever-
changing needs of our welfare population. As we move forward, I
commit to you today we will continue to build upon principles
that act as our guide through this sea of social change--
personal responsibility, parental responsibility, and self-
sufficiency through work--to ensure better lives for the
residents that need the state's help the most.
Mr. English. Thank you, Madam Secretary. I'll let you
submit the balance of your testimony to the record. And I will,
if I may, start the questioning. As you know, probably the
biggest problem I've run into with welfare reform anecdotally
on the local level has been the problem of access to child care
services, particularly coming at the end of a budget year.
Now you have talked to me in the past about what you've
been doing to address this problem and the transition to a new
child care system that you've been structuring in Pennsylvania.
Now can you elaborate on that a little bit? Again, the bottom
line, if someone is a single mother and leaves the welfare
system to go in to the work force, can they be reasonably
certain of that support from the State now if they do so?
Ms. Houstoun. Yes. Two answers to the question. First of
all, the old system that we had in Pennsylvania sabotaged the
moms leaving welfare. They got an allowance when they were
training, then they went to a system where they had to pay out
of pocket and get reimbursed but not for the full cost of the
day care. When they left welfare they got 1-year allowance and
then they had to go stand in line for a new child care subsidy.
Now from start to finish on welfare and leaving welfare
that mom has a child care allowance which allows her to buy any
range of child care. But the beauty of what we've done to the
system is that we've used TANF block grant funds for that. And
the result of that is that as we're paying for the TANF
families we've also doubled the access of child care for
working families that have not been on welfare at all.
So essentially--we are very close to eliminating any
waiting lists for child care subsidies, and we are reaching out
to make sure the families know it's available. They frequently
had to wait a year or more. In Pittsburgh we are a little bit
behind in that there is a lot of families there and it's simply
processing in the system that's taking us a little bit longer.
But here in Erie we're turning ground applications for child
care subsidy in about 6 weeks.
Mr. English. You have talked today on a couple of occasions
about training programs that you were a part of and oversee
that have been arranged at the welfare-to-work transition. And
I would be curious to know from the experience so far what kind
of training programs work.
Ms. Houstoun. It depends a lot on the needs of the
individual. Some people do very, very well simply receiving
essentially coaching and soft skills that are necessary for
working in the marketplace. Other people need more intensive
wraparound services and that's why we have something called
single point of contact which brings all of them in.
The national research suggests very strongly that a work
experience with training experience together is likely to be
the best program, one that's most likely to work for someone
who really does need training.
Mr. English. And looking at the composition of the welfare
caseload from here, recognizing that many of the people most
ready and leaving the welfare system to go back into the work
force are
already in the process of doing so. In order to meet the goals
set in the Federal statute, what sorts of training programs are
you going to need to emphasize to get to the next level?
Ms. Houstoun. I think that people generally believe that as
we go along we will encounter more people with greater
barriers. Typically substance abuse barriers, things like that.
But it's important to understand that it is terrifically
important that people get attached to the work force. If they
delay entry into the work force, just in a training program or
in a substance abuse program for an extended period of time,
they have not made the essential step that's necessary for self
sufficiency. So you're going to see us continuing to help
families that have simply come into the system the first time
and tailor it to meet whatever their level of need is.
We're also going to be focusing on those families that have
high barriers that they must address before they're going to be
competitive in the work force.
Mr. English. My final line of inquiry has to do with a
problem that Mr. Coyne and I both felt on your opening
statements and that is the problem of the declining utilization
of Medicaid and food stamps on some of the families that most
need it. I know Mr. Wiley in his testimony is going to touch on
this as well. What is Pennsylvania doing and what do you intend
to do to guarantee access to eligible families on Medicaid and
food stamps?
Ms. Houstoun. Well, as I indicated earlier, we have been
very actively addressing the issue of people essentially
walking away from the County Assistance office altogether and
losing their food stamp and Medicaid benefits. And we are
actively combining CHIP and MA outreach. We have a lot of
things to try to help that. We do not do what Congressman Coyne
mentioned, that is, diversion programs that essentially
discourage people from applying for services. We do not need
that in Pennsylvania. We do not get criticized for that.
But I think we do need--frankly, I don't think we ever
anticipated--nor did any State anticipate the number of people
who, given any provocation, would be willing to walk away from
the Public Assistance system. Now I think we're really quite
prepared organizationally for that and we're now having to
think a little bit differently about how we approach the issue
to assure they receive benefits to which they are eligible.
Mr. English. Thank you, Madam Secretary, and we're grateful
for your time today. My time has expired so I recognize Mr.
Coyne's.
Mr. Coyne. Thank you, Phil, very much and welcome to
Secretary Houstoun. We appreciate your testimony. I wonder if
you could be a little bit more specific, however, of what you
are doing relative to people who are not aware that they are
still eligible for Medicaid, for the food stamps other than
simply say come to the caseworker.
Ms. Houstoun. The caseworker is a single form of entry so
that caseworker has that person at her desk or his desk and we
are reviewing that interaction. The reduction in Medicaid does
not come from the entry level side of the equation as much as
it has from the simple fact that the family will call them and
say close my case. Or they may simply not show up. And they
create a compounded problem of disengaging that caused that
pattern.
We understand that, and we know that it's a problem. What
we did about 4 months ago after examining the question
carefully was to literally send 32,000 families new Access
cards, live Medicaid Access cards and said take it, use it and
send us a pay stub. Send us anything that can establish your
income eligibility and we will enroll you, we want you to have
Medicaid. We are doing outreach on the radio and television,
and we're sending flyers to community groups. We are trying to
do everything that we possibly can. Because as I said, I think
we simply didn't fully appreciate the fact that people were
willing to essentially walk away from the public assistance
system and we just--there were too many things happening at
once. But I think we have rectified the problem--I think we
have turned the corner. I will mention the advertising around
CHIP. We have now doubled the CHIP enrollment over the last 4
years. And Pennsylvania has cross-over steps to Medicaid as
well. So I'm optimistic that we understand the dynamics and
will address it.
Mr. Coyne. And what about the eligibility for food stamps,
reminding them that they are eligible for food stamps even
though they're leaving the program?
Ms. Houstoun. We are currently in the process of correcting
any kind of procedural problem in the organization where
someone might have closed a cash case and a food stamp case
together and we've corrected those kinds of issues. We're now
looking at food stamp eligibility generally and are willing to
participate in some of the outreach programs that are being
recommended with the USDA.
I might add that in the recent USDA survey of States on
hunger, Pennsylvania did relatively well. Certainly not the
best, but within the top four or five States in terms of the
portion of people who reported being hungry or having to rely
on emergency food supplies. So we know it's an issue. We are
addressing it and we'll be very careful about County Assistance
offices and not discouraging people from getting benefits that
they deserve.
Mr. Coyne. You mentioned in your testimony that the
Commonwealth's welfare caseload has been reduced by 40 percent
since 1996. What percentage of those leaving the program,
welfare program have found stable employment?
Ms. Houstoun. I don't have the numbers with me exactly, but
I think it's in the order of about 40 percent of those leaving.
I will have to defer--the difficulty with this is the way we
get that information, the way we answer that question is tricky
because we have to rely on payroll tax and unemployment
compensation records. And as you know that does not include
certain kinds of jobs, such as Federal jobs, and they don't
obviously include cash reporting at various times. So you don't
really get a strong picture of that.
Keep in mind also that many women may make a decision to
work part time because they are also receiving child support,
for example, and they are able to patch together something
that's more what they would like to have in their lives. So
it's a combination of things. There is a certain portion of
people for whom we do not have a record of them working. But as
I said, the telephone surveys that have been done in this State
and in other States of former welfare recipients does not
suggest that there is a serious degradation of the ability of
the family to pay their rent and to live the life that's good
or better than what they had been on welfare.
Mr. Coyne. Can you tell us anything about the former
welfare recipients who are not working? What is the status of
that group of individuals?
Ms. Houstoun. We are in the process right now of completing
an additional report on former welfare recipients. And the
report is going to give the number of them and it will give us
demographic information about them. I'm not sure that we're
going to be able to say a great deal other than through the
telephone survey. The surveys had fairly limited response rates
so I'm not sure that we will be able to parse it down to a
level to answer your question adequately. We will give you
demographic information.
I mean, it's curious, for example, those who don't have any
reported wages tend to be older and they also are more likely
to be married. And more so than the ones who are eligible. So
it's an interesting demographic profile.
Mr. Coyne. Well, you probably won't be able to tell us for
those who have left welfare, what percentage of those who have
left welfare are out of the poverty classification, above the
poverty level?
Ms. Houstoun. Well, we do have recorded wage data and this
is available sometime in the next 2 to 3 weeks when we finish
the report. For those who are working we do have data. What the
data shows is that if they're staying continuously in the work
force, then wages go up about 4 to 5 percent a quarter. So it's
a fairly significant rate of improvement in the financial
situation based on the quarterly data. Now if they moved in and
out of work force they won't see the same relative increase.
But it is fairly clear that if they go into the work force they
do see that increase. And over a period of time a tax credit's
part of the overall package. They are approaching an out of
poverty wage level.
Mr. Coyne. Thank you very much.
Mr. English. Thank you. I would like to now recognize the
Chair of the Subcommittee, Chairman Johnson.
Chairman Johnson. Thank you. I'm not sure, Secretary
Houstoun, that I understood something you just said. Did you
say that if recipients go into the work force at some level of
government, their wages don't show up in your data?
Ms. Houstoun. The unemployment tax statement that was
collected by Labor and Industry agencies does not include the
Federal agencies.
Chairman Johnson. So in other words if they're employed by
a Federal agency and then they become unemployed, and they're
receiving unemployment compensation, you can't see that with
your data, but you would see it if they're receiving Government
wages?
Ms. Houstoun. What I'm saying is that we know--we track
former welfare recipients' employment by looking at this Labor
and Industry unemployment tax data for those paying into the
unemployment coffers. Federal employees don't pay into that
State's unemployment fund, so when we do the State transfers to
find people and see what their wage history is, we're missing
that, and that's very interesting. So in a sense some of the
best-paying jobs with career ladders because----
Chairman Johnson. If someone becomes a mailman which is
really--mail carriers are certainly a job moving up, that
wouldn't show up on your records?
Ms. Houstoun. That's very interesting. Of course, both
State and Federal Government and local governments also carry
good health benefits, retirement plans and----
Chairman Johnson. I believe State and local employment does
show up in the State records but not Federal. That's very
interesting. Just a couple of things. First of all, the Federal
law does require paternity determination so that we can better
enforce our child support laws. Have you had any difficulty
with enforcing paternity determination requirements?
