16

caseload at the outset. While the cases are constantly coming and
going, we have actually serviced more than 12,000 such families

luring the past 2 years. Of them, nearly 10,000 were referred to
community service sites and nearly 4,000 opted for work before be-
ginning any community service. Of those who do enter community
service, the average stay is around 4 months before they too enter
the private work force. Approximately 9,000 of the 12,000 cases
have been closed due to an increase in their earnings.

Not all who are required to participate have been willing volun-
teers, but they have constituted a minority. Despite their relativel
small numbers, they remain a segment which must be dealt wit
sternly in order to achieve our goal of propelling them toward self-
sufficiency.

My department has penalized approximately 735 cases in 2 years
for none participation. Of that number, approximately 20 percent
subsequently agreed to cooperate; 25 percent remained penalized;
and 55 percent closed their cases for another reason.

Massachusetts does not favor penalizing anyone, but it recog-
nizes it is an affirmative tool in our bit to reshape the multi-
generational mindset of dependency that has existed for 60 years
in this country. Children who never witnessed a parent go out the
door to work are seeing a different picture now and that is the real
meaning of welfare reform. It is not strictly a matter of dollars and
cents. It is about encouraging able-bodied parents to not only pro-
vide for their own children, but set an example for them. Until
now, too many of the examples were negative.

By introducing work-related programs and strictly enforcing
them, recipients and taxpayers alike know that Massachusetts is
serious about welfare reform and will not tolerate noncompliance.

The benefits of the TEMP-UP Program are apparent on three
levels. For the welfare recipient, devise access to the world of work
in the beginning of a resume. The nonprofit agencies which is the
private sector we primarily worked with, it helps expand a work
force that can provide more services to the community. And to the
taxpayer, it demonstrates responsibility and accountability.

A Boston area hospital typifies the hope that springs from the
community service. The director of volunteer services met with the
heads of all departments and asked them to develop a wish list of
job descriptions to be filled by TEMP-UP volunteers. As a result,
new positions that managers felt were lacking were created and in
the long run, this hospital has hired five TEMP-UP volunteers as
permanent employees.

A recent survey of volunteers and agencies revealed that 97 per-
cent of the volunteers and 100 percent of the providers believed the
program was helpful to the community service organizations, while
79 percent of the volunteers and 100 percent of the site supervisors
believed that the recipients were learning skills to better prepare
them for entry into the paid work force.

In hindsight, there is universal agreement that Massachusetts
TEMP-UP has a positive impact on the lives of welfare recipients.
That notion, however, was not always shared as some agencies
balked at participating in what they considered workfare equal to
slave fare. Today, nearly 2,000 agencies in the Commonwealth are
changing their lives by realizing its potential value.


37

AFDC RECIPIENT COUNT & BENEFITS ISSUED

on

ss

sor

“7

8

&

g 8

JANUARY 1994-1995 - REV
FOND DU LAC
‘APOC REGULAR ED AFDC TOTAL

Month Cases Chiiren Persons Payments CamenChildran Persons Payments Capae_ Children Persons Payments
sire 1799 $2n4208 tae 8.806 71829 2898 ss48.00
woe 469 s2ra27 0588 nhs Ter 1400 2.203 ssse.209
16s 178 sass 108357575 7791800 2002 sss0815
hore ert $274,101 sa son aaa Te 3407 2178 su05.04
ius az7 szrears 7 lesz 8.208 yo $489 2244 suse
1.102 1657 $267,968 6 m8 IS 7.857 7434082172 $005.50
tore 4553 szsages HSI Bz 71938052105 sor7.00
tom 1571 sees 7 aT as —55489 To 3.888 2006 sao7os8
a a a ed cot 1929 1909 san9.10
a 1900 saan.
925100 205515, Cn 1.705 $267.89
9351405 $205555, 252 ane 8.00 797 $268.08
so 1380 $218.28 To 288 400 sarA7o cor 182 1.750 s286z757
ess tao sz08gi7 2808S sez 1108 1.840 sasit08
a sis 1001802 sz24as7
a od 51S sed 1.588 samma78
7sr 1067 si67.204 079 aes sua 496 910 1.380. $180,700
Co 419748 1.108 si86.09
Ce ses eto 983k
Ce ses cay 1.009 sistas
eco 67s srmaeaso | zk aS. se ek. siamo
so et S114 tr siete 57 e85B_SIZA HR

REEELETEP SER ERE EEL ER ER EG

§

11/2585 tam lade es


33

and then by the number of adults in the family. People then have
to put in that number of hours on acceptable activities which could
be certain kinds of training activities, community work experience,
job placement, things of this nature. To the extent that people do
not participate, their grant will be reduced by $4.25 an hour for
every hour that they do not participate within the program.

We have intensive case management under the program where
we utilize a team of an economic support specialist, a jobs’ case
manager, a child care specialist, and a child support specialist to
try to ensure maximum child support and to make sure that child
care is available for the person who is going to work. Child care
is guaranteed under the Work, Not Welfare Program. As long as
someone is participating in activities under the program, child care
is provided by the Department of Social Services.

After one has left the program or is transitioning off, they are
eligible for transitional child care assistance and transitional medi-
cal assistance for a year after the program. One of the key features
of the program is what we call a community steering committee
that is appointed by our chief local elected official which is the
county executive in my county. This committee consists of private
industry-type or private businessmen employers who act as an ad-
visory committee to us and frankly, become very, very involved in
acting as a liaison between us and the business community to en-
sure jobs, to try to develop jobs for welfare recipients.

Our results when we started in January 1995, indicated there
were 607 families on AFDC in Fond du Lac County. As of October
1995, there are 370 families on AFDC in our county which is ap-
proximately a 39-percent reduction. In 1994, for all of 1994, we did
have a 20.7-percent reduction because I will say right up front,
that welfare cases are declining in Wisconsin generally. It is just
that our rate of decline at this point, ours and Pierce County is the
other pilot county, are the highest rate of decline in the State of
Wisconsin.

Of the families who are left on the Work, Not Welfare Program,
141 of them are exempt for various reasons from participation. One
of the things we did not expect is we had in effect 219 diversions.
What that means is that applicants and recipients of public assist-
ance who at least as far as we could tell were eligible for cash as-
sistance elected not to participate in the program. They may be re-
ceiving food stamps or something else, but they elected not to re-
ceive cash payments. We have basically placed 264 people into jobs
at this point in time. The average wage now, and that has fluc-
tuated up and down, the arithmetical average is $5.73 an hour.
The jobs have varied between $15.38 for a truck driver to some
minimum wage jobs. Of the people we have placed in minimum
wage jobs, for all of our programs, not just Work, Not Welfare, ap-
proximately 21 were minimum wage. So basically, our theory is
that everybody enters the work force at a certain point and that
is it.

Thank you.

{The prepared statement and attachments follow:]


88

What akout this? How with present welfare reform ideas deal
with this? I have been attempting to find out, and the answer
I have discovered is disheartening. The focus of welfare reform
measures is perceived Rehavion. It is most often the behavior
of the parent that remains with the child on children that is
addressed. Yes, Legistators have talked akout tougher child
support enforcement, hut the answen to real welfare nefonm is
not going to come from toughen *tath".

Our coklective Amenican conscience must do its “homework” negand~
ing the welfare issue kefone we cry out fon getting “those”
peonte to work. We have to thnow away assumptions and Look fon
facts. People should he parents, People should provide for thein
chifdnen. The goveanment cannot he a sufficient suanogate parent,
Refonming "welfare as we know it” is an adminahle and needed
goal, but do we neatly "know it”? We'd hetter. On, we'll cer-
tainly "flunk" the Lest of reform and oun children will pay

the price for oun failure.

written by: Pam Cave
Single, yet married, parent of five
Member, Fairfax Co. Welfare Reform Task Foace


42

in exchange for benefits. Recipients will participate in work or at
least in some community activity for 20 hours a week. Those are
changes that have occurred, many of them with the Federal rules
and regulations in place.

I also note you say that Michigan caseworkers have spent about
20 percent of their time with beneficiaries and the rest of it dealing
with other matters—paperwork and whatever. How will the
changes in our proposed welfare bill which we hope to see enacted
into law help free resources to further get people off of government.
dependents and on to independence and to work?

Ms. Comal-PaGE. Two points in that area. The bill will really
give us a lot of flexibility because we will not be in the waiver proc-
ess any more. The changes that I talked about in my testimony
that Michigan has made we only could do after intense negotiations
and time-consuming negotiations with the Department of Health
and Human Services. So we will not have to do that any more. The
Michigan legislature, elected officials can make decisions about
what our welfare program should be. So that is the first thing.

The second thing that I think is very important is that we will
be able to simplify the program. AFDC rules are very complex.
They are just mind-boggling. You layer that on top of different sets
of rules and regulations for food stamps and yet another different
set for Medicaid and you have an application in Michigan that runs
to 25 to 30 pages. So the bill will give us additional flexibility to
simplify our programs and get us out of a paper-driven, eligibility-
determination process and into a system where we are working
with families to get them off of assistance.

Mr. Camp. And I understand the legislature has acted in terms
of preparing the State for receiving the block grants and passed the
legislation with huge bipartisan majorities in both the House and
the State Senate.

Ms. Comal-PAGE. That is correct. They passed on the Senate yes-
terday and the House last week, I believe. That is correct. There
is bipartisan, wide bipartisan agreement on these bills in Michigan.

Mr. Camp. Thank you.

Chairman SuHaw. The time of the gentleman has expired. There
is a vote on the floor. We will break for 15 minutes, come back and
complete this panel.

(Recess.]

Chairman SHaw. If everybody would take their seats, the Com-
mittee will come back to order. Mr. Neal may inquire.

Mr. NEAL. Thank you, Mr. Chairman. I especially appreciate this
opportunity, given that I am not a Member of the Subcommittee
but have been involved on the Democratic side in helping to shape
what I thought was a pretty good substitute. As one prominent Re-
publican leader in the House said to me 2 years ago, they would
have gladly voted for the Democratic substitute if that bill had
been offered 2 years ago.

My questioning would be directed to Mr. Gallant and by way of
introduction I would just say that in 1980, Mr. Gallant, at the
Democratic State Convention I spoke in support of workfare. Be-
lieve me the plague would have been more warmly welcomed in
those days. But I do think that there is ample room here for middle
ground on this proposal and I am not sure that the debate has


10

Be nt ns
Mothers must cooperate with paternity establishment as a condition of eligibility. Young fathers

will be required to participate in job training job search and parenting programs and child support
orders against them will be strengthened

We must not disc! te against two- parent families and we must aggressively pursue reducing

A Better Chance provides the incentives for people to get married, pool their incomes, and share
child rearing responsibilities. In the short term we will eliminate federal welfare rules which
penalize intact families. In the long term the current welfare system will be scrapped in favor of a
system that supports working two parent families, through forward funding of the EITC and help
with child and health care

By 1999 Delaware intends to end welfare payments to teen mothers, We will continue to
provide child care health care and other services to keep teen mothers in school and finish their
education.

* . . .

As you can see, Delaware's goals in reforming welfare are the same as yours, Mr. Chairman. The
same as my fellow commissioners. The same as our President. And I have no doubt that the
recipients here today will support these goals wholeheartedly, as we know the public does

As Congress has struggled to restructure public assistance to accommodate these goals, we in
Delaware applaud your efforts. And although there are a number of important issues I could
discuss with you here today, including the contingency fund, the state maintenance of effort and
automation needs to name but a few, I want to spend my time on the child care issue. An issue
critical to Delaware and all States

On October 10 of this year the National Governors Association wrote to the conferees on welfare
to express their priorities for reform. The Governors listed adequate funding for child care as the
top priority for reform. Let me reiterate that message today.

We do not believe we can succeed in our efforts to provide Delawareans a better chance at self
sufficiency without adequate funds for upfront costs, critical support services and transitional
benefits, in particular child care and health care.

The welfare and child care funding levels proposed are insufficient to pay for the early year
investments in child care and other work support services. The proposed work requirements
would be unattainable for Delaware given the proposed funding levels.

Delaware estimates that the proposed funding levels for FY 1996 -2000 will be $70 million less
than the State's anticipated need in order to meet the strident work requirements. Child care
needs would be underfunded by $30 million. This is a 45% reduction anticipated for the State.

Like many states, Delaware's welfare payments are low compared to the cost of child care.
Delaware's welfare payment level ranks about 35th among state welfare payment levels.
Delaware's welfare payments are about 32% of the federal poverty level, Delaware's AFDC grant
for a family of 3 is $338 Per month compared to $459 in Wayne County, Michigan and $517 in
Wisconsin, For our state, once families are required to accept jobs or engage in job training
activities, child care becomes a critical support service as well as a major budget consideration

A survey of persons who were reapplying for welfare in Delaware over the past year and a half
shows that approximately 35% of families were reapplying due to child care problems and/or the
lack of health insurance. Delaware's welfare reform program guarantees child care and Medicaid
for a two year transition period. After the two year period, we continue to help the family pay for
child care if the family income is under 155% of the federal poverty level. Governor Carper has @
commitment to use long term savings from welfare reform to assist poor working poor families
with both of these necessary work supports


10

and a highly effective JOBS program. Recently, some Wisconsin counties have implemented
‘experiments designed to divert people from welfare, by persuading them to get a job immediately «
seek help from families, and these appear to have driven the rolls down further.

Would H.R. 4 make effective work enforcement more or less probable? The best work
programs in the country, such as Riverside’s or Wisconsin's, did not result from federal policy. The
arose from initiatives taken at the state or local level. JOBS, however, has clearly forced states wit
big caseloads, which have been the most loath to reform, to take the work mission more seriously
than they did before 1988. These states have had to meet JOBS’ participation rate thresholds, whic
forced work programs to serve a much higher proportion of welfare adults than previously.

The main effect of H.R. 4 would not be on the leading states in welfare reform. Wisconsin at
a number of smaller states already have realized participation rates high enough so that they could
probably attain the 50 percent threshold on schedule. The large urban states with the largest
caseloads raise much more question. For them, H.R. 4 offers more freedom from many federal rut
but it also cuts funding. And because there is now no dedicated money for work enforcement, ther
is now no assurance that states will spend enough on it to achieve the required work levels.

To promote serious reform, itis crucial that Congress manifest that the work requirements art
serious, and also that it is possible to meet them. I fear that the new stipulations are not credible as
they stand. They call for participation rates never before realized except in a few localities, yet the
provide no specific funding or program comparable to JOBS to realize them. The demands made
look excessive, but it is also doubtful whether Congress really means to enforce them,

Uf implemented, some provisions of the bill clearly would improve work enforcement,
compared to JOBS:

+ The participation rates required of states are raised to 50 percent by 2002. It is essential to reac
that level to make work, rather than nonwork, the norm on welfare. For states to reach this lev
will be difficult, but several years of implementation are allowed.

+ Participation rates are calculated using a base of all welfare adults, rather than employable adul
asin JOBS. The JOBS definition of employability never was as closely related to job entries :
the participation rate for all adults, and some states have manipulated who was defined as
employable to exclude some recipients and make the participation thresholds easier to meet.”
States, however, are allowed to exclude mothers with children under 1 from the base.

+ The activities that count as participation are shifted toward actual work and away from the
presumptions in favor of education and training that dominated JOBS, Evaluations since FSA
has established that remediation in advance of work serves mainly to postpone work and seldo
helps recipients get better jobs.

+ Although child care funding remains, the obligation to arrange care is shifted from the agency
the mother, who can now claim exemption on grounds of child care only if she proves that car
is unavailable.

In some respects, the new legislation is less demanding than, experience suggests, it should
have been:

+ Up-front job search is not mandated. Merely, recipients are supposed to work within two year
This will allow programs to continue to postpone work for the bulk of recipients and thus fore
much of the potential deterrence effect of a work requirement. if job search is postponed, a tir
limit on aid becomes less enforceable and less credible.

+ The work obligation is more clearly defined for the state than the recipient. The law should sa
explicitly that welfare adults are obligated to work or look for work half-time as a condition of
aid.

* Vocational education, within certain limits, can be used for satisfying the first 20 hours of "wo
activities" requirement, although experience has shown it has little impact. Better to exclude i
as training is excluded, until the recipient is Working at least 20 hours.

+ The "sense of Congress” provision asking states to require "noncustodial, nonsupporting father
under 18 "to fulfill community work obligations" should be extended to Such fathers of all age

* No provision is made for performance measures for work programs other than the participatior
floors. While the latter are primary for forcing change on the welfare system, Washington
should also develop such other outcome measures as job retention rate or job entry wage, to
assess how good the jobs are that recipients enter.

But in some other respects, the new rules are more demanding than is practicable, in light of
experience:

* School attendance is not allowed as a permissible activity or mothers under 20 who have not
‘completed high school for the first 20 hours, as itis for hours beyond 20. The priority should
to have these mothers graduate, and after that to work, rather than the other way around. Teen
mothers who did now show "satisfactory attendance," however, would have to work.

+ Especially, hours requirements as high as 35 are mandated for the years 1999 and beyond. Thi
is too high to be enforceable given the need of single mothers to devote some time 10 caring fe
children. States have had enough trouble with the "20 hours rule” in current regulations. Itis
far more important to levy a half-time requirement that is enforceable than a higher one that is
“only symbolic.

Having mandated such standards, Congress proposes to enforce them only by penalizing stat
5 percent of their block grant if they fail to mcet them. Since the Congressional Budget Office has
already estimated that to meet the rules might take up the bulk of the entire block grant, states have
little incentive to do so. Better to take the 5 percent penalty and be rid of the work requirement.