Ms. Houstoun. It depends a lot on the local culture and
situation. We are very careful not to put mothers in risk
situations so that are good cause exemptions. It has been
something of a point of irritation and concern among some moms.
Also it's required for child care subsidies.
Chairman Johnson. What about the requirement of Federal law
that young people under 18 remain in school? Have you had any
refusals to participate in the program because they didn't want
to remain in school under 18?
Ms. Houstoun. I have not heard if that's a major trend. We
encourage staying in school. We provide programs, pregnant and
parenting programs, other programs to try to keep kids in
school. So we are very supportive in that respect and indeed we
will provide her child care. Any woman who is under 18 she
cannot get her own check and live outside the family's house,
unless there's an abusive situation, you know, some reason why
that cannot be met.
Chairman Johnson. So you haven't actually had to enforce
the law by withdrawing benefits if people refuse to stay in
school?
Ms. Houstoun. I'm sure there are situations where young
mothers have chosen not to accept benefits because of those
requirements. I can't give you a number on that. I can try to
determine that.
Chairman Johnson. But it isn't big enough so that you're
hearing that?
Ms. Houstoun. It's not something that I'm hearing about.
Chairman Johnson. All right. Mr. Wiley in his testimony
claims that when mothers leave welfare for a job they're
abandoned. To use his words, he says, this is the time many, if
not all, welfare-to-work programs declare success and terminate
them from the program. Not only is the client's support system
terminated as soon as they get a job, both monetary and other
benefits are removed. Is this true in Pennsylvania?
Ms. Houstoun. Mr. Wiley showed me specific evidence of
that. Certainly we need to encourage families to--we want
families to stay on Medicaid now and on food stamps. So again,
there may be situations procedurally where someone says close
my case and that caseworker has made an error and not elicited
the proper information to keep that person on. We're trying to
correct that through good staff training.
Chairman Johnson. More specifically do you have any reason
to believe, for example, that the welfare recipients entering
into the work force don't continue to get their welfare
benefits?
Ms. Houstoun. We have monthly reporting. I think the
situation which may occur--and it's not appropriate for it to
occur, is that the family will--if someone takes a job and
says, go ahead, close my case, if there's not proper attention
given to separating the cash assistance situation from the food
stamp and Medicaid situation, we could have that happen
inadvertently.
And I think that we have carefully trained our caseworkers.
I don't believe that it has been a significant problem with
Erie County, just by evidence of the food stamp rolls and the
Medicaid roll trends. But it has been in some places as it has
been all over the country, and I think we need to also address
that.
With respect to abandoning the family, most of our
performance contracts with vendors include additional incentive
pay for people who stay on the job. Most of them provide some
assistance and backup to moms who have been placed in
positions. So if we're not doing enough of that, I think we're
going to be addressing it with attention to advancement of
services that we are now expanding.
Chairman Johnson. In other words, the job placement
agencies get a higher remuneration for their work if they can
demonstrate that the person has to succeed and then stay with
their job for what, 6 months?
Ms. Houstoun. Three months or six months depending on the
contract.
Chairman Johnson. He also mentions in his testimony that 19
to 30 percent of the people who leave welfare and get a job
return to welfare within 15 months. Is that a statistic that--
--
Ms. Houstoun. I don't think I would quarrel with that.
That's a wide range. It's been less than that in some counties.
It's probably been that much in others. However we've had
strong training programs and people tend to stay on jobs. A lot
of people simply get hired in a hot economy and really have not
developed good reliability and good job skills. They may very
well churn through the work force. And that's something that
we've been able to address and are addressing.
Chairman Johnson. And I just have two brief questions since
our time is short. Later on we'll have testimony that there are
new regulations that are specific to the eligibility
determination for the use of TANF funds for abused and
neglected children. And we're going to have testimony that
those regulations are very prescriptive and will make it hard
for TANF to serve abused and neglected children. Are you aware
of that and would you provide us with comments on those
regulations?
Ms. Houstoun. I'd like to do that for the record. One of
the elements of the new TANF regs took effect in October. It
restricts the county from the use of TANF funds for certain
child welfare services. And all the States are struggling with
how to do that. We had previously used block grants funds, but
are now restricted and we all have been struggling with how to
meet those needs, and figuring out how to do it within the
regulations. It has certainly complicated our lives. I don't
think any State is willing to let abused and neglected children
go wanting. We just have to figure out a different way to fill
the budget requirements of those programs.
Chairman Johnson. I was not aware of that until this was
brought up in the testimony which I had a chance to read
beforehand. And it does certainly seem counterproductive, yes.
Ms. Houstoun. So we will try to look at that and we are
going to be doing some emergency changes in the next week I
hope and maybe we can even address that. Certainly that's part
of our work in the next session. We'll take a look at that. I
appreciate your interest and we will get you something quickly
so that you have it on hand.
Chairman Johnson. And last, Mr. Wiley also mentions the
desirability of in-home case management and how you've had a
lot of exposure in this area over the years and I was just
wondering what your reaction to that was?
Ms. Houstoun. There's no question that there are families
where, I think, the stresses on that family are such that
outside assistance at sometimes may be very necessary and
valuable. I think deciding how one is going to decide which
family needs that when you're thinking about an active program,
is a very different sort of issue. The child welfare system has
caseworkers. The mental health system has caseworkers. The
employment training we have has caseworkers. And deciding how
you structure that so that there's really value added and a
change of outcome for families, is very, very difficult that--
--
Chairman Johnson. I should think you should get into that
in this next round of attention that you described this
morning. It might be useful to look at that, how we identify
those families in which there are so many problems that this
approach over time will be very good.
Ms. Houstoun. And we've seen there have been some
demonstrations done in Pittsburgh, where it wasn't quite as
intense as that. It was simply an extra person to call to
discuss issues with, and that was very useful. But in that
instance it may be self-selection. If the family knows it has
problems and is looking for help which, you know, they may
solve the problem on their own. It's a very difficult thing to
value, how to employ these resources judiciously.
Chairman Johnson. Thank you very much for your testimony
and for meeting with us this morning and congratulations on the
good work that Pennsylvania has done in taking these steps.
Thank you.
Mr. English. Thank you, Secretary Houstoun, for coming in
today from Harrisburg to represent the administration and doing
so ably. We appreciate your testimony.
And with that I would like to call the last panel forward,
which consists of R. Benjamin Wiley, executive director of
Greater Erie Community Action Committee, which I might add, has
the reputation of being one of the most successful community
action agencies in the country. We're delighted to have you
here. Mr. Tom Gamble, director of the Institute for Child and
Family Policy at Mercyhurst College, a think tank that over
this last couple of years has very much turned focus on the
local scene and local social needs. And I think it's a unique
resource among local educational institutions in the region.
Mr. Gary Cervone, chief administrative officer of the Mercer
County Community Action Committee of Sharon, Pennsylvania.
We're delighted to have you here, sir. And Karen Bechtold,
owner and operator of one of our local McDonald's franchises.
We've enjoyed talking to you on a number of occasions, Karen,
in our Washington office and you've offered some very valuable
insights in the past to us directly. We appreciate your taking
the time to be here to offer those insights for the
Subcommittee.
With that, Mr. Wiley, I'll turn this over to you for your
testimony. We'll try to keep everyone's testimony within 5
minutes. If you like you can summarize and submit the whole
testimony to the record. And we appreciate your being here, Mr.
Wiley.
STATEMENT OF R. BENJAMIN WILEY, CHIEF EXECUTIVE OFFICER,
GREATER ERIE COMMUNITY ACTION COMMITTEE
Mr. Wiley. Thank you. Mr. English, other Members of the
distinguished panel from the House who are here, I'd like to
take this opportunity to welcome you to Erie. I'm sure that I
have more than 5 minutes, so I will summarize.
Many times the question is asked, has the Welfare Reform
Act been successful? We know that the goal, the initial goal of
welfare reform was to move the people off the welfare rolls
into employment. We have moved people off of welfare rolls in a
big way. It's been an overwhelming success. If you ask yourself
the question, are those who moved off of welfare rolls better
off than they were before, I would say overwhelmingly that the
answer is no. The people who moved off welfare did not move
into the middle class. They are still poor and oftentimes
desperately poor.
The GECAC and its entire network across the country, some
nearly 1,000 community action agencies, believe that everyone
can and should work. Millions of families have been caught for
generations in the cycle of poverty. The move from dependency
on government assistance to gainful employment is an important
step in the development of self-worth and independence for
these families. This sense of self-worth and independence, if
encouraged and supported, will enable poor families to continue
on toward self-sufficiency.
Welfare reform has taken the first step of moving many
families from welfare to work. However, welfare reform caused
the average income of poor single mothers to drop and halted
progress in reducing child poverty according to a report from
the Center on Budget and Policy Priorities. The poorest single
parent families, those at 55 percent of the Federal poverty
level, experienced an income loss, even with the income of all
others in the household accounted for.
Many former welfare clients have gone into minimum wage
jobs with no benefits. I'm going to say that again. Many former
welfare clients have gone into minimum wage jobs and I
underscore with no benefits. These jobs do not pay a living
wage that would allow them to support their families in dignity
and decency.
These people are often without very real choices between
paying their rent and feeding their families. And I have to say
that there is no coincidence between the soaring demand at food
banks
nationwide and the decline of welfare rolls.
Also, a recent GAO report strongly suggests that the basis
for the dramatic decline in food stamp participation is, in
large part, due to the movement of poor families from welfare
to work and their belief that they are no longer eligible for
food stamps. Likewise, the uncoupling of welfare and Medicaid
has led to a decline in Medicaid participants and has placed an
increasing number of poor children at risk due to lack of
health care.
We talked in the earlier testimony about barriers and so we
all know that there are a lot of multiple barriers and I will
skip over that. We might get to that in the question period.
One thing to comment is on a new study by the Urban
Institute prepared for the Labor Department shows that welfare
recipients who are required to work should receive ongoing
education and training. And the Urban Institute study found
that TANF provides a strong incentive for local officials to
implement post-employment services which include individual
work requirements, mandated participant rates for State
caseloads and the 5-year lifetime limit on individuals.
Few recipients qualify for stable, good-paying jobs with
advancement potential. The study noted that many have fairly
low reading and mathematic ability and lack strong education
and occupational credentials. Many also have personal and
family problems that can interfere with the work. Thus they
tend to find low-wage, low-skill jobs and have difficulty
keeping those jobs and remain stuck at the low end of the labor
market.