7 In FY93. the share of welfare adults states judged to be mandatory for JOBS varied from 21


52

The conference report mandates work participation rates far ex-
ceeding those in current law—and Ms. Nazario, you have referred
to that—and those achieved in the most successful welfare-to-work
programs to date statewide. Mr. Schilling, you are just represent-
ing what, one county?

ir. SCHILLING. Yes, we have a county-administered, State-super-
vised program of assistance in Wisconsin,

Mr. LevIN. While it is true that the conference report includes
somewhat more child care funding than is projected to be spent
under current law, just $843 million over 7 years, this additional
funding is likely to fall far short of what would be needed to meet
the expanded work requirements.

Chairman SHAW. Let me say to the gentleman that in the scoring
that we have, we have $10 billion as entitlement and the balance
of seven in there. It has been scored by the Congressional Budget
Office as an actual increase over the Senate language, and it is cer-
tainly an increase over the original House language, and an in-
crease over existing law.

I would be very quick to say, however, that as we get into a re-
formed system of welfare and turning it into a work program, it is
my thought that we are going to have to revisit that and increase
it even above what is in the bill. That I think is a fair criticism,
but we are just going to have to wait and see and watch the pro-
gram and be sure that we do take care of it because child care is
a very important part of welfare reform. I think all the witnesses
at this table have certainly said so.

Another area where your side has criticized us is in the question
of the contingency fund. T think there is $800 million in there. That
may not be sufficient. If we get an economic downturn, just as we
do in unemployment compensation, we will have to go back and re-
visit that to be sure that that area is also funded.

In my view of welfare reform—we are simply taking the first
step, and there are going to be a number of steps afterward. There
will be some things that we had not thought of, and there will be
some results that will surprise us. But the question is and the
problem is, we have a system that has been likened to that of a
60-year-old car, nobody would want to drive it. It is time now for
us to reform it.

The architects of this present system put it together about 60
years ago. The States have been very innovative in moving awa
from that, and I can say that this administration and previous ad-
ministrations have been willing partners in granting waivers to let
some of these new and innovative systems be in place. It is now
time for us to have more faith in the States and to give them the
opportunity to go forward and craft these programs within the
guidelines that we have set forth without the necessity of coming
to Washington for waivers.

But I view this welfare reform as an ongoing system. We cannot
simply brush our hands off and say, now it is done. We are going
into areas on a nationwide basis which we have to be very cautious
about. But there is one thing we all agree on, and all of us on this
Committee, and as a matter of fact every Member of Congress
agreed with their vote either on the Deal proposal or on H.R. 4,
that the present system is lousy and we need to reform it. It is a


50

can to cut back on it. Democrats and Republicans certainly want.
to do that. And we do have representation here from both Demo-
cratic and Republican Governors, and your States have certainly
been outstanding leaders in the Nation in reforming welfare.

I thank you all for being here.

Mr. LEVIN. I just have a couple of questions for my colleague
from Michigan. I have not heard from the State. Does it support
the provision in the bill, and of course, there is no final conference
bill, but it would appear this is in it to stay until it will be vetoed
and then we will get back and talk on a bipartisan basis, the 25-
percent cut in cash payments for the families of children who meet.
the medical listings?

Ms. Comal-PacE. I certainly think that those people have been
determined to be disabled.

Mr. LEVIN. These are people who meet the medical listings, are
severely disabled, and in the House bill there was a change in the
cash payment beyond what is now in this bill, but there is a provi-
sion for a 25-percent cut in the cash payment. Do you support that?

Ms. Comal-Pacr. I think in terms of an overall effort to balance
the Federal budget, Congress passed a budget resolution which
clearly laid out what kind of savings Congress needs to achieve and
I think that that is a reasonable way to achieve that savings.

Mr. Levin. That is the formal position of the State to be support-
ive of that cut?

Ms. Comal-PAGE. That is correct.
svt LEVIN. Have you consulted with the people who work on

Ms. Comal-PaGE. Yes, I have. Not on this particular issue, but.
we talk regularly.

Mr. LEVIN. I mean on this issue.

Ms. CoMAl-PAGE. Not on this particular issue, no.

Mr. LEVIN. I would appreciate a communication from you on this
because I had a chance to talk to the people who run the program.
We need to get at the abuses, but I called them without any notice
and they felt for the State of Michigan—I did not ask them about
this specific cut. I asked them about the House provision. I would
very much appreciate your getting back in touch with me on that.

Ms. Comal-PaGE. I would be happy to do that.

Mr. LEvIN. What is the child poverty rate is in Michigan today?

Ms. Comal-PacE. I think it is around 13 percent.

Mr. LEVIN. Are you quite sure of that?

Ms. Comal-PacE. If you want to correct me on that, I would be
happy to be corrected.

Mr. Levin. Actually, I am not sure. I will give you the Census
Bureau information and the latest, I think, they have is 1992-93.
You may have later information. Again, I would appreciate your
giving that to us for the record. In Michigan, the child poverty rate
in 1987-88—the average of the 2 years was 17.8 percent. In 1992—
93, it was 22.4 percent. So I would very much appreciate your re-
gponding and telling me what the child poverty rate is today in the

tate.

Ms. Comal-Pace. I would be happy to get back to you on that.
[The following was subsequently received:]


56

after the fact. We are needing counseling to learn how to deal with
each other again because there was so much time spent without
outside child care available. There was no money for it.

I talked about what it took to get off. You also have to deal with
your own doubts about yourself, your personal skeletons in your
closet, your fear of failure. Those things are all important issues
that need to be addressed when you go about trying to help some-
body toward self-sufficiency. It is not a single thing. People are
multidimensional. You cannot just throw money at it and expect it
to be better automatically.

I guess that it is about it.

Chairman SHaw. Thank you.

Ms. Haskins.

STATEMENT OF DEBORA HASKINS, FOND DU LAC, WISCONSIN

Ms. HaskINs. I am Debbie Haskins from Fond du Lac, Wisconsin.
The problems I had were the child care and medical. I have five
children. The child care I pay so much, along with having help with
that, and next month I will be putting the children under my in-
surance. So things have come a long way in the year that I have
been working.

We have had a lot of rough times like Ted said. But there are
a lot of things that do need to be changed because I am not proud
of being on the system for as long as I have. But there are so many
loopholes. I was told years ago that if I tried—because I had told
them I would like to form some kind of a committee and get some
of the things changed that needed to be changed. They said, even
if I tried to start on the inside all I would manage to do was lose
the job that I had, because those people would be losing their jobs
also if we put an end to certain of those.

So they have so many loopholes that I feel need to be closed. I
was able to stay on the system for a lot longer than I should have
been able to. Now that I am working, I have got more of that self-
esteem back. Within the system, it takes that away from you. I
thought, I have been home for so long, what can I really do? Once
I got out there I found out I can do a lot.

I weld. I am the setup person at Power, Inc., which is a small,
family run business. Each day I am learning more new things. I
do not think there is anything that I would not be willing to learn.

Other than that, child care is the biggest issue with us because
I have three that are needing day care. Even though I pay part of
it, there is a substantial amount that gets paid for them. Without
that child care they would be either taking it away from the shelter
or food. Really with both of them, you really do not want to have
to take from either one of those. My children, the ones that are in
day care are 4, 6, and 9. Next year the 9-year-old will not be in
child care, so I will just have the two. So my biggest concern is
child care.

Thank you.

Chairman SHaw. Thank you.

Ms. Geter.


60

Ms. PETERSON. Yes, I think it would be helpful. I think any
amount of increased flexibility that the States get is definitely
going to be an improvement and will give a greater chance for cre-
ative solutions to some of these problems.

Mr. Camp. In understanding your particular situation, you really
started on this change in—was it 1992 that you began?

Ms. PETERSON. I began in 1991, so it was under the old program.
Then Michigan reformed and so there were new things.

Mr. Camp. So you experienced both the old system in Michigan
and the changes and the reforms as they went along?

Ms. PETERSON. Yes.

Mr. Camp. For example, the idea of entering into a social con-
tract. Did that have an impact on you?

Ms. PETERSON. I had no problem with the social contract. I was
going to school full time so that really fulfilled that contract. Before
they made the changes though, I was required to take a clipboard
with me to every class and have every teacher sign. That was high-
ly demeaning. It was highly difficult to do that and have to explain
why it had to be done. I do not know whether that was a Federal
or a State rule, but that was very difficult.

Mr. Camp. But that rule was changed and that helped?

Ms. PETERSON. That was changed because the social contract re-
placed that. I could fill in where my time was and where I was for
that time instead of having somebody sign it.

Mr. Camp. So you were given the responsibility and the trust, if
you will, to complete your work and hand it in.

Ms. PETERSON. That is right, yes.

Mr. Camp. Did you then meet with someone to go over your
progress?

s. PETERSON. No, that was a downfall because I had to keep
them in case there was question as to validity or whether I was
doing my part. It probably would be better if that was sent in every
month or something. It did have to be signed once a month.

Mr. Forp. Mr. Camp, would you yield on that point?

Mr. Camp. I just have a little bit of time. I will yield for just a
few seconds.

Mr. Forp. Now, she was in school for 4 years from 1991. Under
the Republican bill, I think after 2 years of school she would not
be able to receive the cash benefits.

Mr. Camp. She would have had to have worked on a part-time
basis under our plan.

Mr. Forp. So what I said earlier, after 2 years, Ms. Peterson
would have been cut off because she was in school, right?

Mr. Camp. Not cut off, no. What you said was wrong. She would
not be cut off. I will reclaim my time.

I am just trying to get at what some of the things were that
helped you. Were there any services that the Department of Social
Services provided or things that you did that you found particularly
helpful?

{Pause.]

Mr. Camp. That is fine. You have done an excellent job here
today and I really want to commend you on the changes you have
made in your life and helping share those with us so we can do a
better job.


48

people being removed. But thank you very much, Ms. Page, and
thank you, Mr. Chairman.

Ms. Comal-PaGE. If I could just comment on that. I would say
that afterward, 20 percent of those people were working which is
20 percent more than were working previously.

Mr. Forp. Absolutely, and I applaud you for that part of it.
There is no doubt about it. But I do not want to mix the two,
women with children versus this general assistance program that
is something that the State created for their own welfare program.
Is it the case that you found a way to remove many who were able-
bodied men, and ready to go to work when the economy got better.
And, in areas where they did not find jobs, your crime rate went
up, and I do not know how much you have already appropriated
for more jail cells in the State of Michigan since that time.

Ms. Comal-PaGE. Actually we have done careful analysis of crime
rates and that is not correct.

Mr. Forp. It is not true in Wayne County?

Mr. Camp. The crime rate has gone down in Michigan.

Mr. Forp. It is not true where you have the heaviest population
of your feneral assistance recipients in Wayne County, it has not
gone up?

Ms. Comal-PaGE. We looked at a 10-percent sample of recipients
who were on general assistance and tracked them for several years,
and we did not find an increase in the number of those people who
were incarcerated.

Chairman SHaw. I want to ask Ms. Nazario a question. You stat-
ed in your testimony that by 1991 Delaware intends to end welfare
payments to teen mothers. We will continue to provide child care,

ealth care and other services to keep teen mothers in school and
to finish their education. As you probably know that was one of the
more controversial parts of the welfare bill that came out of this
Committee. And as the conference report now stands, that would
become a State option. And I assume that Delaware has opted to
hold cash benefits back but to give other types of benefits to these
teen moms. Have you received a waiver to do that?

Ms, Nazario. Not at this point. That is phase two of our waiver
and that would be after 1999. So that was not part of the waiver
that we negotiated for the current phase and we are waiting to see
what happens with the Federal law, to determine if we still would
need a waiver or if we can do it with law.

But I would like to point out that Delaware is doing that after
4 intense years of working with the teen population. We have es-
tablished an alliance for adolescent pregnancy prevention that in-
corporates over 35 private agencies working with the public sector
to provide intense services to teens that range from education to
media campaigns. We have wellness centers in every high school.
We have a lot of services for teens. So we are putting this within
a context and it is not just dropped on the teens that all of a sud-
den you will not receive assistance. So we are working with them
to provide real options for their future so that they are more capa-
ble of making decisions.

Chairman SHaw. I would like to ask each one of the witnesses
a question with the exception of Ms. Page because she has already
answered it. In her statement she said:


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69

TESTIMONY OF LAWRENCE M, MEAD
PRINCETON UNIVERSITY

I appreciate this change to testify on the nation's next reform of welfare, which is foreshadow
in the Personal Responsibility and Work Opportunity Act (H.R. 4). I am a Professor of Politics at
New York University, and currently 1 am a Visiting Fellow at the Woodrow Wilson School of Pub
and Intemational A fiairs at Princeton University

T must say at the outset that H.R. 4 is not the welfare reform 1 would have chosen, Its purpos:
is mainly to block-grant welfare, ending its entitlement status, and to time-limit the period during
which recipients may draw aid. ‘The JOBS program is eliminated and its funding folded into the
same grant with AFDC. I would have preferred ending the AFDC entitlement through tougher wo
requirements rather than block grants. I would have kept JOBS and used it to insist much more
strongly than current law that welfare parents immediately look for work and take jobs. However,
would have allowed open-aided aid for adults unable to get off the rolls, provided they worked or
looked for work half-time. This, I think, is the best way to satisfy the imperatives that emerge fron
both public opinion and the nature of the welfare problem--enforcing work for the employable whi
supporting the vulnerable. I testified to this effect before this committee on January 23, 1995.

However, H.R. 4, or something close to it, is likely to become law. Accordingly, today I ask
different question: What will this bill accomplish? What are its effects likely to be on the process ¢
reform that is already going on at the local level? I will concentrate on the areas I know best, whic
is welfare employment programs, although H.R. 4 would affect other realms as well. My verdict is
mixed. The bill proposes much tougher Work requirements than current law, which is good, but
whether it would reatize them is unclear.

In general, enforcing work is the best way to reform welfare. This strategy directly responds
the main probiem of welfare adults, which is lack of employment, while maintaining support for
Jamilies in need. Jtis better than either paying welfare without expectations, AFDC's traditional
policy, or denying all aid, as some conservatives propose.! Some argue that unwed pregnancy is a
‘greater problem on welfare than nonwork, but the main cause of nonmarriage and marital breakup.
among poor parents is itself the failure of the adults as breadwinners. Further, we know how to
enforce work while we do not know how to curb unwed pregnancy. Itis unclear whether cutting
welfare benefits or coverage would reduce births out of wedlock, but itis very clear that work
requirements raise the share of welfare recipients who work, more than does any other policy.2

These considerations explain why the main purpose of the Family Support Act, the last
national welfare legislation, was to create the Job Opportunity and Basic Skills Training program
JOBS), the nation's most ambitious welfare employment structure to date. The implementation of
JOBS, so far as FSA mandated, was completed in FY95, when states were supposed to have at leac
20 percent of their employable recipients active in the program on a monthly basis..

The key to effective work programs is enforcing participation and requiring that participants
actually work or look for work rather than go into education or training. Remediation can help, but
only after clients are working at least part-time. Preliminary findings from a national evaluation of
JOBS shows that a “labor force attachment” approach is much more successful than "human capita
development," at least in the short-run.>

Evaluations establish that programs with these features can have large effects on the caseload
In the recent evaluation of California's Greater Avenues for Independence (GAIN), the most
successful county (Riverside) raised the proportion of its clients working by a quarter and their
earnings by a half.4 Most such programs show more modest gains, but the reasons are mainly that
they do not enforce participation and actual work as effectively as the better programs. In principle
to enforce much higher work levels on welfare is within the capacity of goverment,

In evaluations, welfare work programs typically raise employment and earnings by more thar
they reduce the welfare rolls. Recent evidence suggests, however, that work programs can deter
people from going on welfare in the first place. Assessments of what happens to people on the roll
fails to capture that effect and so understate how much the programs reduce dependency.

Teappears, for example, that JOBS has some power to restrain growing dependency. Betwees
1989 and 1993, state welfare rolls grew an average of 35 percent, but states that achieved high
participation in JOBS had noticeably lower growth. A few states have been able fo use tough work
enforcement to help drive their caseloads down.S

The most notable case is Wisconsin. Between 1987 and 1994, the state's AFDC caseload
dropped 23 percent, despite the fact that welfare was growing victually everywhere else in the
country. In this period, the average Wisconsin county cut its dependency 42 percent, and even
Milwaukee, with the largest and most disadvantaged caseload, reduced it by 5 percent, according tc
state figures.6 The reasons probably include a favorable economy, some decline in benefit levels--

1 Lawrence M. Mead, Beyond Entitlement: The Social Obligations of Citizenship (New York
Free Press, 1986)

2 Lawrence M. Mead, The New Politics of Poverty: The Nonworking Poor in America (New
York: Basic Books, 1992), chs. 4-8.

3 Stephen Freedman and Danie! Friedlander, The JOBS Evaluation: Early Findings on Progrz
Impacts in Three Sites (New York: Manpower Demonstration Research Corporation, July 1995).

4 James Riccio, Danie! Friedlander, and Stephen Freedman, GAIN: Benefits, Costs, and Thre
Year Impacts of a Ws --to- Work Program (New York: Manpower Demonstration Research
Corporation, September 1994),

5 Lawrence M. Mead, "The New Paternalism in Action: Welfare Reform in Wisconsin"
(Milwaukee: Wisconsin Policy Research Institute, January 1995).

6 Department of Health and Social Services. JOBS Annual Report, State of Wisconsin



WELFARE REFORM SUCCESS STORIES

WEDNESDAY, DECEMBER 6, 1995

HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,
SUBCOMMITTEE ON HUMAN RESOURCES,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:01 a.m., in
room B-318, Rayburn House Office Building, Hon. E. Clay Shaw,
Jr. (Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]

ie)


72

Chairman SHaw. Thank you, Dr. Mead.

We do have a vote on the floor. Ms. Schulz, if you could sta’
around we will be back in about 15 minutes. Thank you. We will
stand in recess.