The labor market trends suggest that without further
education and training, many welfare recipients may be trapped
in low-wage, low-skill jobs. Manufacturing jobs that once
offered good pay to poorly-educated workers have largely
vanished, replaced by service sector jobs. Today's high paying
jobs require technical skills.
Solutions. The Greater Erie Community Action Committee has
been involved in the antipoverty movement for 35 years. During
that time some overriding principles have become evident. And
I'll hurry through this. No. 1, local flexibility to design
programs to fit local needs is critical. No. 2, in-home case
management over the long term is critical to the client's
success. No. 3, a gradual reduction of benefits is necessary to
help former welfare clients' transition from welfare to work.
Transportation is a critical need that needs to be addressed.
And I'm going to skip on over to--private industry has seen
the need for transportation. Some of the temporary agencies in
the county either own or lease buses or vans to transport
clients to and from work. Workers pay for rides to work.
However, once a worker becomes a permanent employee they are on
their own to find transportation. There must be a better-
coordinated way to get workers from the inner city to the jobs
in the outlying areas.
As a result of the new flexibility in Federal regulations
and guidance, TANF funds and State Maintenance of Effort funds
may be used for an array of initiatives to help low-income
working families meet work expenses, basic needs and
participate in education or training to advance in the work
force. These changes enable States to provide services and
benefits outside of the basic welfare program and help low-
income families with income above the welfare eligibility,
whether or not they are actually receiving welfare.
Many States continue to view TANF as a program of basic
cash assistance and a set of initiatives to help families enter
the work force. They have been unsure what was allowed under
Federal guidelines, or concerned that proposed regulations
presented significant difficulties in using TANF or Maintenance
of Effort funds for new initiatives to address the needs of
low-income working families. Final TANF regulations contain a
narrow definition of TANF assistance. Work subsidies, support
services, child care and transportation, refundable earned
income tax credits, contributions and distributions from
Individual Development Accounts, such as counseling, case
management, peer support, child care and referral, job
retention, job advancement and other employment-related
services are not included in the definition. Thus States may
use TANF or Maintenance of Efforts fund to fund these benefits.
Before the concept of self-sufficiency became a part of the
rhetoric of human services and welfare reform, the mission of
Community Action was to move families from self-sufficiency to
sufficiency. In our 35-year history, we have provided thousands
of families with a hand up, not a hand out to maintain them in
poverty. Community Action agencies in general and GECAC in
particular stand ready to partner with Federal, State and local
Governments to ensure that those families that welfare reform
has weaned from dependency on public assistance do not remain
in the ranks of the working poor.
GECAC and its more than 1,000 community partners believe in
a simple philosophy that can be summarized that everyone who
can work should work. Those who do work should earn sufficient
income to provide for their family's basic needs. Those who are
unable to work, or who work but do not earn enough to provide
for their families, should be assisted by policies and programs
to meet their basic needs and secure safe and decent housing.
And I wanted to thank you for the invitation to appear here
today. And in closing that I would basically just say with the
personal responsibility to work in consolidation, we have been
around the block, we've been in a cycle. And I think as the
Secretary said we've learned a lot from it and the news is not
all bad news. I think we just need to work harder to improve in
those areas where we know now that there are going to be
shortcomings.
Mr. English. Thank you, Mr. Wiley. We really appreciate--
knowing the depth of your experience, we appreciate your
testimony here today.
[The prepared statement follows:]
Statement of R. Benjamin Wiley, Chief Executive Officer, Greater Erie
Community Action Committee
Many times the question is asked has the welfare reform act
been successful? If the goal of welfare reform was to move
people off the welfare rolls, then yes, it has been an
overwhelming success. However, if the question is asked, are
those who moved off welfare better off than they were before,
the answer is no. The people who moved off welfare did not move
into the middle class. They are still poor, often time
desperately poor.
The Greater Erie Community Action Committee and the network
of nearly 1000 Community Action Agencies across America believe
that everyone who can work should work. Millions of families
have been caught for generations in the cycle of poverty. The
move from dependency on government assistance to gainful
employment is an important step in the development of self
worth and independence for these families. This sense of self
worth and independence, if encouraged and supported, will
enable poor families to continue toward self-sufficiency.
Welfare Reform has taken the first step of moving many
families from welfare to work. However, welfare reform caused
the average income of poor single-mother families to drop and
halted progress in reducing child poverty according to a new
report from the Center on Budget and Policy Priorities. The
poorest single parent families, those at 55% of the federal
poverty level, experienced an income loss, even with the income
of all others in the household accounted for.
Many former welfare clients have gone into minimum wage
jobs with no benefits. These jobs do not pay a living wage that
would allow them to support their families in dignity and
decency. These people are often faced with the very real
choices between paying their rent and feeding their families.
There is no coincidence between the soaring demand at food
banks nationwide and the decline of the welfare rolls. A recent
GAO report strongly suggests that the basis for the dramatic
decline in Food Stamps participation is, in large part, due to
the movement of poor families from welfare to work and their
belief that they are no longer eligible for Food Stamps.
Likewise, the uncoupling of welfare and Medicaid has led to a
decline in Medicaid participants and has placed an increasing
number of poor children at risk due to lack of health care.
Many former welfare clients are faced with multiple
barriers to work. These include lack of education, limited job
history, inadequate transportation, no childcare, substance
abuse, poor parenting skills, mental health issues, inadequate
health care, motivation and lack of multi-generational support.
Many former welfare clients have critical immediate needs such
as food, housing, clothing and serious family debt. There is
often a need for family counseling, problem solving,
motivation, sensitivity, stress management, life skills, budget
counseling, social relations, self concept development and
nutrition education.
It is the presence of these barriers that prevent former
welfare clients from moving into better employment without some
form of support. Often these barriers make it impossible to
even hold a minimum wage job over the long term. The work first
strategy has doomed multitudes to a cycle of employment,
unemployment and re-employment--all at the minimum wage. This
cycle will only last as long as the economy is booming. As long
as former welfare clients cannot overcome their employment
barriers, they will not be able to move to the next rung of the
employment ladder. When the economy slows, as it inevitably
will, these former welfare clients will be the first to become
unemployed. It is at this point that the clients will either
return to welfare in large numbers or they will be faced with
welfare's built in eligibility time clock and find they are not
eligible for benefits. Even in today's good economy, of those
welfare clients who have found employment 19 to 30 percent
return to welfare within 15 months, another 20 percent have no
job and are not living with anyone who has a job.
A new study by the Urban Institute (UI) prepared for the
Labor Department shows that welfare recipients who are required
to work should receive ongoing education and training. UI's
study found that:
The Temporary Assistance for Needy Families
program (TANF) provides strong incentives for local officials
to implement post employment services which include individual
work requirements, mandated participant rates for State
caseloads and the 5-year lifetime limit on individuals.
Few recipients qualify for stable, good paying
jobs with advancement potential. The study noted that many have
fairly low reading and mathematics ability and lack strong
education and occupational credentials. Many also have personal
and family problems that can interfere with work. Thus they
tend to find low-wage, low skill jobs, have difficulty keeping
those jobs, and remain stuck at the low end of the labor
market.
Labor market trends suggest that without further
education and training many welfare recipients may be trapped
in low wage, low skill jobs. Manufacturing jobs that once
offered good pay to poorly educated workers have largely
vanished replaced by service sector jobs. Today's high-paying
jobs require technical skills.
Solutions
The Greater Erie Community Action Committee has been
involved in anti-poverty movement for more than thirty-five
years. During that time some overriding principles have become
evident.
1. Local flexibility to design programs to fit local needs
is critical.
2. In-home case management over the long term is critical
to the client's success.
3. A gradual reduction of benefits is necessary to help
former welfare clients' transition from welfare to work.
4. Transportation is a critical need that needs to be
addressed.
The welfare reform tenet of work first has been interpreted
in many states to mean ``work exclusively.'' The initial charge
of welfare reform was to move welfare recipients into jobs, and
in many cases, any job would do. TANF and various Welfare to
Work programs from the State and Federal level have sought to
provide short-term services for clients to get them to work.
Little has been done to address the long-term barriers that
held clients on the welfare rolls. When programs have been
developed to look at retention or job enhancement, rules and
restrictions have limited their usefulness. Large surpluses of
TANF dollars at the State level do not mean that there is a
lack of need. These surpluses are emblematic of the restrictive
nature of program eligibility, which ultimately constrict
clients' participation.
Research shows that the most successful programs combine
work first and education or training. Most programs to aid
welfare clients are not locally designed. While statewide
programs now have greater flexibility to design programs that
meet their own needs; they must also meet several federal
requirements designed to emphasize the importance of work and
the temporary nature of TANF aid. These programs do not take
local needs into account. The result is that programs are
overly prescriptive of who can be served and how they can be
served. Consequently, client needs are not being met as dollars
meant to help them go unspent.
One such state-designed program is intended to support
people as they move into the work force. There are five (5)
different categories of people who can be served and five
different funding streams to pay for the services. For example
five persons who are TANF can be served and six persons who
receive food stamps only and eleven able-bodied persons and
seven persons who are post 24 month and eleven who are stand
alone can be served. If there are too many clients from one
category and not enough from another, clients in need go
unserved and dollars intended to help go unspent. This
eligibility and accounting structure makes the program
needlessly difficult to operate.
The Work Activities Expansion Stand Alone Design program is
funded at $1.2 million for Erie County. So far this year
because of restrictive eligibility only two clients have been
found in Erie County for this program; neither was interested
in participating. This program could have provided over $6000
each for 200 families to participate in education and job
training helping to make their transition from welfare to work
a little easier.
With final TANF rules broadening the range of services for
which states can use TANF and State Maintenance of Effort (MOE)
funding, and with the majority of states having substantial
amounts of unspent TANF funds, the time is right to expand the
purpose of welfare reform beyond caseload reduction. The role
of welfare reform must now be broadened to include the
assurance that families leaving welfare are equipped to advance
along the continuum toward self-sufficiency. All of us--
government, community action and business share in the
responsibility of ensuring that families who leave the welfare
rolls for work are able to earn money they need to provide for
them selves and their families and obtain jobs which offer
health care benefits.