[Recess.]

Chairman SHAW. The Committee will now come back to order.
Ms. Schulz, if you could proceed, please?

STATEMENT OF SHARON F. SCHULZ, EXECUTIVE DIRECTOR,
NEW HOPE PROJECT, MILWAUKEE, WISCONSIN

Ms. ScHuLz. Thank you very much, Mr. Chairman, and Commit-
tee Members. Thank you for the opportunity to speak about the
New Hope Project, a welfare alternative in Milwaukee, Wisconsin.
My comments will be addressed in light of the New Hope experi-
ence. The New Hope Project is a national antipoverty demonstra-
tion. The ultimate goal of the project is to provide State and na-
tional policymakers with information on work-based option.

The most powerful stories of success come from the mouths of
New Hope participants. The most powerful decisions which will af-
fect the ability of many to live above the level of poverty are being
made here in Washington.

The New Hope Project is being evaluated by MDRC, the Man-
power Demonstration Research Corp. MDRC is monitoring and will
report on the implementation of this antipoverty strategy, assess
the number of individuals getting into the labor market, their sta-
bility and working toward economic independence.

Over 1,300 people came from two central city neighborhoods in
Milwaukee to participate in the project. They came understanding
that due to random assignment, there was a 50-50 chance that
they might not be an eligible participant. They also understood
that their increase in income through a wage supplement, as well
as help in paying for health insurance and child care, would only
be available if they worked at least 30 hours a week.

New Hope participants are 52 percent black, 25 percent His-
panic, 13 percent white, 16 percent Asian, and 4 percent Native
American. Sixty percent were receiving public assistance in the
form of AFDC or general assistance at the time that they enrolled
in the project. The range of family size is from one to nine, with
an average family size being three. Over 40 percent have no high
school diploma or GED. Making work pay is attractive to low-
income persons with varied backgrounds and experiences.

New Hope has been enrolling participants since August 1994,
therefore some of them have been in the project for only a few
weeks, while others have been in over 1 year. Of the 661 eligible
participants, 48 percent are employed full time. For us, that means
120 hours or more per month. Five percent are employed part time
and 5 percent are employed through a community service job
through New Hope. Of those who have had a community service
job placement, 30 percent have moved into regular employment.

Twenty-nine percent of the New Hope participants are childless.
The value of offering support to childless couples and individuals
means that noncustodial parents will make child support pay-
ments. According to one teen adult in the program, her concentra-
tion on work and her opportunities lead to goal setting, personal


77

I do not believe that reforming welfare really would take up the bulk of the grant. It would
only if one invest unnecessary sums in child care, training, and govemment jobs, as the Clinton
welfare plan proposed to do. Rather, one should invest in case managers and computer systems to
enforce participation and work on the caseload. If one does that, some up-front investment is
needed, but one saves money due to caseload reductions within a couple of years, to judge from the
Riverside and Wisconsin cases. The cut in funding, however, may still make it harder for the large
states to set out to enforce work aggressively.

‘Two responses can be imagined. States that have not reformed significantly may get serious
about it and devote much more attention to enforcing work. Or they may decide to change little an
take the 5 percent penalty as the lesser evil. Indeed, they might even use money that once went for
JOBS to pay for benefits and thus offset the federal funding cut. If many states did this, they woul
also go to Congress secking to ease the standards and avoid any penalty at all. Work requirements
would then collapse, returning welfare to the policy of entitlement without serous work expectatior
that prevailed prior to the Family Support Act

‘The success of H.R. 4 depends critically on making the work rules more credible. I believe
that will take at least two changes in the bill, either now or later:

+ Raise the penalty for failing to meet the nules to much more than 5 percent of the block grant.
* Reduce the hours requirements in 1999 and beyond to 20 hours.
It may also require the restoration of some dedicated funding for work enforcement.

Politically, an ambiguity lurks at the heart of the block grant. Congress cannot both give stat
control over welfare and still demand that they put most of their adult recipients to work. I hope th
‘Congress and the Administration will decide that the work provisions are more than pro forma. Tt
amounts to saying that they should become a national program embodying national intentions,
comparable to JOBS, And careful attention should be paid to their implementation, including both
some changes in the law (such as I have suggested above) and careful drafting of regulations. If
Washington makes that effort, than indeed H.R. 4 could mean a new and brighter day for welfare is
America.


14

TESTIMONY OF SHARON F. SCHULZ,
EXECUTIVE DIRECTOR, THE NEW HOPE PROJECT
MILWAUKEE, WISCONSIN
BEFORE THE WAYS AND MEANS SUBCOMMITTEE ON HUMAN RESOURCES
DECEMBER 6, 1995

Mr. Chairman and Committee members: Thank you for the opportunity to
speak with you about the New Hope Project, a welfare alternative in Milwaukee,
Wisconsin. My comments will be addressed in light of the New Hope experience.
The New Hope Project is a national anti-poverty demonstration. The ultimate goal
of the project is to provide state and national policy makers with information on a
work-based option. The most powerful stories of success come from the mouths
of New Hope participants. The most powerful decisions, which will affect the
ability of many to live above poverty, are being decided here in Washington, D.C.

Introduction: The New Hope Project's ultimate goal is to provide state and
national policy makers with data on how well the New Hope offer helps individuals
get into the labor market, remain there, and what percentage of them make
progress toward economic independence. The New Hope Project is an effort to
document the effects of incentives to work for long- and short-term AFDC
recipients, and General Assistance recipients, as well as individuals who are not
currently in the welfare system, but still poor.

The New Hope Project has been developed over the past several years
through a painstaking process involving representatives of the Milwaukee business
community, state, county and city officials, community organizations, organized
labor and religion, and those directly affected by poverty and unemployment. It is
a bi-partisan effort whose proponents have grown to include a cross-section of the
Milwaukee community, because it is making a different kind of social contract with
the able-bodied poor: if you work, you will not be poor.

Over 1300 people, from two central city neighborhoods, came forward to
participate in the project. They came understanding that due to random
assignment, there was a 50-50 chance that they might not be an eligible
participant. They also understood that an increased income through the wage
supplement, as well as access and help in paying for health insurance and child
care, would only be available if they worked at least 30 hours per week. New
Hope participants are: 52% Black, 25% Hispanic, 13% White, 6% Asian, and 4%
Native American. 60% were receiving public assistance (AFDC or General
Assistance) upon enrollment into the project. The range of family size is from one
to nine, with the average family size being three.

Over 40% have no high school diploma or GED. Making work pay is
attractive to low income persons with varied backgrounds and experiences.

New Hope is being evaluated by Manpower Demonstration Research
Corporation (MDRC}. MDRC is monitoring and will report on the implementation of
this anti-poverty strategy, and assess the number of individuals getting into the
labor market, their stability in working, and progress toward economic
independence.

The program has four key components:

cess to a job: through non-subsidized private or non-profit employment,
or if the participant cannot find a job after an eight week job search, a
community service assignment will be offered.


31

Ms. Comal-PaGE. And many will not. If they are not low income,
they would not receive assistance. I think the issue around SSI is
as the program was established, it was established as a program
to replace the earnings for those people who could not work. Chil-
dren cannot work anyway. I think there is a need to provide assist-
ance to severely disabled children and this bill continues to do that.

Mr. RANGEL. If a child is born in poverty in these United States
and therefore has citizenship bestowed upon it, but the mother is
already on welfare with a child, in your professional opinion,
should any State be given the opportunity to deny the second child
assistance?

Ms. Comal-PaGE. This issue was debated in Michigan just in the
last few days with the Michigan Legislature in considering our wel-
fare reform bill. We decided not to impose a family cap in Michi-
gan. So we will continue to provide assistance with State dollars
to children born while the mother is on assistance.

Mr. RANGEL. As reluctant as you are to share your opinion about
what the Federal Government should be doing, do you think that
we should mandate that a child born poor, whether the mother is
below 18 or whether the mother has another child on welfare, in
any of these United States should be denied assistance?

Ms. Comal-Pace. If I have seemed reluctant, I do not mean to
be. Clearly, we think that the bill should be passed without strings
attached, with as few strings attached as possible to make States
able to flexibly administer their programs and be creative and be
innovative. I can tell you what Michigan has decided to do in those
areas. We would prefer that the Congress not—

Mr. RANGEL. I am talking about the birth of an American child.

Chairman Suaw. If the gentleman would yield. In the conference
report, it is a State option.

Mr. RANGEL. I know that. I will rephrase the question. Should
a State have the option to deny a poor child benefits because its
mother had another poor child on welfare?

Ms. Comat-PacE. I think States should have that option. I think
we do not know today——

Mr. RANGEL. That is what I wanted to get.

Ms. Comal-PaGE. We need flexibility.

Mr. RANGEL. Let us get to this 18-year-old child. Should the
State have an option to deny assistance to a child born to a mother
that is under 18?

Ms. CoMal-PaGE. I think the State should have the option. I do
not think it should be a mandate from Congress.

Mr. RANGEL. Is it your opinion that there is a relationship with
the number of people on welfare and their lack of education?

Ms. Comal-PacE. I think that we found in Michigan that getting
people into a job is the most important thing we can do to getting
people off of welfare. Having said that, we also believe that it is
very, very important for high school completion or GEDs to happen
for minors. So that is a part of our bill.

Mr. RANGEL. And the earned income tax credit? Do you believe
that it is of assistance to people by preventing them from having
to go on welfare?

Ms. Comal-PacE. It certainly is helpful to low-income families. In
Michigan, we have asked for a waiver and been denied, and Con-


17

In the final analysis, Mr. Chairman, it is the fear of change itself
that alarms so many. However unfounded these fears are, it is a
reaction that must be recognized. Programs like TEMP-UP dispel
the myths that surround reformation of the welfare system. They
prove that on-the-job training is the best training for recipients and
that work is the quickest and most effective route to self-
sufficiency. Thank you.

[The attachments follow:]


23

like to see the States doing if we can give you the ability to have
responsibility and authority for your welfare caseloads.

oing back to the child care funds, you mentioned in your review
that they are adequate in the legislation not only because of the
amount provided in the proposed bill, but also because of the abil-
ity to transfer and changes in the law that we have made that
move people from welfare to work. Are there any other sections of
the bill that maybe we did not discuss that help you maximize
child care benefits for recipients?

Ms. Comal-PaGE. I think the flexibility that we are looking for
in Michigan is to allow us to pay child care funds directly to a fam.
ily so they can, like most of the people in this room, go out into
the child care market, purchase their child care, make a decision
themselves about what is best for their children and for them-
selves. So that is the kind of flexibility we really need in Michigan.

The costs of administering the program right now in Michigan
with the current Federal guidelines and so forth are very, very ex-
pensive. And those funds could really be better spent instead of
putting them toward staff time and paperwork and computers. We
could put them in the hands of families and maximize those re-
sources.

Mr. Camp. I also note in your testimony that in the To Strength-
en Michigan Families Program the outcomes have exceeded your
projections, that things have gone better than you expected, and I
think that is an important point to underscore.

I very much appreciate your being here, and I will yield back to
Mr. McCrery.

Mr. McCrery. There has been a lot of talk today about child care
funding and I assume that is one of the areas that some of my col-
leagues think needs attention in the conference agreement. I have
not heard too many comments about any other parts of the bill, so
I assume that they are satisfied with most of the rest of the bill.

Mr. LEVIN. Let me just say, that is not correct.

Mr. McCrery. Then you will have your chance, Mr. Levin, to
talk some more about it, but so far I have only heard about child
care. Frankly, the provisions of the bill are very similar in many
respects with the bill that the Democrats presented on the floor
on——

Chairman SHAW. Would the gentleman yield to me very quickly.

Mr. McCrery. Sure.

Chairman SHAW. In child care we have put more in the con-
ference bill than existing law and more in the bill than the Senate

iT.

Mr. McCrery. I thank the Chairman, I was getting to that. As
a matter of fact, Ms. Nazario, you should know that the conference
bill calls for about $17 billion in funding for child care which is
more than the original House bill, more than the original Senate
bill, and certainly more than current law would provide. So we
have put additional funding into the child care provisions of the

il,
I would like to ask you, in your analysis did you figure any dy-
namic results of the changes in your law? In other words, did you
figure that you are going to reduce your caseload at all and does
that figure into your cost estimates for child care?


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32

gressman Camp has promoted a bill before this Committee as a
matter of fact that would allow States to advance the earned in-
come tax credit to low-income working families who are on assist-
ance and we support that wholeheartedly.

Mr. RANGEL. Do you support denying benefits to poor working
families without children?

Ms. CoMal-PaGE. I support strongly a balanced budget, and we
have to make choices in that balanced budget.

Mr. RANGEL. Are you a member of the Republican staff here?

Ms. Comal-Pacr. No, I am not.

Mr. McCrery. We should consider hiring her though. She is
quite good.

Mr. RANGEL. I would gather that. Thank you.

Chairman SHAW. The time of the gentleman has expired. We
have been joined now by Mr. Schilling. Edward Schilling, if you
would come forward and join the panel. Edward Schilling is the di-
rector of the Department of Social Services of Fond du Lac County,
Wisconsin. I wil suspend the questioning and give you an oppor-
tunity to present your statement. We have your full statement
which will be made a part of the record and we would encourage
you to summarize.

STATEMENT OF EDWARD L. SCHILLING, DIRECTOR, FOND DU
LAC COUNTY DEPARTMENT OF SOCIAL SERVICES, FOND DU
LAC, WISCONSIN

Mr. SCHILLING. Thank you. My name is Ed Schilling. I am from
Fond du Lac County, Wisconsin. It is a county of approximately
90,000, and it is kind of a mix of rural and urban kinds of popu-
lations. Fond du Lac County is one of two counties in the State of
Wisconsin that is piloting a welfare reform project known as Work,
Not Welfare.

Work, Not Welfare is characterized by some of the following fea-
tures. It has time-limited benefits; that is, a recipient can receive
benefits only for 24 months in a 48-month period of time. It at-
tempts to duplicate the world at work as much as possible. So for
example, there is a benefit cap on Work, Not Welfare. If you have
additional children within 10 months of going on the Work, Not
Welfare Program, there are no increases in benefit, other than the
food stamp portion.

Food stamps, by the way, are cashed out. There are no food
stamps. They get the cash equivalent of food stamps. And again,
that is attempting to parallel the World of Work where we do not
get food stamps or special kinds of tokens. We get cash that we are
supposed to use as best we can for our own family. There are lim-
ited exemptions for the program. So for people with very young
children, there is a one-time exemption for people who have chil-
dren under one. That would mean that during that period of time,
the clock, the 24-month clock of benefits is not ticking. However,
if a person has a child after 10 months of being on the program,
although they medically may not participate in some of the activi-
ties during that period of time, the 24-month clock is ticking.

There is a mandatory work requirement under the Work, Not
Welfare Program. What we do in our county is take the total cash
grant that someone is receiving, divide that by the minimum wage,


14

implementation plan with a strong emphasis on helping families
become independent of the welfare system.

Under this plan, Michigan Department of Social Services would
be changed to the Family Independence Agency, the AFDC Pro-
gram will be changed to the Family Independence Program, and
our assistance payments, our frontline workers will become family
independence specialists. All these name changes also mean a very
big difference in how we are going to be treating welfare recipients.

lew applicants, new families that come in for assistance will be
expected to participate in a joint orientation conducted by the new
Family Independence Agency, and our job training and employ-
ment agency, the Michigan Jobs Commission, as a condition of eli-
gibility for opening a case.

Clients will be enrolled in employment-related activities, or if
they are job-ready, they will be referred to prospective employers.
If a client fails to comply with our requirements within 60 days,
their case will be closed. Clients who subsequently fail to comply
after the initial 60-day period will be subject to a reduction in ben-
efits. Then if a client continues to remain in noncompliance for 4
months, the case will be closed.

We will help those who comply manage their child care needs by
making payments directly to them. They in turn will be responsible
for making day care choices and day care payments. We are also
working closely with the Michigan Department of Transportation to
develop a plan for removing transportation barriers preventing low-
income families from becoming self-sufficient.

To encourage work, we are going to be cashing out food stamp
benefits to clients who have earnings of $350 a month for 3 con-
secutive months. We are also going to require all minors with chil-
dren to live in adult-supervised settings and to attend school.

We are going to also significantly reduce the length of the assist-
ance application, making it easier to understand and easier to
complete. This will also reduce the time our caseworkers and our
families are spending doing paperwork. We are going to make the
Family Independence Program eligibility requirements, in terms of
income and assets and how we count recipient groups, less complex
and standardize them when at all possible with food stamps and
medical assistance.

The success of To Strengthen Michigan Families proves I think
beyond a shadow of a doubt that States, given sufficient freedom
from restrictive Federal mandates, can easily accomplish much
more than the Federal Government in administering humane, ef-
fective, and efficient welfare reforms. If Congress will provide the
tools we need by allowing us to consolidate programs, to transfer
resources as we see fit, and allow us to carry forward funds to ad-
dress emergencies and contingencies, I am firmly convinced that
the result will be a greater benefit for the people we serve, the fam-
ilies of Michigan, Er State government, and for Michigan tax-
payers.

Thanks very much, and I would be happy to answer any ques-
tions you might have.

Chairman SHAW. Thank you very much.

Mr. Gallant.


86

Ms. SCHULZ. In some respects you might say that. I think that
I would just like to respond to the issue of voluntary.

One of the aspects I think of New Hope that can stand is that
this could be a strategy. So that as you talk about phasing in, that
the idea of who so ever will, let them come, and let them come
first, may be a way in which to identify those people that are, as
we might define, New Hope ready. That I am ready to work. That
this seems reasonable with the kinds of supports that can be given.