GECAC has long believed in the value of in-home case
management. In-home case management is designed to provide
intensive outreach into the community to find clients and
intensive home-based case management to help people move from
welfare to work. In-home case management acts as both a
recruitment and support service. It is a long-term program that
can stay with the client throughout the transition from
dependency to self-sufficiency. It is designed to help families
carry out long term strategies beyond the first job (i.e.,
secondary education or employer supported on-the-job training.)
In-home case managers go to the client; the client does not
come to them. The in-home case managers provide families with
whatever level of service they require, empowering them and
promoting self-sufficiency. The in-home case managers assess
the family with the head of household's help. An agreement of
mutual responsibility is developed between the in-home case
manager and the family. Some family agreements will only
consist of strategies to connect them to the world of work.
Other family agreements will include child and family needs.
The goal of the case-management staff is to coordinate all
services being provided to the family. The in-home case
managers use an ongoing assessment of families to determine
needs. One of the results is to help families overcome the
small problems that occur almost daily and become a true
deterrent to self-sufficiency. Families in these situations
long ago stopped functioning at the level needed to solve small
problems before they become major issues. One of the major
goals is to teach families to identify these problems early and
develop and use both personal and professional support systems
that keep them on the road to self-sufficiency.
Many welfare families are receiving services from multiple
service providers to meet their various complex needs and to
overcome their barriers to self-sufficiency. Families can
become fragmented by service providers' competing requirements.
It is the role of the in-home case manager to be the
coordinator for all services. The in-home case manager will
facilitate staffing among and between agencies to develop a
coordinated plan to move the family from welfare to self-
sufficiency.
GECAC has found that clients are most at risk the first day
they begin work. For many welfare clients the world of work is
a new experience filled with pit falls. Long developed patterns
of behavior must be altered and new patterns substituted. New
skills must be used for the first time. The former client must
find childcare and transportation. They need to get up and out
of the house and deal with coworkers and supervisory personnel.
This is the time they need the most support, and it is the very
same time, many, if not all welfare to work programs, declare
success and terminate the client from the program. Not only is
the client's support system terminated; as soon as they get a
job, both monetary and other benefits are removed.
Support systems need to be maintained until the client has
stabilized in his or her new situation. Using a 50-cent on the
dollar reduction in welfare benefits as clients get their first
job is a disincentive to work. Clients are often not making
enough money to secure childcare and transportation. Work must
pay. Many times the former client is worse off than before due
to the new expenses. This is especially true if medical
benefits are removed before the new worker can find a job with
benefits.
Transportation is another critical area of concern for
families transitioning from welfare to work. The County Board
of Assistance (CAO) provides allowances of up to $750 for the
purchase of and up to $400 for the repair of a vehicle. This is
a positive, important aid to employment. However, the
reliability of $750 cars is less than stellar. The $400 repair
allowance can very quickly be expended. The CAO also provides
$36 per month for gas or a bus pass until work is secured. The
CAO provides an unlimited ride bus pass for those individuals
who do not have a vehicle but only until they get a job. A
major problem is the times the busses run and the extent of
their routes. The busses in Erie run between 6:00 AM and 10:00
PM. This is not a problem if someone is working a first or
early second shift job. If they work a typical second shift,
usually 3:00 PM-11:00 PM or 4:00 PM-12:00 AM, they face relying
on someone for a ride home or calling a taxi. If they work a
third shift, they would have to arrive at work an hour or more
before their scheduled start time.
Increasingly, the Erie Mass Transit Authority (EMTA) offers
limited routes. EMTA has decreased or eliminated less
profitable routes over the years. There are major employers,
i.e., Bush Industries and several motels, that are located
beyond the bus routes. Several of these employers report that
they have difficulty finding and retaining employees for
various reasons, including the lack of reliable transportation.
Private industry has seen the need for transportation. Some
of the temporary agencies in the county either own or lease
busses or vans to transport clients to and from work. Workers
pay for rides to work; however once a worker becomes a
permanent employee they are on their own to find
transportation. There must be a better-coordinated way to get
workers from the inner city to the jobs in the outlying areas
of the county.
As a result of the new flexibility in federal regulations
and guidance, TANF funds and State Maintenance of Effort funds
may be used for an array of initiatives to help low income
working families meet work expenses, meet basic needs, and
participate in education or training to advance in the
workforce. These changes enable states to provide services and
benefits outside of the basic welfare program and help low
income families with income above the welfare eligibility
whether or not they ever actually received welfare.
Yet many states continue to view TANF as a program of basic
cash assistance and a set of initiatives to help families enter
the workforce. They have been unsure about what was allowed
under federal guidelines, or concerned that proposed
regulations presented significant difficulties in using TANF or
MOE funds for new initiatives to address the needs of low
income working families. Final TANF regulations contain a
narrow definition of ``TANF assistance.'' Work subsidies,
support services (child care and transportation), refundable
earned income tax credits, contributions to and distributions
from Individual Development Accounts, services such as
counseling, case management, peer support, child care
information and referral, job retention, job advancement and
other employment related services are not included in the
definition. Thus, states may use TANF or MOE monies to fund
these benefits.
Before the concept of self-sufficiency became a part of the
rhetoric of human services and welfare reform, the mission of
Community Action was to move families from poverty to self-
sufficiency. In our 35-year history, we have provided thousands
of families with a hand up, not a hand out to maintain them in
poverty. Community Action Agencies in general and GECAC in
particular stand ready to partner with federal, state and local
governments to ensure that those families that welfare reform
has weaned from dependency on public assistance do not remain
in the ranks of the working poor.
GECAC and its more than 1000 Community Action partners
believe in a simple philosophy that can be summarized as:
Everyone who can work should work. Those who do work should
earn sufficient income to provide for their families' basic
needs. Those who are unable to work or who work but do not earn
enough to provide for their families should be assisted by
policies and programs to meet their basic needs and secure safe
and decent housing.
Thank you for the invitation to appear before you and we
welcome the opportunity to help.
Mr. English. Mr. Gamble.
STATEMENT OF THOMAS J. GAMBLE, DIRECTOR, MERCYHURST COLLEGE
CIVIC INSTITUTE, AND MERCYHURST CENTER FOR CHILD AND FAMILY
POLICY
Mr. Gamble. Thank you, Representative English. My name is
Thomas Gamble. I'm director of the Mercyhurst College Civic
Institute. Mercyhurst's College is a Catholic liberal arts
college founded by the Sisters of Mercy. I've also been the
director of child welfare services in Erie County. I appreciate
the opportunity to address you about this important policy
issue.
There's no question that welfare reform has been one of the
most significant social policy initiatives. Most Americans
believe that family self-sufficiency through productive labor
is dignified and dignifying and that responsible social policy
should encourage it.
The impact of welfare reform in this regard is clear.
Currently the United States is experiencing the lowest
percentage of families on welfare since 1967. Erie has also
experienced significant declines in the welfare caseload
subsequent to the implementation of welfare reform. Between
February 1997 and September 1999, Erie County has experienced a
decline of just over 50 percent in the number of families
receiving cash assistance. This community should be commended
for its role in helping to design this important bipartisan
policy shift.
Now without intending the imprudence of attributing all
good things to one cause, it may be worth mentioning that many
social indicators have been moving in a positive direction over
the last several years in Erie and as well as in the Nation.
Teen pregnancy and births have declined. Crime by both
juveniles and adults has declined with particularly steep drops
in violent crime. Violence in schools is down, and
substantiated child abuse is down.
However, we would be remiss not to mention that Erie County
still has the highest rate of child poverty of any third class
county in Pennsylvania.
I want to focus my specific comments very briefly on three
issues related in particular to poor children and their
families.
First, I want to discuss life after welfare reform. This is
the title of a research paper by Laura Lewis, a colleague and
faculty member at Mercyhurst College. She has been conducting a
series of in-depth interviews with 42 single mothers who have
left welfare for the work force since the implementation of
welfare reform.
Some mothers in Lewis' research report benefits of welfare
reform. Many study participants stated they want to work, feel
better about themselves as a result of working, and express a
preference for working over receiving cash assistance despite
facing continued economic difficulties.
Many mothers reported a sense that they are now better role
models to their children and that their children respect them
more. Many hope for a better future for themselves and their
children as a result of their entry into the work force.
However, we cannot ignore the fact that these mothers and
their children still face serious economic challenges. Over 40
percent of the subjects in the study--remember, these are all
women who have left welfare for work--had earnings below the
poverty threshold and over 80 percent had incomes below 125
percent of the poverty threshold.
The second issue I want to address has to do with the
effects of welfare reform on child development. Research from
both neuroscientists and developmental psychologists agree that
young children who are exposed to socially, linguistically and
cognitively deprived environments have strong disadvantages in
school readiness and subsequent opportunities for a positive
and productive life. Assuring a minimally adequate early day
care experience for the children of the single mothers we
require to work is not only our moral duty but sound social
policy as well. One way this can be accomplished is by
expanding Head Start or similar programs such as the Perry
Preschool program, and by encouraging such providers to also be
licensed as day care providers.
As an example of the effects of such programs a recent RAND
analysis reports that by age 27 those who participated in the
Perry Preschool program had incomes 60 percent higher than
similar individuals who did not receive the preschool services.
A very important policy aspect of welfare reform is the
trade-off between block grant flexibility and uncapped
entitlements. Our policy position served by welfare reform was
that those closest to the problems could solve them more
efficiently if given flexibility in the use of Federal funds.
One can consider this a good news/bad news arrangement. The bad
news is that States and localities no longer have uncapped
entitlements at their disposal. The good news is that the
capped block grants which replaced them allow for greater
flexibility. However, recent Federal regulations appear to be
undermining that arrangement.
Federal bureaucrats have promulgated regulations that will
require child-specific eligibility determination for the use of
TANF funds on behalf of abused or neglected children. Child-
specific eligibility is, of course, the hallmark of the
uncapped entitlement days. To invoke it under a block grant
policy is contrary to the spirit and intent of the new Federal/
State partnership. This move will make it extremely difficult
to use these funds on behalf of abused or neglected youth. It
will greatly expand the administrative and bureaucratic costs
associated with using the funds and as a result leave fewer
funds available to actually help abused children.
I would like these very brief comments to be considered
from the perspective that the social contract by which free
people endow a government with power and responsibility
requires both parties to the contract to live up to their
commitments. Women leaving welfare for work have demonstrated
their willingness to uphold their part of the contract. Now we
have to make welfare reform work for them and their children in
order to uphold our end. Thank you very much.
Mr. English. Thank you, Mr. Gamble.