I would agree absolutely that that is not, and we have not said
that we think that New Hope—my final words—is the answer for
everyone. But there is a way in which I believe that New Hope can
be effective as a strategy for determining who might come in in a
voluntary method. There are some ways in which, again there is
a lot that we have already learned about, as Larry has talked
about, the administration of this kind of mechanism.

Ms. GUERON. I would strongly agree with Dr. Mead that achiev-
ing a 50-percent participation rate at 20 hours a week would be an
extraordinary change from the current system. It is way beyond
where the current system is. It is dramatic. You should not think
of the rate in JOBS as 20 percent compared to a proposed 50 per-
cent. You have to also realize that you are tripling the denomina-
tor. So that it is not just moving from 20 to 50 percent, it is an
enormous change from where we are right now.

Sometimes people forget that there is this huge denominator
change in the current bill that makes this very demanding for
States to do. It is all adults, as Larry said, not the JOBS-manda-
tory group. So it is very different. I think it is a mistake to have
35 hours.

I also ask, what are you paying for? What is the goal? Is the goal
a kind of pound of flesh? Do you just want to say that the welfare
mother at this, probably unpaid, activity is there more hours and
you are paying child care? Or is your goal to get her off of welfare?

Just keeping people busy—to have the whole system run with a
vision that its goal is keeping people busy versus getting people
off—is a mistake. Your ultimate goal is getting people off of wel-
fare. Do not divert the system to keeping people busy. Twenty
hours a week is a lot of busyness already. Then focus your energy
on getting them off. So I think that this march up in hours is a
mistake.

Chairman SHAw. A couple of our Members indicated at the early
part of this hearing, questions as to the point of this hearing. I
think it is clear that Congress is continuing to go through a learn-
ing process and as we get further and further into welfare reform,
we are going to have to make midcourse adjustments. Our wit-
nesses today have certainly made some strong cases of some things
that we should be taking a look at at an early date.

I want to thank each one of you for bringing your thoughts and
positions to this Committee. It has been very important to us.
Thank you very much.

The Committee will stand adjourned.

(Whereupon, at 2:14 p.m., the hearing was adjourned.]

[A submission for the record follows:]


73

development, rather than having a child. Since those without chil-
dren require no child care, the cost of support to these individuals
and couples is minimal in our budget.

The provision of community service jobs for those unemployed
after an 8-week job search is an integral part of the transition to
regular work. It reinforces that if you work, you will be above pov-
erty. If regular work hours are suddenly reduced, the provision of
a community service job to supplement in order to meet the re-
quirement of 30 hours of work to get the New Hope benefits is im-
portant.

Flexible programming enables participants to meet their needs.
Many participants have opted not to, in fact, accept a community
service job but to continue to look for work on their own. So about.
38 percent of those eligible for community service jobs have accept-

it.

The power of welfare reform lies in adequate funding to support
State programs; that is, support for demonstrations. The private
corporate sector validates the importance of research and develop-
ment. Demonstrations aid in the appropriate and effective develop-
ment of public policy. New Hope has been able to provide direct in-
formation to the State of Wisconsin in its development of Works for
Wisconsin, the welfare alternative under Governor Thompson.

Child care and health care benefits have been accepted as nec-
essary and basic components of reform. The availability of these
supports permits individuals to start and stay working. Community
service jobs, as child care and health care, are an important part
of a work package. Not everyone needs it, but limited utilization
should not necessarily negate the importance and the value of it
being a part of the package.

New Hope’s wage supplement builds on the State and Federal
earned income tax credits. The earned income tax credit and the
tax system work together with welfare reform, and so while we
look at that I would hope that tax reform would be a part of wel-
fare reform. While I understand that this Subcommittee’s focus is
on welfare reform, tax reform and welfare reform do work hand in
hand in order to help and enable people to move out of a condition
of poverty into being wage earners and into independence.

The power of New Hope does not lie in it being the total answer,
but the power is the provision of a flexible and adaptive work-
based model as a key to welfare reform.

Thank you.

{The prepared statement follows:]


58

for 2 years is stay at home and do nothing. After that they have
to be making some effort toward work, and Ms. Peterson is a per-
fect example of someone who did that.

Mr. Forp. But it has been over 5 years now, right, Ms. Peterson?

Ms. PETERSON. It has been about 4 years.

Mr. Forb. Been about 4 years, and you are still dependent upon
some of the transitional services.

Ms. PETERSON. I do not get food stamps anymore. I do get some
help from a rental assistance that is escrowing money toward the
purchase of a house at this point, and Medicaid which is extended
1 year beyond when my case closed.

Mr. Forp. | am not sure under their plan that you would have
that transitional child care for your children.

Ms. PETERSON. One thing being on welfare teaches you is that
you make do with what you have, and you find a way, and you
make it work. I think that most of us have had to do that whether
it is——

Mr. For. Right, and I find it to be true that you are good budg-
et managers.

Ms. PETERSON. Another case in point for having more time with
the caseworker who can look you in the face and provide encour-
agement, look you in the face and say, I know how that will work,
or here is a place where you can get this service or get this item
or something that you need cheaper. Somebody to work with you.

I am actually in favor of the welfare reforms that have come
down. The changes that Michigan has made have been positive
changes. We do not need to be as soft as it has been. I am moti-
vated. But other people are not. There needs to be a little bit of
a push to motivate people to work, to get a feel of what that is like,
to make them be responsible.

Mr. Forb. Are you familiar with the welfare bill that is before
the Committee?

Ms. PETERSON. I looked it over somewhat and, for the most part,
I was in agreement with it.

Mr. Ford. When they invited you to the Committee, did they
send you a copy of the bill?

Ms. PETERSON. No, I looked it over after I—

Mr. Forp. Did you look over the bill with Ms. Page? Did Ms.
Page talk with you about it?

Ms. PETERSON. No, nobody showed me what to look at. I found
information for myself.

Mr. ForD. I do not know, Ms. Peterson. I still do not understand
why we are here today. I said earlier——

Chairman Suaw. I think you learned something. You just
learned that Ms. Peterson would qualify under the plan and that
she would have been a success story under the plan. So I think any
day you come to a hearing and learn something about a bill that
you are voting on, that is a good day.

Mr. Forp. I did not necessarily say that I learned that. I am still
confused about the Newt Gingrich welfare plan that is before the
Committee and how Ms. Peterson would be impacted by this bill.
I certainly agree with you, that work is a lot better than welfare.
I think that most welfare recipients are just like you. You are able


6

effort will only come after a veto. If you are willing to begin it be-
fore then, we stand ready.

Chairman SHaw. Thank you, Sandy.

If the first panel would come up to the witness table, I will call

ou in the order that you will be recognized to testify. Carmen
Nazario, who is the secretary of the Delaware Department of
Health and Social Services in New Castle, Delaware; Stephanie
Comai-Page, social welfare policy advisor and Federal liaison for
the director of the Michigan Department of Social Services in Lan-
sing, Michigan; Joseph Gallant, who is the commissioner of the
Massachusetts Department of Transitional Assistance in Boston,
Massachusetts. Also on the panel is Mr. Schilling from Wisconsin,
but I think there is some weather problem involving his transpor-
tation by air, so we will recognize him after he gets here.

Ms. Nazario, if you would proceed as you see fit. All of your writ-
ten testimony will be made a part of the record and you are urged
to summarize it.

STATEMENT OF CARMEN NAZARIO, SECRETARY, DELAWARE
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, NEW
CASTLE, DELAWARE

Ms. Nazario. Thank you, Mr. Chairman. Good morning, Mem-
bers of the Committee. October 1 of this year marked the official
start of Governor Carper’s welfare reform initiative in Delaware
called A Better Chance. Although our initiative is new, our experi-
ence with welfare is not. The Governor’s proposal represents a com-
bination of Delaware’s experience and was developed in conjunction
with preeminent public policy thinkers in our State and around the
country. The Governor’s vision is consistent with many of his col-
leagues in State houses around the country and with many of his
former colleagues in Congress.

I would like to take this opportunity today to describe Delaware's
initiative to discuss problems envisioned by the current national re-
form efforts, particularly in the area of child care, and offer some
recommendations for modifications to improve our chance of provid-
inga better chance for Delawareans.

‘ive key elements form the basis of A Better Chance in Dela-
ware. One, work should pay more than welfare; two, welfare recipi-
ents must exercise personal responsibility in exchange for benefits;
three, welfare should be transitional; four, both parents are respon-
sible for supporting their children; and five, the formation and
maintenance of two-parent families should be encouraged and teen
pregnancy should be aggressively discouraged.

Work must pay more than welfare is our first principle. We be-
lieve that making work pay more than welfare is critical in our
State. A Better Chance will allow welfare parents who take an
entry level job to keep part of their benefits.

The exercise of personal responsibility is part of the mutuality of
the so-called social contract. Our plan expects clients to cooperate
fully in establishing paternity, as well as to complete parenting
classes and family planning.

Welfare should be transitional. We believe it should not be a way
of life, but rather a time-limited program focused on moving per-
sons back to self-sufficiency. By 1997 there will be a 2-year time


29

Mr. ENGLISH. So additional research might be helpful. Mr.
Gallant.

Mr. GALLANT. Again, like my colleagues, we are in the process
of evaluating and studying that whole issue. I must say, however,
that the more flexibility we feel we have relative to the SSI pro-

am, the better we like it. We are what they call a supplement.

tate and in Massachusetts we spend approximately $200 million
a year in just supplemented benefits to SSI cases. We have no con-
trol over that $200 million that we spend because it is all adminis-
tered, as you all know, by the Social Security Administration.

We intend very seriously, in fact the Governor has filed two bills
thus far in two separate years to withdraw us from the supple-
ment, as a supplement State, so that we can, in fact, get control
over the funds that we are spending and to better manage it in our
opinion. So that the $200 million that we are currently spending
on the supplement would in fact be, in our opinion, better used.

Mr. ENGLISH. Another area where we are looking at providing

eater flexibility has to do with an issue which Mr. Camp particu-
forly focused on at the Subcommittee level and I strongly supported
him and that is, low-income energy assistance. Given the projected
changes in some of the Federal programs and the real needs in all
three of your States, would you like the flexibility to use block
grant dollars for low-income energy assistance? Ms. Page.

Ms. Comal-PaGE. Are you suggesting perhaps putting the
LIHEAP dollars into the block grant?

Mr. ENGLISH. Or certainly allowing block grant dollars to be used
for a LIHEAP-like program.

Ms. Comal-PaGcE. That would certainly be helpful. I would point
out that the majority of people on LIHEAP in Michigan are dis-
abled. They are elderly. They are not the typical population we are
talking about here today.

Mr. ENGLISH. Ms. Nazario.

Ms. NAzaRIO. Since the block grant dollars are not sufficient, we
estimate over the 5-year period almost $70 million shortfall from
anticipated funds for Delaware. We would not be supportive of in-
cluding LIHEAP. Like Michigan, many of our people——

Mr. ENGLISH. You would not be supportive of being able to use
Federal dollars for LIHEAP purposes?

Ms. Nazario. Yes, I thought you were talking about the same
block grant to use moneys from the——

Mr. ENGLISH. So if you have savings at one end of the program,
you would not be in favor of having the option of using it for energy
assistance?

Ms. Nazario. Of course, the option should be there. I would sup-
port that. We can transfer dollars now, but what I am trying to say
is that just to include LIHEAP as part of the block grant would not
help Delaware. It seems the shortfall from the block grant are al-
ready quite sizable.

Mr. ENGLISH. And that is the general argument you have made.
Mr. Gallant.

Mr. GALLANT. I have to beg out of this one because I do not ad-
minister the block grant or have anything to do with the LIHEAP
funds.

Mr. ENGLISH. Thank you, Mr. Chairman.


65

and different views as to the causes of poverty; in part, the enormous inertia that makes it so
hard to change large systems. But in part this also reflects a lack of money. Simply put, as
this Committee knows, it requires a substantial up-front investment of funds to reap the down-
stream benefit of more people working and reduced welfare costs. Moreover, these efforts are
‘no panacea. Even in these three locations, many people remained on welfare and many
children in poverty.

While the success is only partial, it is dramatic nonetheless, a clear challenge to
administrators and policymakers: to spread best practices to other locations and identify even
more successful ways to require, encourage, and support parents in moving into the labor
force.

This year’s Congressional debate has resonated with an almost unanimous pro-work
message, and the Personal Responsibility and Work Opportunity Act of 1995 calis on states to
‘get unprecedented numbers of people on welfare participating in work activities, eventually for
35 hours a week. While this would seem to promote the replication of the successful practices
Thave described, there is a real risk that it will do the reverse, and instead threaten the very
work programs we are celebrating today.

I want to conclude my testimony with the three reasons for my concern.

‘The first is money. In work programs, time is money. Congress can legislate higher
participation rates, but, as this Committee’s earlier actions recognized, states will need more
money up-front to make them real. Yet the bill eliminates the Job Opportunities and Basic
Skills Training (JOBS) program — which funded the Grand Rapids, Atlanta, and Riverside
successes ~ and folds the money from JOBS into one block grant with funds from the AFDC
cash grant program. Further, it freezes funding for the combined block grant at current levels,
despite the requirement that states meet rates for participation in publicly supported work
activities that escalate sharply in future years. Under fiscal pressure and with short time
horizons, states may hesitate to make the up-front investments that can both produce future
savings and transform welfare into the work-directed programs favored by most Americans.
This is because, unless states are willing to raise taxes to cover the short-term costs of these
programs or really can substantially reduce outlays on grants (and withstand pressure to return
the savings to taxpayers), the new combined block grant for benefits and work programs may
create perverse incentives as states trade off maintaining monthly benefits against expanding
work programs,

‘The second is what we know about the feasibility of the rates in the bill. Despite their
well-earned reputation for being the most mandatory in their states, the Grand Rapids and
Riverside programs (as well as the one in Atlanta) would have failed the participation rates
ultimately catled for in the Personal Responsibility and Work Opportunity Act. Not enough
people were reached; they were involved in activities that the bill does not count; and they
participated for fewer hours per week than the bill accepts.

‘The third is the risk that meeting the bitl’s mandates will undermine the very successes
‘Congress and the states hope to promote. ‘These three programs were effective
strators made smart choices about the use of resources, the management of staff,
and the message they communicated. Past research provides a warning that spreading program
resources very thin or spending them on activities that do not promote unsubsidized work can
reduce success. It can also reduce cost-effectiveness. Pushing for higher and higher
participation rates and hours — particularly the push from 20 to 35 hours of activity in every
‘week — requires states to dramatically increase child care outlays. Yet we have no evidence
that the longer hours will lead to any corresponding increase in program accomplishments.

In conclusion, everyone claims to favor work and a new work-based bargain. But this
is only talk unless there is an adequate initial investment and clear incentives for states to
transform welfare. In the past, reformers have succumbed to the temptation to promise more
than they have been willing to pay for. This is one of the reasons why the reality of reform
has always fallen short of the rhetoric and why reform has usually generated much heat, but
little light. We are now — in the successes we are celebrating today — starting to see some
light, We should move toward it. Matching resources to our words is one way to do it.


67

vored under the JOBS Program and toward actual working, activi-
ties involving actual work.

Indeed, I would go a little further. The bill, as I read it, does not
require up front job search. I would have mandated that as well.
I would have said people in this program have to look for work up
front. That has to be a mandated activity.

So in these ways, the standards are tougher. But the bill, I think,
fees too far in one particular area especially, and that is the 35-

our activity criterion for the years toward the end of the period
we are talking about. Judy has alluded to this. I do not think 35
hours is enforceable. I would rather have the 20 hours that we now
have as the norm under the current regulations and have that be
really enforced. I think that is a more effective way of changing
welfare than aiming for 35 hours.

The problem I see is that these standards, although in general
they are desirable, are not fully credible because of the rest of the
bill. Judy has mentioned the dismantling of the JOBS Program and
the lack of any dedicated money for work programs. States might
decide to use the JOBS money simply to maintain benefits in the
face of Federal cuts rather than using it to go on enforcing work.
Particularly, the penalty that States face for failure to meet the
work requirements; namely, a 5-percent cut in the block grant, is
probably not enough to keep many of them from deciding that it
might be better simply to take the penalty than embark on the dif-
ficult business of enforcing work.

Now I do not entirely agree with the position of CBO and some
other estimators that Yuilding up work programs has to involve
significant new dollars. I do not think that is true. MDRC finds
that good programs save money for government. As far as I can
see, the main need is to reprogram money from education and
training into case management so as to enforce participation in the
programs and enforce job search. If you do these things you save
money very quickly. There may be a very short run of front-end in-
vestment in terms of additional staff and child care, but I do not
see that as nearly as large an investment as some people have
maintained.

I think well-structured programs can save money for government
very quickly by driving the caseload down. The main difficulty in
getting to those programs is not money primarily but administra-
tive reforms: gearing up the programs in such a way that they ac-
tually have the case management and the oversight capability, and
the computer capability to follow the caseload and get on top of it.

Nevertheless, having said that, there is no question that the com-
bination of less money plus the relatively limited sanction for non-
compliance is going to tempt a lot of States, especially the large,
liberal States with big caseloads to opt out of these work require-
ments. I think that would be disastrous. The effect of that would
be effectively to dismantle work enforcement in the United States.

These States might take the penalty. If there are many of them,
they would probably come back to Congress and try to get exempt-
ed from the penalty, change the standards, negotiate over this as
they have over other penalty welfare provisions going back a couple
of decades. The effect will be to eliminate effective work enforce-
ment as part of welfare. Then the States will have no way to con-


68

trol the caseload except simply to cut people off by trimming bene-
fits or eligibility. That is not what the public wants. It is not the
most effective way to reform welfare.

So my recommendation would be to raise the penalty to non-
compliance to something over 5 percent of the grant. At the same
time, cut the hours requirement from 35 to 20 and enforce it more
seriously. That is a more realistic combination of requirements.
Perhaps earmark some funds for work enforcement rather than
fold JOBS into the block grant. As a final step—I would avoid this
if possible—maybe stretch out the implementation for a couple
more years, because the 50 percent is going to be very tough for
a lot of States to reach.

In the end what you are facing here is an ambiguity about the
block grant. Congress is saying we are turning over welfare polic;
to the States. On the other hand, we have these tough work stand-
ards. I think in the end you cannot have it both ways. H.R. 4 has
to be either a work program or a block grant.

I would recommend that you turn it into a work program, that.
you give some serious attention to these details I am talking about
either in the remaining legislative process or later in the regulatory
process. Mr. Chairman, you said there is going to be ongoing atten-
tion in this area and these are the sort of things that I think you
are going to have to keep looking at in the years ahead.

Thank you.

(The prepared statement follows:]


26

shore up those issues. But it is very important that we not lose
focus of the real intent of this Congress and welfare reform is just
a small part of it.

But the overall issue is a balanced budget and the vast majority
of the people in this country want not only welfare reform, they
want tax reform; they want Medicare reform; they want Medicaid
reform; they want a balanced budget. That is what is important.

Thank each of you for coming today.

Chairman SHaw. Mr. Ford.

Mr. Forp. Thank you, Mr. Chairman. Mr. Gallant, you were
talking earlier about the good things that were going on in your
home State. The Family Support Act of 1988, does that play any
role in what——

Mr. GALLANT. Sure. It was the Family Support Act of 1988 which
mandated the community service and work requirement for all of
the two-parent families.

Mr. Forp. With President Clinton’s strong commitment to State
flexibility, is that helping you with any of your waivers and other
things that you are doing in your State?

Mr. GALLANT. I am sorry. What do you mean?

Mr. Forb. The President is committed to State flexibility, no
doubt when we see all of the waivers that are coming from Hns

Mr. GALLANT. To a point, he is interested in flexibility.

Mr. Forp. Although he wants some accountability with that.

Mr. GALLANT. Accountability, but there was a prolonged negotia-
tion, if you will, with Massachusetts before Massachusetts got part
of its waiver. And the most important piece, that we felt was the
most important piece, the 2-year limit, the Federal Government
was not flexible on and would not grant us what we wanted around
the 2-year limit.

Mr. Forb. But a lot of the good things that are taking place
today in your State is because of this Family Support Act and the
things that are going on, other than Democratic Neadership in this
Congress, not this so-called Republican, mean-spirited welfare
package?

Mr. GALLANT. No, I think a lot of it is due to Governor Weld and
his initiatives and his foresight in a lot of these welfare issues.

Mr. Forp. Have you studied the House version of this welfare
package?

Mr. GALLANT. Not in any depth.

Mr. Forp. Other than certain provisions that you have already
talked about today. I mean, you are not that familiar with it?

Mr. GALLANT. Not with a lot of the specifics, no, sir, I am not.

Mr. Forp. I do not know why these witnesses are all here. We
are talking about this welfare package that is coming out of the
conference committee with the House version and the Senate ver-
sion being, I guess put together. But what we want to do, and I
want to ask you directly, what you have seen so far, do you think
that children will be hurt if this welfare package is enacted the
way the House version language is reflected?

Mr. GALLANT. Quite to the contrary. I think that there is kind
of an attitude here in Washington, and I am talking in general that
the compassion is centered only here in this State, that compassion
and wanting to help people does not exist in the States. I totally


78

I think it is hard to know what will happen next in welfare re-
form. As I have expressed to you, I think the preference would
have been to try to develop a bipartisan bill. I think that is doable.

I think a course has been chosen so far different than that, and
I think if it is pursued the President will veto the bill and then we
will sit down and try to work this out. And when we do, I think
very much we will be referring to the testimony of the three of you.
I hope we will take the warnings and the suggestions seriously be-
cause we need welfare reform so badly that we need to make sure
it is workable welfare reform.

There is no use in going through the motions here or instituting
a bill that is sufficiently off the mark that we just have to not re-
visit it, we will always do that, but restructure it. I think the
present conference report is that far off the mark, but I think there
is enough common ground for us to pursue it.

So my guess is that you will be hearing from us and we will be
reading you, all three of you. Thank you very much.

Chairman SHAw. Mr. McCrery.

Mr. McCrery. Thank you, Mr. Chairman.

Dr. Gueron, you talked about work requirements and how per-
haps the legislation is too restrictive in defining how a State can
satisfy its work participation requirements. First of all, let me just
point out that there is no restriction in the bill to States using the

lock grant funds to continue assistance for someone who is in
training or education. They just cannot count that person toward
satisfying the work requirements in the bill.

How do you think we should define work requirements? Do you
think we ought to have specific participation requirements in the
bill? If so, how do you think we ought to define work to allow
States to satisfy those participation rates?

Ms. GUERON. I think the American public has said over and over
again that they think people on welfare should be doing something.
I take that to heart. I think participation requirements reflect what
people want to see. So that is for starters.

I think, unfortunately, it always appears as if one ought to be
able to meet a 100-percent participation rate and that 50 percent
is not a high standard. What I tried to say in my remarks is that
the most successful programs we have ever measured reliably in
research would have failed the participation standards in the bill.
I do not want to send a message to those programs that they have
to do something different, because they are doing the most success-
ful thing we have seen so far.

So it seems to me that if the most successful programs are going
to fail your standard, you have a problem. One of the things that
I see as a problem is only counting activities that are 35 hours a
week. I do not want to pay for seat time. I do not think the Amer-
ican public wants to pay for child care for people just to fill up the
hours. It is too expensive.

When we were studying programs during the eighties, I was al-
ways struck by the ingenuity of States running workfare programs
for women. They used to schedule them around the school calendar
to save child care money. It was not that they were soft, but they
did not have the child care money, so they would schedule workfare
slots around school hours and they actually, in West Virginia I re-


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‘At atoments and any scompanying exis fr pefating must be ryped in ne space ou opabstse paper and may oot exceed 2
total of 10 page nladngataehment,

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‘ference and quoted ot paraphrated All esi matarta ot moetng thse apecfeations wl be malstalned in the Commitiae es for review
‘undue by he Commitee,

sural it Smeg bearing ming enn ered oa oe beg ng
a eapent to rogue fr must incade oo bs it of al eat,
Deru oerputin sr whar wale wes pers

ao soot mast ack ting te ase, fal dren, mabe were he witnas or ha
‘ucigaated representative may be reached and a topeal oulina or summary ef the comments and recammendations i th ul statement. Tis
‘mpplamentl abot wil ot be Incinded nthe pated record.

apply ely to maria being fo prating, Stamens and exis or
ssh wly fran tr eb. es a te beng eer fp ering ay breeder ra

Note: All Committee advisories and news releases are now available over the Internet at
‘GOPHER.HOUSE.GOV' under 'HOUSE COMMITTEE INFORMATION’.


ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HUMAN RESOURCES,

FOR IMMEDIATE RELEASE CONTACT: (202) 225-1025
‘November 29, 1995
No, HR-8

Shaw Announces Hearing on
Welfare Reform Success Stories

Congressman E. Clay Shaw, Jr. (R-FL), Chairman of the Subcommittee on Human
Resources of the Committee on Ways and Means, today announced that the Subcommittee will
hold a hearing on current welfare reform success stories. The hearing will take place on
Wednesday, December 6, 1995, in room B-318 of the Rayburn House Office Building,
beginning at 10:00 a.m.

Due to time constraints, oral testimony at this hearing will be heard from invited
witnesses only. Witnesses will include State and local welfare program administrators and
also former welfare recipients. However, any individual or organization may sub:
written statement for consideration by the Subcommittee and for inclusion in the printed
record of the hearing.

BACKGROUND:

As the Congress completes action on legislation to reform welfare, the Subcommittee is
interested in examining State welfare reforms that have begun improving the lives of families
formerly trapped in poverty.

The hearing will highlight the views of two important groups in the welfare reform
debate. First, the Subcommittee will hear from State and local officials who have already
implemented changes that replace the welfare status quo with policies that emphasize work and
opportunity. Witnesses tentatively scheduled to appear include State and local welfare program
directors from Virginia, Michigan, and Wisconsin. Programs in each area have succeeded in
reducing welfare dependence and getting welfare families into work.

‘The Subcommittee will also hear from former welfare recipients who no longer depend
on government aid. These individuals will offer their own views of needed welfare changes,
drawing from personal experience, describing how best to reform welfare.

In announcing the hearing, Chairman Shaw stated: "As Congress and the President enter
the final stages of reforming welfare, it's important to focus on the promise that welfare reform
holds by looking at what is already happening so successfully in the various States."

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 at least six (6) copies of their statement, with their address and date
of hearing noted, by the close of business Wednesday, December 20, 1995, to Phillip D.
Moseley, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102
Longworth House Office Building, Washington, D.C. 20515. If those filing written statements
wish to have their statements distributed to the press and interested public at the hearing, they
may deliver 200 additional copies for this purpose to the Subcommittee on Human Resources
office, room B-317 of the Rayburn House Office Building, at least one hour before the hearing
begins.


15

STATEMENT OF JOSEPH GALLANT, COMMISSIONER, MASSA-
CHUSETTS DEPARTMENT OF TRANSITIONAL ASSISTANCE,
BOSTON, MASSACHUSETTS

Mr. GALLANT. Thank you, Mr. Chairman. It is a privilege for me
to appear before this Committee today to illustrate the bold and in-
novative initiatives that are the key ingredients for welfare reform
in Massachusetts. Thanks to the vision and determination of Gov-
ernor Weld, who refused to accept any plan in which work for the
able bodied was not the cornerstone, we have set out to break the
cycle of poverty and welfare dependency by insisting that able-
bodied individuals and also the heads of households achieve
self-sufficiency and personal independence.

Beginning in 1991, statewide programs we implemented have re-
sulted in reduction of our general assistance and AFDC caseloads.
In general assistance we have reduced expenditures from about
$200 million per year to $90 million as that caseload has plum-
meted from more than 38,000 cases to about 17,000. An improved
economy, better management of the programs, and the onset of
welfare reform have helped to drive the overall AFDC caseload
down from 113,220 to 90,067, or 20 percent between October 1993
and November 1995.

In 2 years my department will have returned approximately
$100 million in AFDC savings to the taxpayers. Still, we are not
satisfied. Massive reforms implemented just 5 weeks ago include
work or community service for the approximately 22,000 able-
bodied AFDC recipients within 60 days, no cash benefits for addi-
tional children born to recipients, requirements that teen parents
finish high school and live at home or in a structured setting, regu-
lar school attendance, strong paternity establishment and child
support enforcement, up-to-date immunizations for all children, a
2.75-percent benefit reduction complemented by a generous income
disregard that allows working recipients to keep more of the money
they earn on the job, and the electronic fingerprinting pilot. These
are some of the measures that we have embarked on.

We enter this program with great enthusiasm. Our optimistic
outlook is supported by our past and present successes. Specifi-
cally, I want to mention the TEMP-UP, Transitional Employment
for Massachusetts Parents for the Unemployed Parent. Developed
in 1993 it requires work or community service for at least one par-
ent in a two-parent family. The results have been outstanding.
While a 20-percent AFDC caseload reduction is commendable, the
two-parent caseload during that same period since the development
of TEMP-UP went from 6,022 to 2,593; a dramatic decline of near-
ly 57 percent—57 percent, Mr. Chairman. This chart basically il-
lustrates the dramatic decline in that caseload from over 6,000
down to 2,500.

From the original 6,000 two-parent families on the rolls 2 years
ago, only 513 remain on AFDC rolls today. Of that 513, 456 are
now either working or in community service. Again, this chart will
dramatically show the number of cases that were on in October
1993, and actually the same people who were on in October 1993,
the amount of people who are there now is dramatically reduced.

I must point out that we are not talking about 6,000 families, by
the way. That is how many families who were on the two-parent


5

is one that many Democrats can and will support, especially given
that they have already publicly supported a similar bill.

Turning to the administration, I call upon the President to sign
this bill. Welfare reform is too important to play politics with. If
President Clinton vetoes this bill, we will demonstrate to the Amer-
ican people that “ending welfare as we know it” was just a cam-
paign slogan, not a meaningful promise. He should sign this bill.

I would like at this time to yield to the gentleman from Ten-
nessee, Mr. Ford, for his opening statement.

Mr. Forp. Thank you very much, Mr. Chairman. Mr. Chairman,
Tam going to yield to Mr. Levin for an opening statement on this
side of the aisle.

Chairman SHaw. Mr. Levin.

Mr. Levin. Thank you very much, Mr. Chairman. Democrats
favor welfare reform, major welfare reform. For example, I have
worked with many of my colleagues here on the Democratic side
since the mideighties including an early legislative effort, then
again the JOBS bill, and again actively helping to shape the House
Democratic alternative that received the support of every single
Democrat who voted on this major issue earlier this year. I do be-
lieve it is useful to hear today the stories of actions in the States.
Our House Democratic alternative provided major new funding for
the States.

I also think it would be useful for each of the witnesses reflectin,
on the experience in their State, to ask themselves seriously and
to give their views on the bill that is presently in conference and
apparently has the support of all of the Republican conferees ex-
cept on the outstanding issue of block granting school lunch.

‘We would be interested in any comments from the witnesses on
questions like this: Do they favor the provisions on SSI for children
that could cut the ability of 500,000 families to care for children
disabled with cerebral palsy, Down syndrome, muscular dystrophy,
or cystic fibrosis? And do they favor a bill that has a contingency
fund that is so small that it is certain that during the next eco-
nomic downturn their States, or at least most of the States would
be incapable of coping with the increase in demand?

Do they support block granting child nutrition programs, capping
funds, and making major cuts in food stamp programs? Do they
support a bill with moneys for child care that, in view of the par-
ticipation rates, clearly will be inadequate? Do they favor block
granting foster care?

Mr. Chairman, we have not seen the document you referred to.
We will look at it with interest. Thus far, Democrats have not been
involved in any part of the conference procedure. We have not been
asked our position. We have not been asked for suggestions. We
have not been asked to participate in any way. It is not because
we have not been involved, it is because of the substance of this
conference report that I think will lead to the President, as he has
said clearly, vetoing it, and Democrats in the House and the Senate
not supporting it.

We want welfare reform. As I have mentioned to you, as our
Chairman Mr. Ford has mentioned to you, as Mrs. Kennelly has
said very clearly, we are willing to work together on a bipartisan
basis for true welfare reform. I am afraid that that bipartisan


87

STATEMENT OF PAM CAVE
CHANTILLY, VA

Onty Peopte Can Be Parents...

Onty peopte can ke parents. Government services centainty cannot
adequately replace the tangikle kenefits of parents fon children.
Of course situations do exist where there ane not parents for
children. These situations are heart-wrenching. But, these situa-
tions are not the “nor,

The avenage family that receives an Aid to Families with
Dependent Chifdaen check in our countay today is headed by a
twenty-six year-old, caucasian, fenate, divorced, with two,
young children. (National Woman's Law Center). This family
qualifies for assistance kecause they are not receiving support
and/or paovision from the aksent parent, If they wene, they
would not qualify for AFDC. It's that simpbe.

Ye can make “these” people work, We can get them joks. We can
get then heakthcare. We can provide transportation, We can even
provide twenty-four hour a day childcare. But, we will not solve
the "welfare proklem". The proklem is much deepen than meeting
these needs.

Oun American conscience must take the stand that parents must
provide for oun chikdren. We should take this stand in our
courts, in our famibies, in our communities, in our government,
in our poticies, in our places of empLoyment, hut most of abl,
in the examples that we set as individuals. If parents did pro-
vide for thein children, there would he no need for Long, Life-
entrenching refationshins with AFDC. Too often, we have &ecome
a cu€ture of tistening to and accepting excuses. We are blessed
ic have wonderful, individual freedoms in cua countay, but,
fately, the desine to pursue individual freedoms seems to over-
shadow and overpower the consequences of individual actions.

Late one evening several years ago, my huskand Left our
apartment. I was expecting at the time. I had sevenal small
chifdaen to care for, and my huskand was working for the family.
He simply took the can and left. He gave me no explanation,

No numhen at which I coukd reach him. In a panic, I catked his
employer for information. He would give me none. My huskand

was not conceaned akout me on the kids, but he did take the
cakle television Rox. It was this act that enakled me to find
him Living with another woman in the same town.

I sought help from the family court to ask for child support.
After waiting three weeks for an appointment, I was then told

I would have to wait several months for a court date. But, I
had chitdren to cane for and expenses to meet. What akout these
ongoing needs? The couat staff advised me to go to social
seavices, I have Learned since then that they must often make
such refernals and that suksequent to such a situation, a fanity
may never receive child support ut may need social seavices
for years.


80

That is not primarily a money problem. The key is getting the or-
ganization to supervise the caseload closely enough to obtain the 20
ours.

If you could enforce 20 hours on even a majority of the employ-
able adults on welfare, you would transform welfare. If you could
do that in even one locality, you would transform welfare.

Mr. McCrery. Why?

Mr. MEaD. Because then it would be normal, in some sense, for
people to be working at least half time. You would have at least
half the people working at least half the time. That would change
the entire atmosphere surrounding welfare and low-income areas
in this country, especially in the cities and, to a lesser extent, out-
side the city.

Mr. McCrery. Why?

Mr. MEaD. Because now people would understand, as they do not
really understand now, that going on welfare involves lear cut
work obligations. Right now the majority of the caseload has an im-
pression that when you go on welfare, you get aid for sure because
you are income eligible. Then what else you have to do is incidental
and somewhat capricious. It depends upon who happens to get
called in to JOBS. It depends on how you are assigned. It depends
on a whole lot of things.