[The prepared statement follows:]
Statement of Thomas J. Gamble, Mercyhurst College Civic Institute, and
Mercyhurst Center for Child and Family Policy
Good Afternoon Madame Chairman, and Members of the
Subcommittee on Human Resources of the Committee on Ways and
Means.
My name is Thomas J. Gamble. I am Director of the
Mercyhurst College Civic institute and Mercyhurst's Center for
Child and Family Policy. I have also been the director of child
welfare services for Erie County. Thank you for the opportunity
to address you this afternoon about this very important social
policy.
There is no question that welfare reform has been one of
the most significant social policy initiatives in recent years.
Most Americans believe that family self sufficiency through
productive labor is dignified and dignifying and that
responsible social policy should encourage it. Almost everyone
would agree that a connection to the workforce is a social
value for which we should strive. In general it is good for
society, good for individuals and good for families.
The impact of welfare reform in this regard is clear.
Nationwide the welfare caseload fell by 6.8 million recipients
from 14.1 million in January 1993 to 7.3 million in March 1999.
Currently, the United States is experiencing the lowest
percentage of families on welfare since 1967. While the
strength of the economy played a role in that, the Council of
Economic Advisors have concluded that welfare reform played a
more significant role.
Erie has also experienced significant declines in the
welfare caseload subsequent to the implementation of welfare
reform. Between February 1997 and September 1999, Erie County
has experienced a decline of just over 50% in the number of
families receiving cash assistance, from 14,375 to 7,152.
Without intending the imprudence of attributing all good
things to one cause, it may also be worth mentioning that many
social indicators have been moving in a positive direction over
the last several years in Erie as well as in the nation. Teen
pregnancy and births have declined, crime by both adults and
juveniles has declined with particularly steep drops in violent
crime, violence in schools is down, and substantiated child
abuse is down.
However, we would be remiss not to mention that Erie County
still has the highest rate of child poverty of any third class
county in PA.
Significant change to social policy is never easy and it is
particularly difficult when different parties control the
legislative and executive branch. This committee should be
commended for its role in helping to design this important
bipartisan policy shift.
I want to focus my specific comments on three issues
related to poor children and their families.
Life After Welfare Reform in Erie
First, I want to discuss ``Life After Welfare Reform.''
This is the title of a research paper by Laura Lewis, a
colleague and faculty member at Mercyhurst College. She has
been conducting a series of in-depth interviews with 42 single
mothers who have left welfare for the workforce since the
implementation of welfare reform in Pennsylvania.
Some mothers in Lewis' research report benefits of welfare
reform. Many study participants stated they want to work, feel
better about themselves as a result of working, and express a
preference for working over receiving cash assistance despite
facing continued economic difficulties.
Many mothers reported a sense that they are now better role
models to their children and that their children respect them
more. Many hope for a better future for themselves and their
children as a result of their entry into the workforce.
However, we cannot ignore the fact that these mothers and
their children still face very serious economic challenges.
Over 40% of the subjects in the study (these are all women who
have left welfare for work) had earnings below the poverty
threshold and over 80% had incomes below 125% of the poverty
threshold. The average salary for these women six months after
leaving welfare was below $7.00 per hour.
Many mothers voiced concerns about day care. While the
total number of slots in Erie appears to be adequate,
availability of second and third shift day care is a problem.
Also transportation is a serious challenge for many of these
mothers. Those of us with children can just imagine having to
wake the children up each night after they fall asleep to take
them to their child care arrangements.
Availability of Quality of Day Care and Adult Supervision
The second issue has to do with the effects on TANF on
child development. The strong and growing research linking the
quality of early environment to later social and cognitive
outcomes should not be ignored. Many neuroscientists and most
developmental psychologists agree that very young children who
are exposed to socially, linguistically and cognitively
deprived environments have strong disadvantages in school
readiness and subsequent opportunities for a satisfying and
productive life. Assuring a minimally adequate early day care
experience for the children of the single mothers we require to
work is not only our moral duty, but sound social policy as
well. One way this can be accomplished is by expanding Head
Start or similar programs such as the Perry Preschool program,
and by encouraging such providers to also be licensed as day
care providers. As an example of the effects of such programs a
recent RAND analysis reports that at age 27 participants in the
Perry Preschool program had incomes 60% higher than similar
individuals who did not receive the preschool services.
It is also clear that there is a strong relationship
between parental supervision and child behavior problems and
delinquency. Children from families in which parents know where
they are, whom they are with, what they are doing and when they
will come home are far less likely to engage in delinquent
behavior. Research also suggest that children are most likely
to engage in high-risk behaviors after school and before their
parents are home from work. Allowances should be made for after
school programs for preadolescent and adolescent children whose
parents are still at work when they get home from school.
Welfare Reform and Child Protection
A very important policy aspect of welfare reform was the
trade-off between block grant flexibility and uncapped
entitlements. The policy position served by welfare reforrn was
that those closest to the problems could solve them more
efficiently if given flexibility in the use of federal funds.
One can consider this a ``good news, bad news''
arrangement. The bad news is that states and localities no
longer have uncapped entitlements at their disposal, the good
news is that the capped block grants, which replaced them,
allows for greater flexibility.
Many have seen this as a rational tradeoff, and the sense
is that it has been working well. The federal government is
protected from unlimited expenditures that could result from
uncapped entitlements and states gain the ability to flexibly
respond to their needs.
However, very recent federal regulations appear to be
undermining that arrangement. Federal bureaucrats have
promulgated regulations that will require child specific
eligibility determination for the use of TANF funds on behalf
of abused or neglected children. Child specific eligibility is
of course a hallmark of the uncapped entitlement days. To
invoke it under a block grant policy is contrary to the spirit
and intent of the new federal-state partnership. This move will
make it extremely difficult to use these funds on behalf of
abused or neglected youth, it will greatly expand the
administrative and bureaucratic costs associated with using the
funds and as a result leave fewer funds available to actually
help abused children.
I would like these brief comments to be considered from the
perspective that the social contract by which free people endow
a government with power and responsibility requires both
parties to the contract to live up to their commitments'. Women
leaving welfare for work have demonstrated their willingness to
uphold their part of the contract, now we have to make welfare
reform work for them and their children in order to uphold our
end.
Thank you.
Mr. English. Mr. Cervone will come forward and testify.
STATEMENT OF GARY A. CERVONE, CHIEF ADMINISTRATIVE OFFICER,
MERCER COUNTY COMMUNITY ACTION AGENCY, SHARON, PENNSYLVANIA
Mr. Cervone. Thank you. Madam Chair, Members of the
Subcommittee, good afternoon. My name is Gary Cervone, I am the
chief administrative officer for the Mercer County Community
Action Agency, located in Sharon, Pennsylvania. First, let me
thank the Subcommittee for bringing this hearing to Erie and
let me commend Congressman Phil English for his work on this
Committee and his work on behalf of his constituents.
MCCAA is a 501(c)(3) private, nonprofit corporation and is
part of the national community action network. We were founded
in May 1966 and operate multiple programs with a budget in
excess of $4 million. Those programs include Head Start,
weatherization, low-income housing, consumer protection,
utility assistance and employment case management. It is our
experience in this last area that brings us here today.
We receive two specific grants related to welfare reform
efforts. The Commonwealth of Pennsylvania awards us a grant
under its supported work program. Our local Private Industry
Council, and now the subsequent Work Force Investment Board,
awards us a welfare-to-work grant. It is our experience in
these two programs, along with our 33 years working with poor
people that form the basis of our comments today.
First and foremost, community action agencies believe that
the best programs are those which are designed locally and
which allow the greatest flexibility. Unfortunately, that is
not the case with the current Federal welfare-to-work programs.
Two barriers make it difficult to achieve success. First, the
eligibility guidelines are too restrictive. Since we received
the welfare-to-work grant, our local County Board of Assistance
has been able to send us five referrals. When asked about this,
they told us that the guidelines require that referrals meet
multiple criteria and that they must meet the majority of those
criteria.
Rather than bore you with specific regulatory references,
the ideal client by regulation for this program would be a TANF
recipient with a below ninth grade reading level who is a drug
user and who has been receiving welfare for 30 months.
It is not enough to be just a recipient; it is not enough
to just be struggling at a below ninth grade level. It is not
enough to be just a drug user. The regulations require that you
must be all three. The first message we wish to deliver today
is that these regulations need change. The word ``and'', which
connects these multiple criteria must be changed to the word
``or'' so that clients can be served and placed in jobs.
Let me now move to my second point. Listen to this list.
Supported Work, Single Point of Contact, Welfare to Work, Rapid
Attachment, Work Activities Expansion, Upfront Job Placement,
Upfront Directed Search. These, and there are even more, are
all names of programs funded to address welfare reform and job
placement. There are just too many programs all attempting to
recruit the same clients. And that means multiple bureaucracies
and systems.
The Commonwealth of Pennsylvania has instituted the
Supported Work Program. Although complex, it has two overriding
principles. Let's get people working first and let's provide
them with ongoing support while they are working. MCCAA has
placed 75 percent of the clients that have completed this
program in jobs. And they are still in those jobs 90 and 180
days later. Sixteen (16) of those individuals have become self-
sufficient and no longer receive any public assistance.
We believe that welfare reform should look at this model.
You learn about work by working. However, you must have a human
being that you know will be there for you when you get
frustrated over transportation or child care or a multitude of
other problems that might occur. Supported work provides that
ongoing follow-up and assistance. We believe supported style
programs should be the focal point of welfare reform efforts.
It is our intent to keep our comments brief today and our
message simple. Loosen the current eligibility criteria. Stop
creating new programs that complicate the system. Increase
funding to existing programs that have a proven track record.
I thank you for this opportunity and would be glad to
answer any questions to the best of my ability.
Mr. English. Thank you, Mr. Cervone.
[The prepared statement follows:]
Statement of Gary A. Cervone, Chief Administrative Officer, Mercer
County Community Action Agency, Sharon, Pennsylvania
My name is Gary Cervone. I am the Chief Administrative
Officer of the Mercer County Community Action Agency, located
in Sharon, Pa. First, let me thank the Subcommittee for
bringing this hearing to Erie, Pa. and let me commend
Congressman Phil English for his work on this committee and his
work on behalf of his constituents.
MCCAA is a 501(c)(3) non-profit corporation and is part of
the national community action network. We were founded in May
of 1966 and operate multiple programs with a budget in excess
of $4 million. Those programs include Head Start,
weatherization, low-income housing, consumer protection,
utility assistance, and employment case management. It is our
experience in this last area that brings us here today.