As a result, it is seen as busy work, as a formality, as something
that might hit a few—it is like the draft used to be in Vietnam.
A few people might be drafted, but you did not expect that most.
people were going to have their lives interrupted.

Well, you have got to change that. You have got to make it clear
that if you go on welfare, it is like going into the Army today. You
really are going to have to do something for sure, not just a few
people have to do it, not just a minority, but a majority of the
adults and potentially all of them, those that are defined as em-
ployable.

Mr. McCrery. What beneficial effect will that have on the wel-
fare recipients?

Mr. MEaD. Well, from what we can tell, the first thing it pro-
duces is sharply higher earnings and employment and somewhat
lower dependency as the rolls drop. It is not enough to eliminate
welfare, but to judge from the Wisconsin experience—and I think
we are going to see this in other States—it is enough to drive the
rolls down 20 to 30 percent fairly quickly, if you are determined
about it.

So you reduce the welfare rolls, you improve the life of the people
who are on the welfare rolls. We have some information that this
is also good for the kids. Although the mother has less time to
worry about child-rearing since she is working, the quality of the
time with the child improves, morale improves. The child has an
example of someone functioning outside of the home and adopts a
more positive attitude to school.

So it is very clear that morale improves for the welfare recipient.
This is not a punitive thing. For them work is positive, and that
is true even for clients who were assigned to the most apparently
thankless assignment, namely unpaid work. We have surveys that
MDRC has done that show the surprisingly positive reaction of the


83

So I think not having dedicated resources for work programs is
also a mistake.

Mr. McCrery. Are you aware that we are about, we hope in the
not too distant future, to send to the President a bill that consoli-
dates over 100 Federal job training programs and block grant the
funding to the States? Five billion dollars’ worth of training funds
that they can use for these purposes?

Ms. GUERON. I am aware, but I am also aware that at a State
level there will be a great tension on whether welfare recipients or
displaced workers or who gets these resources.

Mr. McCrery. These will be dedicated funds for only job training
and education. And yet, the States can use it for displaced workers,
but they can also use it for people on welfare. And many of those
displaced workers, as you know, become welfare recipients if they
do not find work soon after being displaced.

So the whole package, the flexibility with the block grant that
they can use for job training and education if they want, this new
$5 billion program in block grant that the States can use for job
training and education, the child care money that we are going to
put into this bill, amounts to $17 billion.

It just seems to me, if you look at the whole package and the
flexibility within that package, that the money is going to be there
for States who want to construct a program that is innovative, pro-
ductive, and accomplishes the goals that we all want to accomplish.
I do not think money is the question. I think the more important
question is the restrictive nature of the provisions in our bill that
are unattainable, unrealistic, and would cause unnecessary bur-
dens on the States to comply.

Mr. MEapD. I just want to speak to that matter, if I could. I would
not recommend that you deal with the excessive standards by al-
lowing the States to define what constitutes work activities. I think
that that could lead to sophistry on the part of States that are
going to present their programs as more demanding than they ac-
tually are.

The Michigan program, for example, based on presentations I
have heard, includes a lot of self-reported community activities as
work activity. To me, that is not accountable enough. That raises
the specter of mothers doing things that are allegedly in conformity
with the bill, but really do not involve a change of lifestyle, do not
involve consistent organized accountable effort, which is the thing
that we have reason to think has results for lives.

I would continue to define nationally what counts as work activ-
ity and which would have to be specified in regulations, but rather
cut back the hours requirement. Cut that back to 20 and have it
be seriouly enforced.

One of the strengths of the Family Support Act is that while the
definitions of employability were somewhat soft, participation was
precisely defined. The regulations set hard standards and the
were fairly well measured by the survey process at the State level.
And that meant the States really worried about meeting them.

There was one loophole, and that was the matter of how many
adults were mandatory. I would therefore shift to an all-adults cri-
terion, as you do in the bill. That is an improvement.


21

Chairman SHaw. Thank you.

Mr. Levin, you may inquire.

Mr. Levin. Let me ask, if I might, the other witnesses to com-
ment on Ms. Nazario’s testimony about child care. I wanted to start
with child care and then go on to other issues. Do you believe that
there is adequate funding as presently provided in the conference
document for child care?

Ms. Comal-PaGcE. As I understand, the bill would put an addi-
tional $2.5 billion into child care. We are projecting in Michigan
that we will have sufficient funds for child care. The bill allows us
to transfer dollars between the cash assistance block grant and the
child care block grant. We are projecting as well we are going to
get additional funds in the cash assistance block grant that exceed
our current caseload needs, so we will be able to cover child care
for all recipients. In fact, we have made a decision in Michigan that
unless child care is available, we will not sanction people, we will
not remove them from the rolls if, in fact, child care assistance is
not available. But we believe that funds will be available to serve
others who need it.

Mr. LEvIN. You would divert some moneys from other places, if
necessary?

Ms. Comal-PacE, That is correct.

Mr. Levin. Mr. Gallant.

Mr. GALLANT. As I understand it, and I am not that familiar
with the specific amounts of money available in the Federal bill,
but I understand that we would have the ability to transfer funds
from other parts of the block grant into child care if, in fact, we
needed them. Again, to reiterate what was said earlier, I think that
child care is the most important tool, the most important element
that we have to assure success of having people go to work.

Mr. LEvIN. Do you think it is an essential component of welfare?

Mr. GALLANT. I certainly do.

Mr. LEVIN. Have you made a careful analysis of the adequacy of
child care funds in Massachusetts? Your testimony, as I under-
stand it, focused on the two-parent caseload.

Mr. GALLANT. That is right.

Mr. LEVIN. By definition, I guess that will leave in most cases,
one parent?

Mr. GALLANT. Exactly.

Mr. LEvIN. In the vast majority of the cases in Massachusetts,
actually you see cases that are one parent, not two parents, right?

Mr. GALLANT. That is true, yes.

Mr. LEVIN. Could you assure this Subcommittee that there is
adequate funding, as far as you are concerned, for child care in
Massachusetts?

Mr. GaLiant. Additional child care funds to any administrator
like myself is always welcome, believe me, particularly when your
whole effort is trying to move people off of welfare into work. In
Massachusetts I am convinced that right now we have enough
funds to adequately handle our current AFDC caseload. In Massa-
chusetts we are going to spend this year about $120 million on
child care alone for our AFDC caseload. I also want to point out
that even though my testimony did, in fact, emphasize the two-
parent family, that there has been a dramatic decrease in the over-


WELFARE REFORM SUCCESS STORIES

HEARING

BEFORE THE

SUBCOMMITTEE ON HUMAN RESOURCES

OF THE

COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS
FIRST SESSION

DECEMBER 6, 1995

Serial 104-37

Printed for the use of the Committee on Ways and Means

a

U.S, GOVERNMENT PRINTING OFFICE
23-528 CC WASHINGTON : 1996

For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-052696-5


84

But the idea of a clear cut standard against which one can meas-
ure progress year after year, that is very important to the public.
If you could show every year that you were increasing your partici-
pation rate, measured in an accountable manner, and that those
people were putting in serious hours—I would recommend half-
time—and effort is defined in a way that people understand really
involves work—some of which is already in the bill. And even if the
initial levels appear low, if you can show progress year after year,
that more people are participating, that caseloads are falling, work
levels are rising among the remaining recipients, and so forth, that
will do wonders for the public perception of what government can
achieve.

The worst thing about the welfare problem has been to feed a
perception that government is not competent, that these problems
are beyond us. But they are not beyond us. The problem is over-
whelmingly administrative. It has to do with organizing welfare in
such a way as to attain these goals.

Money is involved, but money is not fundamental. I would en-
courage Congress to stop thinking of this program in terms of in-
vestment, in terms of resources, in terms of budgets. This really is
not the—that the problem will manifest at the local level. Over-
whelmingly what States have to do is reprogram the money they
already have away from expensive investments in education, train-
ing, government jobs, and move it toward case management. Be
sure people can be supervised in order to be sure that they really
participate, that they really look for work, that they really go to
WOrk,.

The significant pot of money you still have to have is for child
care, but child care is much less of a problem at the local level than
it is made out to be in Congress. You have got a child care market
out there. You have to pay for care, but the market will respond.
It is not as if there is a crisis, that there is a problem of supply,
that care is unavailable in some fundamental sense. That is wrong.

It is important not to let that issue drive the debate. The focus
ought to be on the administrative problems and especially on case
management and obtaining participation, following up, pursuing
clients so they do not drop out, making sure that people are sanc-
tioned if necessary—although you should try to avoid that and you
can avoid it if you have ffectyve followup—getting people into job
search quickly, having that up front.

All of this will not only improve the lives of people on welfare,
but drive the rolls down substantially and allow you to finance the
whole thing with the savings. So it is not the case that this takes
a large amount of new money up front. It takes some up front
money, but not very much if you do it right, with the focus on the
administration.

Chairman SHAW. Ms. Schulz, I would like to bring you into this.
In your community service provisions, I would like to know, how
many hours do you require for community service and what type
of community service do you provide?

Ms. ScHutz. In order to meet the basics of receiving New Hope
benefits, it still is that 30-hour requirement in community service
jobs. Now they are free to be able to use 10 hours of a 40-hour


44

of the earned income tax credit. I think he suggested it was one
of the most far-reaching visionary things that any Congress and ex-
ecutive had done during his tenure in government. But have you
had a chance to look at the proposed changes in it?

Mr. GALLANT. Not specifically, sir, no.

Mr. NEAL. Fair enough. I think that the earned income tax credit
relates to the seasonal employment issue that you made reference
to in the sense that there has to be some incentive to get people
into the work force. Let me use as an example for this Subcommit-
tee which seems to me used time and again, the Massachusetts
model, in terms of discussions between Republicans and Demo-
crats. This model could serve a national purpose here. But I think
that I cannot suggest to you here today that I have all of the an-
swers. I certainly would offer a critique of the Republican proposal
that has been offered. But also point out that along the way that
both sides in Massachusetts have been willing to give and the de-
bate therefore has moved back and forth, but generally near the
center some place on many of these issues.

I cannot emphasize enough today that I think part of the success
here is an improved economy back home. If you have an unemploy-
ment rate of 5.5 percent, it seems to me that a lot of people for a
host of reasons, with defense cutbacks and other items, have been
absorbed back into the work force. Rather than the acrimonious de-
bate that oftentimes centers on welfare, it seems that we ought to
be able to find some middle and common ground on these kinds of
issues.

And I thank Mr. Gallant.

Mr. GALLANT. Thank you.

Mr. NEAL. I noticed you looking at your airplane ticket before I
started the questions.

Mr. GALLANT. I thought I was going to be out of here a little ear-
lier than this, but that is all right.

Mr. NEAL. When it came to my turn of questioning, I hope you
did not look at your airplane ticket and say I hope I can be out of
here before this guy starts.

Mr. GALLANT. Qo.

Chairman SHaw. The time of the gentleman has expired. I will
say to any of the panel, if you do have a problem with connections,
you may be excused without any problem.

R Do any of the Members have any questions for Mr. Schilling? Mr.
angel.

Mr. RANGEL. I do, Mr. Chairman. To get a better understanding
of how repugnant the Federal mandates are, could we find some
way to reduce the Federal taxes for citizens in your State and just
let you do what you want to do? Would anyone object to that? Just
do your own thing with no Federal standards at all and States just
decide what they want, especially Ms. Page, because I think this
is more consistent with your Governor’s view. We just get out of it.
Do you like that?

Ms. Comal-PAGE. That would be fine.

Mr. RANGEL. Does anybody else agree?

Ms. Nazario. We would not agree with that. We think the Fed-
eral Government has a continuing role to play in helping people
who need assistance and particularly need assistance getting on


8

three, Delaware is $338 per month. In Wisconsin, that same family
would receive $517.

For our State, once families are required to accept jobs or engage
in job training activities, child care becomes a critical support serv-
ice as well as a major budget consideration. Although I know it is
not of primary importance to this Committee, Medicaid as a transi-
tional service plays an equally important role in the support serv-
ices provided to families in transition.

Our Governor Carper has a commitment to use long-term sav-
ings from welfare reform to assist poor families with both of these
necessary work supports. But the cost of child care is bound to in-
crease as the demand for that service also increases with putting
welfare clients to work.

Our State has made a commitment of State-only dollars in the
past years and we, I think, are the only State to my knowledge
that can say that we do not at the moment have a waiting list for
child care for the working poor in our State. We cannot continue
that commitment, and many of the clients that enter employment
will have to come back to welfare if we are not able to provide that
service.

In a survey that we conducted of recidivism in our State, 35 per-
cent of our clients that come back come back because of lack of sup-
port for child care, health care, once they enter employment. If we
shift more of the cost of these services to families, it will become
very difficult for them to maintain employment.

Under our welfare reform program, over the next 3 years we had
intended to serve every welfare family who needs these work tran-
sition supports. Services include not just child care and health care,
but employment and training services for about 75 percent of our
client population who is able to work. The cap of Federal funds
would make it possible for only 5 percent of our clients to receive
such services, which are also clear components of moving welfare
families from welfare to work.

So I urge you, Mr. Chairman, and Members of this Committee,
to reevaluate the relationship of your goals to the proposed funding
levels in the conference agreement. éhild care resources must be
increased if we are to successfully refocus our public assistance pro-
gram, and employment and training services must be more ade-
quately funded in order to move a larger portion of the population
to work and to meet the strident participation rates that you have
outlined for us.

I want to thank you for the opportunity to testify and will gladly
provide any additional information that might be useful to you.

[The prepared statement follows:]


7

limit for every welfare recipient age 19 or older in our State. If the
recipient has no secure private sector employment by the end of
that time limit, the State will enable that person to take a
workfare job and earn their welfare check for a maximum of 2
more years.

By 1999 the Delaware plan would totally overhaul the system. At
that time new welfare applicants who cannot find jobs will be per-
mitted to work in workfare jobs for a maximum of 2 years to earn
their welfare paycheck. No able-bodied person in Delaware will re-
ceive a welfare check if he or she refuses to work.

Mothers must cooperate with paternity establishment as a condi-
tion of eligibility, and young fathers will be provided with job train-
ing, job search, and parenting programs, and child support orders
against them will be strengthened.

A Better Chance also provides incentives for people to get mar-
ried, to pool their incomes, and share child-rearing responsibilities.
In the short term we will eliminate Federal welfare rules which pe-
nalize intact families. On the long term, the current welfare system
will be scrapped in favor of a system that supports working two-
parent families through forward funding of the EITC and help with
child care and health care.

By 1999 Delaware intends to end welfare payments to teen moth-
ers. We will continue to provide child care, health care, and other
services to keep teen mothers in school and help them finish their
education.

As you can see, Delaware’s goals in reforming the welfare system
are very similar to yours, Mr. Chairman, and the same as my fel-
low commissioners, and the same as our President. We all want to
see welfare clients working. And I have no doubt that the former
recipients who are here today, as is one from Delaware, will sup-
port these goals wholeheartedly, and we know the public does.

But as we struggle to reform public assistance to accommodate
these goals, we are very concerned that adequate funding is not
provided for child care. NGA as well as our State and all States
around the country have listed child care as a priority. Let me reit-
erate that message today. We do not believe that we can succeed
in our efforts to provide Delawareans a better chance at self-
sufficiency without adequate funding for up front costs which are
critical supports in transitional services to clients toward self-
sufficiency.

The proposed work requirements will be unattainable in Dela-
ware given the proposed funding levels. Delaware estimates that
the proposed funding levels for 1996 to the year 2000 will be $70
million less than the State’s anticipated need in order to meet the
strident work requirements. Child care needs alone would be $30
million underfunded. This is a 45-percent reduction of the funds
that our State had anticipated based on the partnership that we
thought we had established in our waiver for welfare reform.

Like many States, Delaware’s welfare payments are low com-
pared to the cost of child care, so we cannot completely rely on the
savings that are accrued from lower caseloads. Delaware welfare
payment level ranks 35th among the State welfare payments. They
are 32 percent of the Federal poverty level. Compared to, for exam-
ple, payments in Wayne County, Michigan, of $459 for a family of


57

STATEMENT OF PIER GETER, WILMINGTON, DELAWARE

Ms. GETER. Good afternoon, Mr. Chairman, and Committee
Members. I would like to thank you for this opportunity to speak.
My name is Pier Geter and I am a resident of Wilmington, Dela-
ware. During the course of the last 2 years my life has changed
dramatically. I am a proud mother of three children. I have a
daughter who is 6 years old and 1-year-old twin sons.

I am a graduate of the First Step employment and training pro-

‘am. I was employed as a receptionist at the Western Neighbor-

ood House and within the last year I was promoted to administra-
tive assistant for the very same program that I graduated from.

My annual salary is $18,000 per year and transitional day care
has assisted with annual day care costs of $9,504. Over half of my
income would have been devoted solely for child care. It would have
been impossible for me to take care of four of us on my salary of
$18,000 a year. We would not be able to eat, have a roof over our
heads, or heating for my home. Thanks to transitional child care,
I no longer have to worry about how I will pay my child care bill,
and I can rest at ease knowing that a program such as this one
that has helped me can help others trying to get into the successful
working world that cannot afford child care.

Please support transitional child care. Thank you.

Chairman SHAW. Thank you.

Mr. Ford.

Mr. Forp. Thank you, Mr. Chairman. I would like to commend
all three of the witnesses for coming here to talk with this Sub-
committee. As one of my colleagues said earlier, I am not sure
what is the real purpose of these witnesses testifying today but I
do want to thank you.

Ms. Peterson, you mentioned that certainly working is a lot bet-
ter than being on welfare. But it took you 4 years to get off of wel-
fare, right?

Ms. PETERSON, To get off of cash assistance. There are still some
transitional services that I am receiving.

Mr. Forp. But, do you know under Mr. Shaw’s plan and Newt
Gingrich’s plan that you would have been cut off 2 years ago? Not
just off of cash benefits. You would not have been able to stay on
for 4 years under Mr. Gingrich’s welfare package that we have be-
fore the Congress today.

Ms. PETERSON. But I think what needs to be in place there is
flexibility and a judgment call as to whether or not that time can
be extended.

Mr. Forp. Under their plan, under the Gingrich plan and Mr.
Shaw’s plan you realize that you would not have been able to main-
tain those cash benefits.

Mr. Camp. Would the gentleman yield for just a moment?

Mr. Forp. I only have 5 minutes, Mr. Camp.

Mr. Camp. Our plan is 5 years, not 2 years. So if you are going
to speak about it, please speak accurately.

Chairman SHAW. You used my name, Mr. Ford——

Mr. Forp. Yes, I will yield to you, Mr. Chairman.

Chairman SHaw. I will tell you, just get it right, because she
would have another year. It includes on-the-job training, edu-
cational programs, and so forth. The only thing that they can do


40

Mr. SCHILLING. I can state that in Fond du Lac County, first off
I guess the one thing we need to know is that in Fond du Lac
County which is in Wisconsin and which is a relatively generous
welfare State, everybody receiving public assistance is below the
poverty line. That is the one thing you can be sure of, that 100 per-
cent of the people who are living on public assistance only are
below any poverty line that I have seen.

Mr. ENSIGN. So how could the welfare bill in Congress throw an-
other 1.5 million into poverty?

Mr. SCHILLING. The thing is I am not intimately familiar with
that bill. I am pretty familiar with what is going on in Fond du
Lac, what is working’ and the economic condition of the people who
have become unemployed there. The ones that have gone off due
to employment for certain have raised their economic level or they
could not have worked their way off of welfare.

Ms. Comal-PaGE. In Michigan, the people who have left welfare
have left because they got a job and they are significantly better
off with a job.

Mr. ENSIGN. Have you done interviews with the people down the
road at all, to find out about their quality of life, how they perceive
the reforms? Do they feel better about being off of welfare in jobs?

Ms. Comai-PacE. As a matter of fact, we have here today on the
next panel a recipient, a former recipient from Michigan, Nancy
Peterson.

Mr. ENSIGN. But instead of just one anecdote, have you done
studies with these people?

Ms. CoMal-PAGE. We have not done formal studies, but we do
have a client advisory committee we meet with regularly to get
input and advice about how we should proceed. And I would say
that that group of recipients and former recipients strongly support
our efforts in Michigan to move people into work.

Mr. ENSIGN. Just one last question that I have. Does the panel
here feel that what you are doing—is it more cruel to keep people
on welfare or to get them into jobs, as you are attempting to do?
Which is more compassionate?

Ms. Comal-PacE. If I could just say one thing about that. People
think it is demeaning for people to take a low-paying job. They
think it is demeaning for somebody to take a low-paying job. I
think it is more demeaning to get a check every month for having
done nothing. People start out at low rungs in the economic ladder
and we do not want people to stay at the low rungs. But people
need to start somewhere, and we think it is a prideful thing for
them and for their children to go to work.

Ms. Nazario. I think the welfare recipients would be the first to
say that. In Delaware, we have held many focus groups and town
meetings and our clients, the moment they get a job, they are out
of welfare because our grants are at 32 percent of poverty. So that
is why our cases have also been reduced because they are working
and the clients want to work. We have not had a single applicant—
the only complaints that we have had from applicants to welfare
under our welfare reform system is that they have had to fall in
the control group because on their waiver arrangement we have to
maintain a control group and those are the only people who have
complained. Our clients want to work. The clients that are working


81

majority of clients assigned to unpaid work, something that might
surprise some middle-class people.

They feel good about this. Their children feel good about the situ-
ation. The long-term prognosis is better for the family. I do not
claim it transforms the situation and turns them into middle-class
people, but the impact is highly positive.

Mr. McCrery. Thank you for that answer. It is very good. Mr.
Chairman, I have just one more question regarding work require-
ments.

Would you suggest that we simply put in the legislation the par-
ticipation rates and leave it up to the States to define work so as
to meet the participation rate requirements?

Ms. GUERON. I would. I mean, I think that under the block
grants States have strong incentives to try to run programs that
are cost effective. Suddenly the last buck is their buck. So I agree
with Larry, the key issue is participation.

I also think, which I did not mention when I discussed the 35
hours, that what you do not want to do is make the success of this
reform look less than it is. And by saying that you cannot count
people unless they are active 35 hours every week in the month,
you then end up with statistics that understate the accomplish-
ments of programs and you can end up saying they failed. In fact
the countrary is the case. These were very tough programs, and let
me tell you that if you got the country to do what Grand Rapids
and Riverside were doing, you would have an entirely different sys-
tem.

These were not coddling administrators. These were very tough
programs. And they did not meet these rates. So you have to say
what is our goal? Showing these folks up or accomplishments and
recognizing those tough measures?

So I favor sticking with 20 hours. I think insisting that it be met
every week in the month, for some technical reasons like people go
on and off, can also make programs look worse than they deserve
to do. I agree with Larry that the key is that there be activity by
a very fair share of the people on welfare. And believe me, the 50-
percent requirement is an enormous stretch, enormous.

You heard people from Michigan say it would be easy for them.
There are some very specific reasons it would be easy. But in low
grant States in this country, it is going to be extremely difficult,
much more difficult than in Michigan.

Mr. McCrery. Mr. Chairman, if we have a chance to revisit this
question of work requirements, I am of the opinion—and it has
been buttressed by the testimony I have heard today—that the
work requirement section of this bill got caught in a political death
spiral. Everybody was trying to outdo everybody else in being tough
on work requirements to the point that we got ridiculous with it.

I would support either lowering the requirements or letting the
States define work. If the Democrats want to complain or the Presi-
dent wants to complain about us not being tough on work, so be
it. But let us do the right thing and let the States handle their
business, to construct a program that is productive and that accom-
plishes our goals.


28

in your State of Michigan. According to HHS, for the fiscal year of
1996 and through the year 2000, Michigan needs between $461 to
$517 million more than the block grant would provide in order to
carry out the work program and the related child care component
to go with that work program. Can you respond to that, please?

Ms. Comal-PacE. Certainly. We have been looking at those anal-
yses as well, and it is quite difficult to figure out what the assump-
tions of those analyses are based on. So I cannot really address the
HHS numbers. But let me respond this way. When we have rough-
ly calculated what our participation rate is right now with those
who are working, those who are in our JOB training program, we
are already meeting the participation rate for the year 2002 which
is, as I understand it, about 50 percent for single parent families.
So we are well on our way to meeting those participation rates.

Mr. Forp. Mr. Chairman, I have a couple more questions, but I
do not want to take up all of the time. If you will let me come back
with a couple of questions at the end of it, I would appreciate it.

Chairman SHAW. Mr. English.

Mr. ENGLISH. Thank you, Mr. Chairman. I would like to thank
the witnesses for coming here and offering their very real expertise
to this evaluation. I want to proceed in my questions on a strictly
nonpartisan basis and avoid any kind of rhetoric or pointed ques-
tions. I am curious, given your experience at the grassroots level,
if you could assess a couple of provisions that were in the bill in
principle.

One of the Members here had brought up the changes in SSI
that were included in the welfare bill. One of the things we do is
cut off cash payments to drug addicts and alcoholics, we turn over
a block grant to the States, and part of the savings will go to the
States to provide programs for people in those situations. In your
view, how would you expect your State to handle that program? Do
you expect to be able to innovate with that funding, and do you
think it would help strengthen families? If I could start with you,
Ms. Page.

Ms. CoMALPAGE. Certainly, substance abuse treatment is always
in short supply, so we welcome additional resources in that area.
We do anticipate that a number of the individuals who will be cut
off of SSI, who would be eliminated from the program due to dru;
abuse and addiction, will probably end up in State-funded
programs quite frankly. We are continuing to study that right now
and look at that issue.

Mr. ENGLISH. Ms. Nazario.

Ms. NAzaRIO. Yes, we are looking at that issue as well. And in
terms of the SSI changes to children, we estimate that about 300
children in Delaware would be affected by the provisions of the
SSI. In terms of the adult population, there are some who believe
that the State would not have the ability to reject services to that
population; that the Federal Government is allowed to make cat-
egorical distinctions in the service definitions; that at the State
level, if an individual is determined to be unemployable, that the
State does not have the luxury to say that because drugs or alcohol
are a contributing part to that disability, that we could exclude
them. So we are exploring the validity of that.


45

the job market and succeeding in that job market and maintaining
themselves in the economy.

Mr. RANGEL. You will never get a job with this gang.

Mr. Forp. Will the gentleman yield?

Mr. RANGEL. Yes.

Mr. Forp. The question was whether you would reduce Federal
taxes. Ms. Page responded to the question and said yes. We would
like to let the Federal Government butt out of it and we take full
control. Would that mean-that you would raise all of the funds that
would be necessary and that you would not come to the Federal
Government for any of the welfare dollars?

Ms. Comal-PacE. That is correct.

Mr. RANGEL. Anyone else agree with that view?

Mr. GALLANT. I cannot say I fully agree with the fact that we
would want to see the Federal Government out of it totally in
terms of contributing to the cost. But I will say, Representative,
that as I said earlier, there is some feeling and there is some sense
that compassion only lies within the beltway of Washington, DC,
and I do not particularly think that that is necessarily true. I think
in Massachusetts we have always been a very compassionate State,
and we have always looked to and tried to come up with ways to
take care of our poor and underprivileged.

Mr. RANGEL. But if you have got a tax refund for every Federal
dollar that is designated for welfare, then you can match your com-
passion with your taxes. I would say for the gap—some people here
are talking about a $245 billion tax cut. That will allow the States
to do a heck of a lot more really.

Mr, GALLANT. Again, I am not saying that we would like to see
the Feds out of it completely as far as funding goes, but what I am
saying however is in the general area of would States be compas-
sionate whether they had used 100 percent of their own funds or
used partial Federal funds, I for one, am willing to say that Massa-
chusetts would, in fact, be compassionate and would, in fact, take
care of its needy.

Mr. RANGEL. I am just talking about a safety net, not compas-
sion, just a minimum standard set by the Federal Government for
every poor person. .

Thank you, Mr. Chairman. This panel has been very helpful on
my decision as to how to vote on the conference report if the Re-
publicans ever agree on school lunches or whatever is holding them
up. And I want to thank you for thinking about this. I cannot wait
to hear from the successful mothers that have gotten off of welfare.

Chairman SHaw. Mr. Ford.

Mr. Forp. Thank you. Mr. Schilling, in your opening statement,
you talked about the substantial reduction in the caseload of AFDC
recipients after your State’s demonstration project.

Mr. SCHILLING. Yes, sir.

Mr. Forp. Let me ask you this. Could any of this been due to
a strong economy in your State?

Mr. SCHILLING. Wisconsin has a very strong economy at the cur-
rent time. There is no question that the strong economy in Wiscon-
sin is contributing toward the reduction in welfare caseload. Case-
loads are declining all over the State of Wisconsin and have been
for the last couple of years. The caseload in my county and in


27

disagree with that. I think Massachusetts has always been a leader
in dealing with the poor and the less advantaged in the State.

Mr. For. I am committed to that. I believe that. But I am talk-
ing about unfunded and unworkable provisions within this particu-
lar vehicle.

Mr. GALLANT. I am sorry, sir, you will have to be more specific
on what is unfunded and what is unworkable.

Mr. Forb. We see that about 1.5 million children under the Re-
publican plan will immediately slip right into poverty.

Mr. GALLANT. Again, I may not see it the same way you do, sir.

Mr. Forp. I am asking you to out——

Mr. GALLANT. In my nowledge of what has been going through
Congress in both the House and the Senate and the material that
I have read, I do not see these provisions differing greatly from
what we have already enacted in Massachusetts as State law. But
in addition to the funding, we feel that with the block grants we
would better be able to use the funds that are available to us in
a way that is going to enhance the lives of the poor people in our

tate.

Mr. Forp. But you have not seen the details of this report?

Mr. GALLANT. No, I cannot say—I said that what I have read,
what I have been reading so far. I have not seen anything in detail.
No, I have not.

Mr. Forp. Have you looked at the provision in this Republican
plan on training and education and will it suffice in your State?

Mr. GALLANT. I think that, without having really looked at or
studied the provisions of the education and training portion of the
plan as presented here, I feel that we could adequately handle any
kind of provision of education and training in our State. We, in
fact, in Massachusetts have shifted an emphasis away from edu-
cation and training as being the primary or one of the primary
tools for moving people off of welfare. We still have an education
and training program. We still support the education and training
program to the tune of $32 million a year.

Mr. Forp. Are they funding education and training enough to
satisfy the needs in your State?

Mr. GALLANT. Yes, they are.

Mr. Forb. Under the Republican bill?

Mr, GALLANT. Yes. From what I understand and again, I am not
certain as to exactly what numbers you are talking about. What I
understand from what I have read and all of the materials that
have been going around, particularly summaries from the APWA,
I feel that there is available adequate funding for education and
training in our State.

Mr. Forp. Mr. Chairman, I know that the red light is on but I
did have another question or two, but I can come back I guess to
the other Members.

Chairman SHAW. You are the Ranking Member. Go ahead.

Mr. Forp. Thank you. Ms. Page, I just wanted to go over one or
two things with you and I will confine it to work in education and
training. In 1994, about 30,000 AFDC parents participated under
Michigan’s JOBS Program, and under the congressional bill be-
tween 42,000 and 51,000 work slots would be needed by the fiscal
year of 2000. At a minimum, that is about a 41-percent increase


64

Testimony of Judith M. Gueron
President, Manpower Demonstration Research Corporation
Before the
Committee on Ways and Means, Subcommittee on Human Resources
December 6, 1995

Good morning. 1 am Judith Gueron, President of the Manpower Demonstration
Research Corporation. I appreciate the opportunity to appear before this Committee today. The
focus on welfare reform success stories is a welcome contrast to much of this year’s debate,
which has centered more on the failures of the system, on which level of government should be
responsible for redesigning welfare programs, and on how much money the federal government
should be spending. ‘The debate has strayed from the more critical issue of how to create a
welfare system that succeeds in meeting the three goals that Americans, in numerous public
opinion polls, have stated they favor: putting recipients to work, protecting their children from
severe poverty, and controlling costs.

It is because these goals are often in conflict ~ with progress toward one or two often
pulling us further from the others — that reform has been both contentious and difficult. Yet,
when the dust settles in Washington, real-life welfare administrators and staff in states,
counties, and cities will still face the fundamental question of how to balance this triad of
conflicting public expectations.

In the past two decades, reformers have identified one approach as the most promising
way to do this: redefining the bargain between government and welfare recipients so that
government provides income support and a range of services to help recipients prepare for and
find jobs, while recipients must participate in these activities or have their checks reduced,
Sometimes recipients have been required to work for their checks ~ as opposed to looking for
jobs or participating in education or training — but this has not been the primary focus, in part
because funding has been limited.

Happily, I can report at this hearing that we now have reliable evidence that this
approach ~ mandatory welfare-to-work programs — when it is done right offers a way to
advance in meeting all three goals. Careful evaluations of large-scale programs implemented in
diverse and real-world conditions have shown that those that are tough and adequately funded
can be four-fold winners: they can get parents off welfare and into jobs, support children (and,
in some cases, make them belter off), save money for taxpayers in the Jong run, and make
welfare more consistent with public values.

Recent interim findings from a federally funded study of three such programs — in
Atlanta, Georgia; Grand Rapids, Michigan; and Riverside, California ~ found that they
reduced the number of people on welfare by 16 percent, decreased welfare spending by 22
percent, and increased participants’ earnings by 26 percent, Other data on the Riverside
rogram showed that, over time, it saved almost $3 for every $1 it cost to operate the program.
‘This means that, ultimately, it would actually have cost the government more ~ far more —
had it not run the program. On any measure, this is a successful government initiative.

Not only can these programs work, but we now know some of the key ingredients of
success and have strong reason to believe that other cities and states can match these
achievements. In order to do so, it is necessary both to provide work-focused employment
services and child care and, equally important, to fundamentally change the tone and message
of welfare. When you walk in the door of a high-performance, employment-focused program,
it is clear that you are there for one purpose — to get a job. Staff continually announce job
‘openings and convey an upbeat message about the value of work and people's potential to
succeed. You ~ and everyone else subject to the mandate — are required to search for a job
and, if you do not find one, to participate in short-term education, training, or community work
experience. You cannot just mark time; if you do not make progress in the education
activities, for example, staff will insist that you look for a job. Attendance is tightly
monitored, and recipients who miss activities without a good reason face swift penalties.

If welfare looked like this everywhere in the country, we probably would not be
reforming welfare again this year. Instead, the system would convey a radically different
message to welfare recipients, and the public would see some advancement toward each of its
goals.

But we are far from that point. Although the Atlanta, Grand Rapids, and Riverside
programs are not the only strong ones, most welfare offices around the country do not look like
the one I just described. In part this reflects a lack of know-how; in part, a conflict over goals


4

Chairman SHAw. If everybody will take their seats we will pro-
ceed with the hearing. There will be one opening statement on ei-
ther side with all Members invited to submit an opening statement
for the record should they desire.

The next 2 weeks will be among the most important in the past
half century for the Nation’s poor. We have brought reform of many
of the Nation’s welfare programs to the final lap. The purpose of
this hearing is to show that States have already demonstrated that
they know how to reform welfare by helping people find work.