We receive two specific grants related to welfare reform
efforts. The Commonwealth of Pennsylvania awards us a grant
under its supported work program. Our local Private Industry
Council, and now the subsequent Workforce Investment Board,
awards us a Welfare-to-Work grant. It is our experience in
those two programs, along with our 33 years working with poor
people that form the basis of our comments today.
First, and foremost, community action agencies believe that
the best programs are those which are designed locally and
which allow the greatest flexibility. Unfortunately, that is
not the case with the current federal welfare to work programs.
Two barriers make it difficult to achieve success. First, the
eligibility guidelines are too restrictive. Since we received
the Welfare-to-Work grant, our local County Board of Assistance
has been able to send us five (5) referrals. When asked about
this, they told us that the guidelines require that referrals
meet multiple criteria and that they must meet the majority of
those criteria.
Rather than bore you with specific regulatory references,
the ideal client by regulation for this program would be a TANF
recipient with a below 9th grade reading level who is a drug
user and who has been receiving welfare for 30 months. It is
not enough to be just a recipient; it is not enough to just be
struggling at a below 9th grade level; it is not enough to be
just a drub user. The regulations require that you must be all
three. The first message we wish to deliver today is that these
regulations need changed. The word ``and'' which connects these
multiple criteria must be changed to the word ``or'' so that
clients can be served and placed in jobs.
Let me now move to my second point. Listen to this list:
Supported Work; Single Point of Contact; Welfare to Work; Rapid
Attachment; Work Activities Expansion; Upfront Job Placement;
Up Front Directed Search. These, and there are even more, are
all names of programs funded to address welfare reform and job
placement. There are just too many programs all attempting to
recruit the same clients. And that means multiple bureaucracies
and systems.
The Commonwealth of Pennsylvania has instituted the
Supported Work Program. Although complex, it has two overriding
principles. Let's get people working first and let's provide
them with ongoing support while they are working. MCCAA has
placed 75% of the clients that have completed that program in
jobs. And they are still in those jobs 90 and 180 days later.
Sixteen (16) of those individuals have become self sufficient
and no longer receive any public assistance.
We believe that welfare reform should look at this model.
You learn about work by working. However, you must have a human
being that you know will be there for you when you get
frustrated over transportation, or child-care, or a multitude
of other problems that might occur. Supported work provides
that ongoing follow up and assistance. We believe supported
style programs should be the focal point of welfare reform
efforts.
It is our intent to keep our comments brief today and our
message simple. Loosen the current eligibility criteria. Stop
creating new programs that complicate the system. Increase
funding to existing programs that have a proven track record.
I thank you for this opportunity and would be glad to
answer any questions to the best of my ability.
Mr. English. Ms. Bechtold, thank you for being here and I'd
like to yield to you for your testimony.
STATEMENT OF KAREN L. BECHTOLD, OWNER/OPERATOR, McDONALD'S,
ERIE, PENNSYLVANIA
Ms. Bechtold. First of all, I'd like to thank you for
inviting me. I don't have a lot of prepared work. My experience
and my testimony is going to be more or less from the
employer's point of view, what happens to these people when
they leave the program when they go out to work. My experience
was that everything that has been said here today is virtually
true. They come into our programs. The first thing they do is
they start working. They cost me just off the street as a crew
person $550 just to train a crew person. I have a management
program that I've been working with and developing for the last
5 years. It takes time to become a restaurant manager, anywhere
from 2 to 5 years.
And my opinion on that is we have to be able to work with
these people as employers. We have to be able to support them
so if we have a young mother with children it's going to take
her longer to go through this program which has flexible hours.
She's got a lot of learning to do. And one of the big problems
that I run into, especially for young mothers, is the medical
and the child care. Mothers come to work. Unfortunately their
kids get sick, and who's going to watch their kids?
Once they start averaging a weekly schedule of over 22 to
25 hours, the first big problem that comes up is I cannot work
more than this because that seems to be the point where the
benefits start to drop. It's the child care and the medical and
that because of the income. Because it's not what people think,
it's not really the hourly wage that they earn. It's the
accumulation of wages. Once they start making the--and it's not
even a good salary or a good wage--once they start to
accumulate the annual income, that's when you start losing
benefits. My request for you people is to please find a way to
work with these people on training programs. If I need 3 to 5
years to train a person, they have to be able to rely on these
benefits 3 to 5 years.
Now, I've known a lot of training programs through the
years that the State of Pennsylvania has run. I'm not saying
they're bad programs but they're not for everyone. Jobs in my
industry are very specialized. You know, you can't go to a
training program and come to be a manager at McDonald's.
McDonald's managers are specially trained. I think McDonald's
and a lot of businesses like us have quite a few people out
there. Over 40 percent of the population at one time has worked
at McDonald's. The benefit to that is the flexible hours. We
have people who come through our doors that have worked nights
and weekends and gone on to college and we really are very
proud of where some of our persons have gone. I have got people
in my restaurants right now that it's quite a struggle on how
much they make. You know, when can they work and not work
because of this benefit.
The other thing that I would like to bring to your
attention is that some of these programs are costing us as
employers. There's the welfare-to-work program, there's the job
tax credit programs. I myself am not using any of them. I'm a
small business. I can't keep up with the paperwork. I've
literally hired a person to do nothing. Three days a week she
just simply fills out wage information and all the other forms
that come from all over, you know, different departments.
Paperwork is killing me. I know many small businesses will tell
you that. We turn in these quarterly reports on computer disks.
We've done everything that the Government has asked of us. Why
do I have to have somebody sitting there?
I get anywhere from 15 to 30 envelopes in 3 days of forms
that we filled out on individuals. I don't understand when I'm
turning in all those tax reports why you can't simply press a
button on a computer. I could sit in my office from my home for
that matter on my computer and see what's going on in my
restaurant. I am just a small person. Why can't the Government
help me out here?
I think the other thing is that I really would like to see
a partnership between the Government and employers to help to
train these people, especially employers like myself who are
willing to work with young mothers and help them get into
programs. McDonald's is not just an entry-level job like what
most people think. I can tell you that most of the people that
I know that are anywhere in the position like mine or my
husband's, started out as a crew person. Those jobs end up
being careers. And that's pretty much what I had to say and I'd
be happy to answer any questions.
[The prepared letter follows:]
McDonald's
Erie, PA, November 9, 1999.
The Honorable Nancy L. Johnson
Chairman, Committee on Ways and Means
U.S. House of Representatives
Washington, D.C.
Dear Chairman Johnson:
In response to your request for a written statement, I
respectfully submit the following. I have never attempted
anything like this before so please forgive the format.
Welfare Reform in this country is a subject very near and
dear to my heart. I have either worked with, personally know,
employed or have been related to many young women desperately
looking for ``a way out.'' What happens to many of these young
people, unfortunately, happens when they attempt to go to full-
time employment.
Most all of my experience is with the Pennsylvania
Department of Welfare. Once a young mother finds a job (and
there are many entry-level positions out here), the first
obstacle they face is a reduction in related benefits. The
biggest of which is health care for themselves and their
children. Most of the women coming to us are unskilled. I, as
an employer, must spend a lot of time and money training them.
Because our crew and management positions are very specialized,
there are few to no applicants coming to us who can step in and
do the job.
If a woman wants a crew position to start, the first
accommodation we must make is to limit the amount of hours she
(and sometimes he) can work. If the total hours worked are in
the area of 22 or more, they lose their food stamps, medical
coverage and child care benefits. In some cases, the caseworker
is actually encouraging the person not to work. These people
end up back in the ``SYSTEM.'' This limited time on the job
does not allow us to train and promote at a wage or benefit
level we as a small business can afford. I do offer an
insurance program, but even I admit for the cost to the
employee the coverage is very limited.
Childcare needs are put at the bottom of the Title 20 list.
Just simply because they have income. The need for childcare,
in the State's eye is not urgent enough to help in the
beginning.
An objective from an employer's point of view would be to
support both the person and the employer with the help up
front. I have worked with, helped and been part of the current
system for over 25 years. I have seen many training programs
over the years fail only because when the person is ready to
work, financially they and the employer can not afford to make
it work.
Employers can be an asset to Reform only if the government
allows us to be part of it by:
1. Entry-level positions
2. On-the job training programs
3. Provide for training and promotion time tables
4. Fair wages, promotions, wage increases and benefits as
the person grows with our companies
5. Providing jobs that become Careers for these people
The government must provide the following for a successful
program:
1. Good and immediate childcare until finances allow for
private monies
2. Assisting the person with continued medical benefits
until they have reached a position in our company where we can
provide for it for them
3. Continued job-tax credits without expiration dates for
us until the training has been completed
These jobs are available right now throughout this state
and the country. We are all ``hiring above minimum wage.'' But
because the people stand to lose too much, Reform as it is
right now does not allow the employee or the employer the
chance to make it work.
The training program and benefit package I am talking about
has been in place in my company for over 5 years. Right now I
have at least 10 to 15 management trainee positions available.
I have seen successful applicants, of whom I am very proud, but
they are far and few between. More often than not, these young
mothers quit, simply because they become discouraged and are
financially unable to continue. It should be a crime in this
country when we actually hinder people's chances to succeed and
turn them away from a bright future when all along we make them
feel bad because welfare reform is mandated by our government.
All I am requesting of your Committee is to allow a good system
to work. I know that through a partnership between government
and private business we can make this work together. When you
see the pride and self-confidence these programs provide a
person, success is a wonderful feeling.
Thank you for the opportunity allowing me to express my
heart-felt thoughts here today.
Respectfully submitted,
Karen L. Bechtold
Owner/Operator
Mr. English. Thank you so much. And if you don't mind I
would like to start with you because you raised an interesting
point. The whole question of are the tax credits effective. We
have put into place a work opportunity tax credit and the
welfare-to-work tax credit that presumably are complementary. I
find that a lot of businesses, particularly smaller businesses,
get confused over whether, in fact, an employee is going to be
eligible for a tax credit. Is there a--beyond simply extending
the tax credits for a longer period of time or maybe even
permanently, is there a way of making them or designing them to
be more effective? How did you learn about programs like tax
credits? And I guess--is there a better way that we can share
information with the employer?
Ms. Bechtold. I learned about the program through
McDonald's corporate. We're a networking type of corporation
and what they do they pass it on to us. To make it easier to
work with, it's probably too much paperwork. I can't do it.
Half the time I can't figure it out so I have to send it to a
CPA to keep up with it. If I try to sit and track all that
information--I just get lost. I don't understand it so I pay
someone to do it for me. Candidly as far as individuals, the
reports come in. I use a company, ABG, or maybe they were
bought out by someone else, who when a person comes in for an
interview, they make a phone call, an 800 phone call then
there's a series of questions asked. It's very confidential.
There's nobody around. The questions are asked. Then the
company takes over from there. You know, they get engrossed
with certification and at the end of the quarter they get that
information back.
I will tell you that I have dropped the program because
it's no longer financially to my benefit. It's costing me more
to keep it than it is to collect the tax credits. And part of
that being we were getting one credit for Federal amounts
limiting the State, and you know, not knowing whether or not
it's going to be renewed and all that. That's just for anybody
in here. We don't have any people qualified anymore to continue
that.
Mr. English. That's useful. Now, I notice jumping through
this while one of the things you offered as a solution was to
more directly--a solution to the problem of leaving the welfare
system for work is to provide better access in a community like
this, transportation services. And I was wondering if you might
amplify on that as you did in your submitted testimony. I know
that we have a great transportation company whom I work closely
with which has a limited amount of money for a limited number
of routes. I think that reflects State policy in Pennsylvania
on reimbursements. The bulk only goes from Pittsburgh and
Philadelphia. And it's more difficult for a small company to
operate a full set of routes. Is there a solution and what--I
know GECAC is very proactive on these things. What are you
looking to provide as an opportunity?
Mr. Wiley. Well, Congressman, we do a lot of extensive job
training and so we know our employer base in this metropolitan
area in Erie. And we've had a lot of employment expansion
outside of the city of Erie. Classics, for example, and other
little small shops. And they have a crying need for workers.
They have a crying need for workers, for trained workers. So we
are at one end of the puzzle. We can train them. We can help
them with some training, go into a shop, help them with some
training, 8 weeks of training and even reimburse them for the
training. But what we couldn't do was help them get the
prospective employee to the job. So that was a problem for so
many of our clients that one of the things that I did was
contacted Senator Santorum and met with him and then I met with
the staff and asked them if they could help us, on a one-time
basis, find some Federal monies to purchase some maintenance
equipment in order to transport these people. We had employers
that could tell you, if you could transport them out here I
will pay you a fee for transporting. So that's a real problem,
particularly in the outlying areas. And I'm hoping that we can
secure some----
Mr. English. For a community this size if there were some
flexible program that will allow someone to set up this kind of
service aimed at the target population, that might address one
of the problems.
Mr. Wiley. I believe so. I believe it would.
Mr. English. Mr. Gamble, one of the things that is common
in your testimony, Mr. Wiley's and Mr. Cervone's is the value
of local flexibility. Then in your testimony you talk about how
some of the programs that are designed for statewide
application really are designed without Erie in mind. Tom, in
your testimony you highlight the value of local flexibility.
Starting with Tom and then Gary and then Ben, do you want to
amplify on that and where do you think the priorities should be
in provided local flexibility.
Mr. Gamble. Thank you for your question. I really think
that what we have is a situation in which there was, as I said,
a good news/bad news arrangement between the States and Federal
Government whether the bad news was you should use that capital
entitlement. The good news is you get flexibility, but then the
really bad news is now there's this sort of attenuation of the
flexibility. Without the flexibility, the law can't require
them, which, of course, is worse. And so what we really do need
is in relationship to both the State/Federal relationship and
the State/local relationship is sort of the position of trust
that folks closest to the problem are best able to define that
problem and then respond to that problem. And instead of
measuring a whole lot of activities and requirements maybe we
could just measure the outcomes of those activities and to see
whether or not it's moving in the direction that we find useful
to the communities and to representatives.
Mr. English. Mr. Cervone.
Mr. Cervone. I concur with Mr. Gamble here. I think
providing us--we know our employers. We know our clients. We
know our community. We're networking for our community.
Providing us with the flexibility to work these programs in
such a manner and fashion to achieve the highest degree of
success would be most beneficial. It's (outcome management)
been federally legislated and we are part of the results
oriented management and accountability system of evaluation as
reported. What Mr. Gamble says is right on point there. Take a
look at the big picture. Focus on the outcomes. Give us the
flexibility to achieve those outcomes without placing any
barriers or obstacles and get the job done.
Mr. English. Mr. Wiley, any further comments?
Mr. Wiley. One of the things discussed earlier with
Secretary Houstoun just the terms of the welfare reform,
welfare and intensive case management, one of the things that
the initial county welfare didn't provide. I can understand
from her perspective looking at a State as big as Pennsylvania
walking out in the water and trying to test it and trying--but
when we looked at the initial realm of the welfare reform, this
whole case management, we felt a lot of the programs wouldn't
do good if they didn't vote for it. However we needed a little
bit more flexibility. I went directly to her and talked to her
about that, you know, and she allowed us more flexibility. And
when you talk about the very hard-to-serve, the worse cases of
the welfare reform, you have to be actively out there in those
homes, because the very person that you're trying to reform,
help them with their employability skills, help them get a job,
help them overcome living barriers, they're in a home where
there's a whole lot of other problems going on. Generally
they're negative. And so it's that we were deciding we need to
do more than just work with a client. We need to know what the
environment of the client is. So on this conversation of
flexibility, well, that was not something built into the
initial welfare reform. When we went to the Secretary and made
a plea, she was very compassionate and listened and we were
able to have that flexibility.
Mr. English. Thank you. I'd like you to go to Mr. Coyne for
questions.
Mr. Coyne. Thank you very much, Phil. Mr. Cervone, in your
testimony you urged that we would increase funding for those
programs that are proven and that have worked. I wonder if you
would cite what they are in your judgment.
Mr. Cervone. We think that we would be quite successful in
operating a welfare-to-work program if we could get the
sufficient number of referrals we would need. We've been quite
successful in our State funding supported work programs. To
speak to the success of the other programs and to put that into
some kind of perspective, I must admit that I'm not familiar
with all of the particular workings of those and what their
individual success rates are. I can provide you with that
information, but I'm not able to comment on that right now.
Mr. English. I wish you would be able to submit that. I'd
be interested in knowing what you think programs have worked so
far and deserve increased funding.
[The information follows:]
Clarifications to Statement
We are pleased to submit the enclosed clarifications to our
testimony.
In response to the Committee's request for additional
information, we submit the following base line data: This
information is for the period of July 1, 1998 to June 30, 1999.
(Note: Cases closed includes clients who have dropped out;
clients who are no longer eligible; clients who have completed
activities but not secured employment and clients who are
employed full or part-time, even if case management services
are still being provided.) Percent = number placed/cases closed
Supported Work Program
Enrolled: 67
Cases closed: 61
Number placed: 45
Percent: 74%
Welfare to Work
Enrolled: 8
Cases closed: 6
Number placed: 4
Percent: 67%
Single Point of Contact (SPOC)
Enrolled: 124
Cases closed: 110
Number Placed: 78
Percent: 71%
Upfront Job Placement/Directed Job Search
Enrolled: 75
Cases closed: 69
Number placed: 59
Percent: 86%
Rapid Attachment/Job Advancement (Work Activity Expansion)
Performance based contracts. Services provided by private
sector vendor. March 1998 to August 1998
Enrolled: 155
Cases closed: NA
Number placed: 100
Percent: 65%
Funding sources and amounts vary.
Client eligibility criteria vary.
Services provided and duration of programs vary.
We appreciate the opportunity to provide testimony to the
Committee.
Please do not hesitate to contact me for questions or
additional information.
Mr. English. Do any of the panelists have any idea what a
single mother, single parent in this region here pays for
weekly child care programs per week?
Ms. Bechtold. Per week? Average per month was anywhere
between $325----
Mr. Coyne. Would you speak up?
Ms. Bechtold. Average per month for a single mother is
anywhere between $325 to $400 a month.
Mr. Coyne. A month?
Ms. Bechtold. A month. Yes, and it depends on how many
weeks in a month so----
Mr. Coyne. Is that from your experience?
Ms. Bechtold. Yes.
Mr. Coyne. Mr. Wiley, in your testimony you pointed out
that welfare reform caused the average income of poor single-
mother families to drop and halted progress in reducing child
poverty according to a new report from the Center of Budget and
policy priorities. Of course, single parent families, those at
55 percent of the Federal poverty level experience an income
loss even with the income of all the others in the household
accounted for. We're citing the study of the Center of Budget
and Policy Priorities, but I wonder if it is your experience
that that would be the case and the rest of the panelists to
take care of the Commonwealth.
Mr. Wiley. Representative, in my testimony the only reason
why I used that information is because a lot of what we were
finding out in the programs that we were implementing here in
Erie. And being a person in Erie around town and knowing a lot
of people, I run into mothers almost on a daily basis. All I
have to do was just walk up the street. I run into mothers on a
daily basis who have this problem. Now they're working but they
can't make enough money to make ends meet. The child care is
killing them. Finding the resources to pay for child care while
they're working is a big thing.
Mr. Coyne. Well, of course, that's why Chairman Johnson and
Phil English tried to be here in Erie for people to be better
served, not only in Erie but across the country. And it's
important to know from people who work in the field every day,
who deal with these areas of problems what progress is being
made and what we need to improve. So thank you for your
testimony.
Mr. English. Thank you. Madam Chair?
Chairman Johnson. Yes. Thank you, panel, for those
comments. They've been very helpful. Mr. Wiley, it's my
understanding that in Pennsylvania a woman on welfare with two
children gets cash assistance and food stamps worth about
$8,500.
Mr. Wiley. That's correct.
Chairman Johnson. If she were to work full time at minimum
wage she'd earn about $10,000 a year, she'd still be eligible
for food stamps. She'd get $4,000 in earned income tax credits
so she'd have an income of about $15,000 here. Why is she not
better off than on welfare?
Mr. Wiley. Because of the--I think the way you described
it, the way we described it was written is not the way when we
implemented the program that it actually worked with people in
Erie. We have women in Erie who were coming off the welfare
rolls going onto employment and automatically losing 50 percent
of their benefits.
Chairman Johnson. But if they're getting a check that's
more than 50 percent of the benefit, that will grow and they're
better off.
Mr. Wiley. Well, it depends on what category you're in.
Chairman Johnson. Like our research--our data nationally
are that if you work half time and the State delivers the
benefit that welfare reform contained, which includes food
stamps and Medicaid for 2 years, you are definitely better off.
So I really regret that your testimony indicates you're worse
off now. It appears to me as a national overseer of this plan
that some States are not being--not able to deliver food stamps
and Medicaid, and I'm glad to see you picked up on that program
and are turning that around. I consider that just a problem of
change. The States--I have written to them as chairman and I
see most States turning it around, but we're going to hold some
hearings on this in February as well. But it is not the law
that's at fault. That's a system change problem.
I think it is important to have on the record that any
woman in this area of Pennsylvania that moves from welfare to a
minimum wage job goes from an income of $8,500 to an income of
$15,000 and for 2 years is guaranteed Medicaid benefits. I
think the problem you're seeing and the stress created on women
is day care. The subsidy dollars for day care are there.
There's $8 billion in TANF money that the States have not drawn
down.
It's hard to get a new program in place, but the Welfare
Reform Law is really an incredibly good law. You just have to
figure out how to use it. And day care subsidies, one of the
reasons that Congress is appropriating more dollars for day
care is because the dollars haven't been drawn down across the
Nation.
We have allocated a lot more money for Head Start, for
Early Start, for preschool education because I think the
point--I think it was Mr. Gamble that made the point that
parental involvement, that supervision of children was terribly
important. And Head Start and some of our preschool programs
involve parents. These programs can go to full day programs. It
is extremely important for them to succeed in welfare reform in
getting those pieces synchronized at the local level. Of
course, one of the things we heard today that was very
distressing and we are hearing nationwide is the difficulty of
putting in place a day care, especially in swing shifts and
dealing with problems of sick children. I do hope that we can
make some advancement in that mostly at the State level.
That leads me back to this transportation issue. I was very
interested that one of you testified that the temporary
agency--I think it was you, Mr. Wiley, the temporary agencies
were pretty good at providing money for transportation to
clients as long as they were in their payroll. There is no
barrier to the State continuing to pay those transportation
costs. And yet they've got a contract with a temporary
employment agency to continue to provide the transportation
after the agency is no longer involved for that case. Because
you're absolutely right, the support services and expanding
them and tailoring them out at the same rate we tailor them a
more permanent solution, is really critical. But there is no
barrier in Federal law to continuing those transportation
subsidies after the contracted agency just as it was possible
to reimburse probably 100 who contracted with that agency. And
I did appreciate your testimony, Mr. Cervone is it?
Mr. Cervone. Cervone (corrects pronunciation).
Chairman Johnson. In regards to other programs I think it's
very important not to create a new program for every little
sector. Some of your comments, those of you who commented on
regulatory complexity that's driving you batty and created
programs and then can't find anyone to participate, you will be
happy to know that last week on the floor of the House we did
change those ``ands'' to ``or''. And we did open up that 30
percent so it's far more flexible and even can serve people
below 100 percent poverty income who are not on TANF. One of
the inequities we created was better services for poor people
who went on welfare and poor people who couldn't go on welfare
but have the same income.
So we do have to try to get that through the Senate. We
hope that that will happen this week and if not then it would
happen in the early months of next year. But I think you'll
find that in
welfare-to-work issues that we are creating the flexibility we
need and at the State level I think we all need to think about
the outcome. How often are you creating new programs as you
meet new problems rather than just keeping flexibility within
your own program.
I did want to mention that really all of that data shows
that people are much better off working even if they're working
half time and on welfare half the time. And if they're not
doing better as opposed to having higher income it's because we
aren't delivering the Medicaid benefits they're eligible for.
We aren't delivering the day care subsidies that they're
eligible for. And, in fact, with welfare, if the casework drops
40 percent that's big money. Even if every one of those 40
percent people are still on half their benefit subsidy, you
still have that whole half subsidy for day care and
transportation and job training. So, I think when we see people
not happy, when we see them not making progress, we have to ask
ourselves what do we do different because the data is just
overwhelming that when you say are those people better off on
welfare and the answer is no. I ask that the answer is yes.
The national data is that poverty has declined every year
for 4 years in poverty among children. This is unprecedented.
I'm not just saying this because I like to hear myself talk.
We have got to understand this is the first social program
ever to emanate in America that actually has reduced poverty
among children. And poverty among minority children last year,
the most of any group. So it is having an effect. Now, that
doesn't mean it can't do a lot better. It doesn't mean it can't
do better particularly in terms of the future and the idea of
career development and salary growth so that you aren't just
struggling, barely surviving.
I did appreciate some of your comments, Mr. Gamble and Mr.
Cervone, you both mentioned that children are not getting good
role models of self. So I believe the testimony of Mr. Wiley
about all of the benefits of their parents feeling a lot better
about themselves. So there are an enormous number of benefits
here and we need to make sure that we acknowledge those
benefits, so we don't discourage people or discourage
ourselves. And so that we restore people's faith in the
partnership between government and people. That really is what
freedom is all about. This is a big win. This is a big win for
government in partnership between government and people. Now it
does have problems, but it's a far better solution that I think
we have come across. So I appreciate your comments and also
appreciate the opportunity to put on the record the enormous
progress that has been made.
Let me also say that I am one that's very interested in
case management and I enjoyed your comments on that. It also is
an approach that isn't necessary for a lot of folks. So you do
have resources. You can do that. The law is flexible now so you
can--and just this week you already have mental health benefits
and I notice your youth program really was focusing on some of
that. That challenge of identifying the critical families or
the families with complex needs, therefore they need case
management, is just really--you have the right to do that. I'm
sure you'll have the resources to address that.
Last, let me say to the panel, that it's so discouraging to
hear that we can't take advantage of the work opportunities.
We've tried over and over again to simplify it.
When we do the extender package we're trying to get a
longer extension. So even though we can certainly--when we're
working toward 5 years, whether we make it this year, but we
hope at least by next year, to get an extension in there that
will give you long-term confidence. And then you can take
advantage of a lot of it, because we have simplified the
eligibility criteria. So that you hopefully won't need to hire
a company, but just your local welfare office will be able to
tell you, hopefully through the electronic system, whether
somebody is eligible or not.
It is important that we recognize your tax liability for
training you provide to entry level people because you are one
of the ones, that offers career ladder, and that is very
important.
I would also just say at this problem of the 22-hour limit.
We need to sit down with the welfare people about that because
there's nothing like that in the law. What's happening is this
issue of being scared--if I go further this will or that will
happen. And as part of this support system being clear enough
to the recipient and visible enough that people will move
forward. It used to be that you lost your day care that day and
then you had to stand in line for benefits in the next line.
That's why people didn't want to take that risk. That State
actually has just changed that so the continuity in the
benefits that you have now, and in the next program will be
there to make that confidence that was there. So I think you
will find that--and I think the people need to know that if
they go back and talk to their worker, that 22-hour barrier is
not a barrier. And they should be able to move forward. So we
will take back all the comments you made about flexibility and
new challenges and day care and transportation challenges and
think about those as we work on this program next year.
Mr. English. Thank you, Madam Chair. Let me state our time
has now expired, so I want to thank the panelists. Mr. Wiley.
Mr. Wiley. I just have one comment in response to the
panel. Now, I think that in the Commonwealth of Pennsylvania we
have come a long way. We have done a lot in a short period of
time in the area of welfare reform and there are probably some
things that we can do better. But I know now that the State has
had a chance to look at all of our initiatives the first time
around and I'm sure that some of what you've heard from us
today will be responded to, and some of it as we speak and
responded to it. So I'm very encouraged and I have high hopes
here in Pennsylvania.
Mr. English. Well, we appreciate your testimony and that of
all of the panelists. I also want to thank Secretary Houstoun
for participating today and giving us an extraordinarily
detailed outline of what the State is doing. It's a very
impressive record in dealing with the subject that requires the
wisdom of Solomon and we appreciate what you're doing more than
anyone because of our involvement in the welfare reform process
from the legislative end, which is actually much easier.
I want to thank Chairman Johnson for bringing the
Subcommittee to Erie and hearing first hand how welfare reform
has progressed and I want to thank my colleague, Mr. Coyne, for
coming up from Pittsburgh and taking time out from his busy
schedule to participate.
I want to thank everyone in the audience for coming here
and listening and let me say although our time now has expired,
I would like to invite all of you who have feelings on this
subject who have experienced this or are aware of this problem
and have your own take on it to submit a statement to my office
in the next week and I will make sure that it is passed on to
the other Members of our Subcommittee.
I also want to extend that to those in our listening
audience who have been following this hearing. My phone number
at my local office is 456-2038. That's 456-2038. I would
welcome your comments in writing or in person and we will make
sure that all of the Members of the Subcommittee have the
benefit of them.
I would also, in conclusion, like to thank several other
people. Doctor Ron Haskins (phonetic) who did a lot of the
staff work and who heads our staff for the Human Resources
Subcommittee, who has been an enormous font of information on
this subject and is really committed to seeing welfare reform
through and making it work.
From my staff, Jennifer Krause, who I'm sorry to say is
going to be leaving by the end of the month to go to work for
the Governor. Vicky Steiner from my staff, who's been very
helpful today and I'd also like to thank the city of Erie and
especially Mr. Gary Portland, the mayoral assistant, for
arranging this hearing and also the Erie County Board of
Assistance for allowing Chairman Johnson and me earlier today
to come down, tour their headquarters and meet some of the
people who are directly involved in helping people get out of
the welfare system.
This has been a real eye opener for us and we very much
appreciate the opportunity to have been able to do this today.
This has been an effort that will yield many results in
Washington and we thank the Madam Chair and with that I close
this hearing.
Chairman Johnson. May I just kind of--before you close the
hearing one person you didn't thank was yourself and I realize
that's awkward and I would like to just say to the audience we
have Members of Congress who have an enormous number of
responsibilities in defense technology and strategy and across
the board tax policy and trade policy and education and health
care and a whole array of issues.
And my colleague, Mr. English, has simply taken an
unusually deep interest in these issues. And it's because he
does, in the normal course of his life, visit these agencies,
talk with people he met with today and follow your thinking of
these matters throughout the course of the hearing that we are
here today. That kind of member can afford us the opportunity
to come into a community for a few hours and we really get very
good testimony and very good frontline advice. And I really
appreciate his dedication and the in-depth work he does year in
and year out because it is as a consequence of that that we are
here. We could not do this hearing in every district, but we
get out of this what we need to help direct national policy.
So, Phil, I thank you very much for not only working to make
this hearing possible but for your service as a congressman on
our Subcommittee.
Mr. English. Thank you. And with that the record is closed.
Thank you.
[Whereupon, at 2:11 p.m., the hearing was adjourned.]