At the outset, I want to urge our guests to pay careful attention
to the testimony on welfare caseloads in Michigan, Wisconsin, and
Massachusetts, and on similar testimony based on scientific evi-
dence from Dr. Gueron and Dr. Mead. Consider two examples,
Fond du Lac County, Wisconsin has reduced its single-parent case-
load from 689 in January 1994 to 350 in October 1995. That is a
50-percent reduction in less than 2 years. The entire State of Mas-
sachusetts has reduced its 2-parent caseload from over 6,000 in Oc-
tober 1993 to 2,600 in October 1995. That is almost a 60-percent
reduction in just 2 years.

Here is a wonderful conclusion that we can draw from these facts
and from other testimony presented today. The relentless rise in
welfare among our citizens is not some inevitable condition of na-
ture. On the contrary, States have learned how to help people get
off of welfare. And there is no evidence in any of these studies that.
former recipients who earn their own way are worse off.

I am also very pleased to call your attention to three mothers
who have graciously agreed to testify today. All were once welfare
recipients and all have set their sights on removing themselves and
their children from the welfare rolls. I want to personally commend
them for setting such a fine example, not just for others in their
own communities but for the entire Nation. These mothers em-
bodied the very goals of welfare reform—producing strong and
independent citizens who rely primarily on their own efforts.

As we approach the moment of truth on welfare reform, we urge
Members of this Committee to look carefully at the agreement
fashioned by the House-Senate welfare conference. To help in this
assessment, we have given members a document that compares the
conference agreement with nearly 90 welfare reform recommenda-
tions made by the Clinton administration as expressed in a letter
to the conferees from Secretary Shalala. Of the 14 major issues, the
conference agreement is either in complete or substantial accord
with the administration’s position. More broadly, across all admin-
istration recommendations, the conference bill is either in complete
or substantial agreement with the administration on 85 percent of
these issues.

Perhaps of greater importance, Members also have a table that
compares the conference bill with the Deal substitute bill that
every House Democrat supported on the House floor. On 13 reform
issues, the conference report is in complete agreement with 6
items, and substantial agreement with the other 7.

Here is a simple proposition for Democrats on this Subcommit-
tee. The legislative process has once again worked its magic. At
every step we have responded to the minority’s concern and those
of the administration and moved the bill in their direction. This bill


18

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82

Mr. LEVIN. Mr. Chairman, could I just add a word, because I
think what the Chairman said provides some real possibilities. I
think that issue did get caught up.

There is the additional question, and maybe you might want to
comment now or later on. There is no additional money here for
work. If there is community service, it is not clear who 1s going to
pay for it. I am basically not in favor of any emphasis on commu-
nity service, rather than private sector employment, anyway.

‘here needs to be some real effort in terms of training and re-
training. More than half of the AFDC recipients do not have a high
school degree, as I understand. If it is not half, it is close to it.

So I do think we need to take a hard look at it, and I think we
need some hard requirements that are achievable. I do not know
if you want to comment on the work provisions. That is one reason
we said it was weak on work. I think it is unrealistic to have a 50-
percent participation requirement and to eliminate what was in
Mr. Shaw’s bill of last year, or the year before.

Chairman SHaw. I think it was 20 hours.

Mr. LEVIN. But you had $8 or $9 billion for the States to assist
them in terms of work efforts, and that has been completely—Judy,
do you want to comment?

Ms, GUERON. The first version of the Personal Responsibility Act
had participation requirements and $10 billion over 5 years. This
Committee, quite sensibly, when it did not have the $10 billion, did
not have the participation requirements. Then it got caught up in
this, as you said, in a debate about who was tougher.

But you recognized on this Committee that this was a package,
and that got lost in the debate later.

Mr. McCrery. It got lost because of the political game playing
that went on and, Mr. Levin, you know that we did not have those
high requirements until we started getting attacked for being weak
on work. It was only then that we put in these, what I think are
less than——

Mr. LEVIN. There was not any money, though. Maybe Dr. Mead
wants to comment. Let me ask Dr. Gueron, will it take some addi-
tional money in terms of these work requirements?

Ms. GUERON. I share Larry’s concern that it is not only money
in the block grant, but dedicated money. I am concerned that by
patting the cash grant and the work program money into the same

lock grant, that there will be a lot of pressure not to use it for
the work program. You know, a recession comes along and when
caseloads go up people have to choose between paying grants or
running work programs. There are also cuts in other places in this
bill, for SSI, for food stamps. The maintenance of effort is at only
75 percent, and there is a 30-percent flexibility to use money for
other programs.

There will be a lot of pressure by lobbyists that are much more
effective—you know, nursing homes and other folks—to divert
money into other areas and work programs may shrink rather than

grow.

And as Larry said, a 5-percent penalty when CBO estimates that
you are going to have spend $4 billion in the year 2000 to meet
these requirements, you take the penalty. And they estimate that
many States will. That would be an unfortunate outcome.


55

STATEMENT OF NANCY PETERSON, FREMONT, MICHIGAN

Ms. PETERSON. First of all, I wanted to say that it is indeed pref-
erable to work and spend the money that I earn than to be given
money by somebody to spend for my needs; definitely preferable to
work,

There were a few things brought up, like time limits for benefits.
I pursued a nursing career and went to school. It took 4 years alto-
gether to get myself to a place where I graduated and I have re-
ceived a licensed practical nursing degree, at which time I exited
and entered the job market at $9.92 an hour: a salary that can in-
deed support me and my three children, which is more than ade-
quate. But it would not work—I was only allowed 2 years in a pro-
gram of assistance.

IT liked what you said, Mr. Shaw, about the spirit, the human
spirit. I brought a great deal of that with me when I signed up to
get assistance. I brought drive. I brought determination. I brought
a support system with me. I had family. Not everyone has those
things.

There is a tremendous need for face-to-face contact with people
who can mentor you, individuals who do not have the drive, do not
know how to go about helping themselves. I think they talked
about 20 percent of the time spent in face-to-face contact. It is
Wholly inadequate. There are many people that need more than
that.

I had listed some barriers that I had to overcome. One of them,
the biggest actually was transportation. As a full-time student I dit
not work during the time that I was in school. It meant 12 credit
hours per semester, winter, spring, summer, and fall, for 4 years.
I have three children and often I asked myself, when am I
parenting? That was something that was seriously lacking was
time to parent. The nursing program is a grueling program and the
time spent at home was spent studying so that I could maintain
a 3.5 grade point average throughout this time.

I put up with cars that did not have heat for 60 miles a day, 30
miles each way to get to school, batteries that vibrated off into fans
so you had to stop on the side of the road and push them back
where they belonged, fumes in the car. Just a lot of things that
were not covered anywhere for somebody who was not working.
Going to school did not seem to count the way it probably should

ave.

I also dealt with a hearing impairment. I am seriously hearin
impaired. There were services, other Federal services that I coul
tap into that gave me help, like a wake-up device so that I could
be here on time today that I brought with me. It vibrates the bed;
it is really raucous. ‘And a hearing stethoscope to allow me to per-
form the duties I need to as a nurse.

Another barrier was, again child care, and yet in my situation,
I have older children. I came with the children. I did not have chil-
dren after I entered assistance. I had a 14-year-old, I had a 10-
year-old, and an 11-year-old and I was denied assistance for child
care because the 14-year-old supposedly could care for the younger
ones. Well, siblings make terrible sitters. Anybody with kids knows
that they make terrible sitters for their younger siblings. It is a
problem and I think it is one that I am having to deal with now


79

member, closed them during school vacations. It was only a money
saving device. It was not a political philosophy.

So I think that one has to recognize that there are not the re-
sources to provide child care, and I know you might not have to
count women with children under one, but think of the costs of
paying for that. Who wants to pay for it? So I think marching up
to 35 hours, you know, it got there in a sort of macho rhetoric
about being tough, but I think it is a real mistake to require States
to do that.

When I look at the other reasons why these three States would
not have passed the proposed standards, some of it has to do with
the activities that are counted. I am not a great fan of basic edu-
cation as it has typically been delivered in the JOBS Program. I
agree with Larry that we should look at the results and be very
sobered about what has been accomplished.

But these three programs have managed to combine their work
focus and tapping into some of those activities and they could count
them. I do not see why you would not let them count a certain
amount of basic education and training followed by job search.

I also think you are mistaken to limit the number of weeks that
ou can count for job search. Job search is a proven commodity.
eople should be c: cling back through it. It should be part of work

activity. So I would not limit it to 4 weeks.

I think there are a number of steps that one can take to make
these rates more reasonable, and I think there is a lot of expla-
nation short of failure by administrators for the reason that it is
very hard to meet these rates.

Mr, McCrery. Dr. Mead, do you have anything you would like
to add?

Mr. MEAD. Yes, I was mystified that vocational education is in-
cluded as a preferred activity but finishing high school is not. I
would have done the reverse. I would have said that for people who
are under 20, staying in high school would still be the preferred ac-
tivity, or it gould be counted toward the 20 hours, but not voca-
tional education.

Judy has said, job search is highly constructive. I would have
mandated it up front. I would have had that it be not just a favored
activity, but something that everybody has to go through at the
outset, unless you are disabled, in which case you are in SSI. But
short of disability, people on this program should be in job search
up front.

Now they should not be in it forever. I mean, if it does not work,
then you have to talk about something else. That something should
still involve work rather than something else.

The thing I want to emphasize is that the hours are less critical
than enforcing a real requirement on the bulk of the caseload. If
you have a 35-hour requirement, you will be able to get some peo-
ple to satisfy it, and you will generate some appealing success sto-
ries about people whose lives were changed. But you will not
change welfare.

What changes welfare is to have a lower requirement that can
be enforced consistent with the other demands on a mother’s life
which can become normal at least for the majority of the caseload.
That has never been done, and that is an administrative problem.


85

work week, they can use 10 hours toward education or skills kinds
of improvement, which would include pursuing a GED.

The kinds of community service jobs are, in fact, standard in the
sense they are mostly through nonprofit organizations, including
such things as food service, receptionist, office support, things of
that sort. We have more recently been concentrating on developing
alternatives in order to hopefully be able to make that bridge for
people to get into real work. So that has meant that we have actu-
ally developed a contract with the local Goodwill Industries for
manufacturing kinds of training to be able to move people into
higher paying jobs.

Chairman SHAW. Do you think that the 30 hours is a current fig-
ure or do you think 20 Pours would be the correct figure?

Ms. Scuutz. I think that 30 hours is workable and understand-
able, again for New Hope participants. I think it is important to
understand that as this is a part of a work-based model, it does not
mean that we are not supportive of the fact that there are people
that will need some other kinds of support.

So 20 hours is reasonable, I think, for people transitioning into
work, because 30 hours for some people who have not worked for
a long period of time, which does include New Hope participants,
making that transition to 30 hours is not easy.

There are also some market issues that exist as well. When I
talked about the flexibility of being able to use and partner commu-
nity service jobs with regular employment, there are situations
where someone’s hours are suddenly cut. So there are some market
reasons why 20 hours makes sense.

I think the whole idea of while New Hope’s utilization of child
care has been somewhat lower compared to the State of Wisconsin,
and specifically Milwaukee County’s utilization of child care, we do
know that the provision of 20 hours and being able to couple that
with child care will make it more expensive and does make a real-
istic provision for the expectation of someone to be the care giver
as well as working.

Chairman SHAW. What do the rest of you think about the possi-
bility of transitioning into the work program 20 hours the first
year, 25 hours the second year, 30 hours the third year, and then
perhaps—or maybe in the alternative, to make it 20 hours but give
the States bonus points for anything over that?

Mr. MeapD. I think it is worth discussing but only after you
achieve 50 percent participation at the 20-hour rate. Raising par-
ticipation by the caseload as a whole at 20 hours is vastly more im-
portant than raising it to 35 hours for some part of the caseload.

The other thing that is important to note about New Hope is that
this is a program that right now is operating in a sense on a vol-
untary basis. That is, to be in New Hope you have to do 30 hours.
There is no question there is a work expectation. But you do not
have to be in New Hope at all. You can remain on welfare or other
programs that are available under current law. We are talking
here about a reform that would take away the option of welfare
without a work requirement as it now exists.

Chairman SHAW. You are competing against the welfare system,
are you not, in a way?




62

Chairman SHaw. Thank you very much. I want to add my thanks
for these three success stories and for their getting out of the web
that we have created. Hopefully, we will be able to help a lot more
people by the welfare reform system, but you all three are to be
congratulated. Thank you very much.

For the next panel, these will be researchers. We have Judith
Gueron, who is president of the Manpower Demonstration Re-
search Corp. in New York City; Lawrence Mead, Ph.D., professor
of—by the way, Judith Gueron is also a Ph.D. Dr. Mead is a profes-
sor of politics at New York University, visiting fellow at the Wood-
row Wilson School of Public and International Affairs at Princeton
University in Princeton, New Jersey; and Sharon Schulz, who is
the executive director of the New Hope Project in Milwaukee, Wis-
consin.

Welcome. We have your written testimony which will be made a
part of the record, and we would encourage you to summarize it.

Dr. Gueron.

STATEMENT OF JUDITH M. GUERON, PH.D., PRESIDENT, MAN-
POWER DEMONSTRATION RESEARCH CORP., NEW YORK,
NEW YORK

Ms. GUERON. Good afternoon, Congressman. I appreciate the op-
portunity to appear here today.

Americans in numerous public opinion polls have stated that
they favor three conflicting goals for welfare reform. They want to
put people to work, they want to protect children from severe pov-
erty, and they are interested in controlling costs. In the past two
decades reformers have identified one approach as the most prom-
ising way to advance on all of these goals—redefining the bargain
between government and welfare recipients so that government
provides income support and work-directed services and recipients
must participate or face sanctions.

Happily I can report at this hearing that we now have reliable
evidence that this approach, mandatory welfare-to-work programs,
when done right offers a way to advance on meeting all of these
goals. Careful evaluations in diverse and real world conditions have
shown that programs that are tough and adequately funded can be
fourfold winners. They get parents off of welfare and into jobs, sup-
port children, save money for taxpayers in the long run, and make
welfare more consistent with public values.

Interim findings from a federally funded study of three such pro-
grams in Grand Rapids, Atlanta, and Riverside found that they re-
duced the number of people on welfare by 16 percent, decreased
welfare spending by 22 percent, and increased participants’ earn-
ings by 26 percent. Data on the Riverside program showed that
over time it saved more than $3 for every $1 it cost. This means
that ultimately it would have actually cost the government more,
far more, had it not run the program. On any measurement, this
is a successful initiative.

Not only can these programs work, but we now know some of the
causes for success and have strong reason to believe that other
cities and States can match these accomplishments. In order to do
so, it is necessary both to provide work-focused employment serv-


35

RXAMPLES OF WORK FOR BENEFITS REQUIREMENT
= One Adult and Oj

EDC $440

Food Stamps $289

‘TOTAL $629

$629/$4.25 - 148 Hours/Month
148 hours/month/4,3 weeks/month = 34

WORK REQUIREMENT: 34 HOURS/WEEK

CASE 2 - One Adult and Two Children

EDC $517
FS $258
‘TOTAL §775

$775/$4.25 - 182 hours/month
182 hours/month/4.3 weeks/month = 42

WORK REQUIREMENT: 40 HOURS/WEEK

CASE 3 - One Adult and Three Children
AFDC $617
FS $320
TOTAL $927

$927/$4.25 = 218 hours/month
218 hours/month/4.3 weeks/month = 50

WORK REQUIREMENT: 40 HOURS/WEEK

E4 = Two Adults and Two Children

EDC $617
FS $310
TOTAL 3927

$927/$4.25 = 218 hours/month
218 hours/month/4.3 weeks/month = 50

COMBINED WORK REQUIREMENT FOR BOTH ADULTS: 50 HOURS/WEER (e.g.,
One parent works 30 hours, one parent works 20 hours.)

WORK ACTIVITIES
Categories of work include (listed in priority order):

@ Unsubsidized Employment - a regular hire in an existing or
new job

© Partially Subsidized Employment - a hire into an existing or
new job with a partial government subsidy (for example,
on-the-job training or work supplementation). These jobs

typically become unsubsidized employment at the end of the
subsidized period

© Community Work Experience - placement in an unpaid position
with a non-profit or government agency doing work that would
otherwise have gone undone. These jobs could lead to
permanent, unsubsidized employment with the sponsoring
agency.

Independence gob - placement in a job created specifically
for WORK NOT WELFARE participants. These jobs are less
individualized than community work experience. The goal is
to minimize the need for these placements by aggressive
placement in other types of work activity

TIME LIMITED ASSISTANCE

All employable WORK NOT WELFARE participants are limited to no more

than 24 months of cash assistance.
Participants receive an INDEPENDENCE ACCOUNT entitling them
to 24 months of cash benefits (equivalent to AFDC and food
stamps) and 12 months each of transitional support services
(child care and Medical Assistance) which must be used over
a 48-month period.

© Participants are entitied to make regular "withdrawals" from
the account upon completion of training and work
requirements


“iy

-- a wage supplement: the combination of the federal and state Earned
Income Credits and direct additional supplements paid by New Hope. This
combination is calculated to raise a person's gross income above the federal
poverty line (up to a family size of six).

-- health insurance: equivalent in benefits to Medicaid, for families and
individuals not covered by Medicaid or employer insurance. The Project has
a consortium of four HMOs from which participants can choose.
Participants pay on a sliding fee scale.

-- child care: in a certified or licensed in-home or group facility. New Hope
has a sliding fee scale.

New Hope has been enrolling participants since August of 1994. Therefore,
some of them have been in the project for only a few weeks while others have
been in the project for over one year. Of the 661 eligible participants, 48% are
employed full time (120 hours or more per month), 5% are employed part-time, and
5% are employed in a community service job. Of those who have had a
community service job placement, 30% have moved into regular employment.

29% of the New Hope participants are childless. The value of offering
support to childless couples and individuals is that non-custodial parents will make
child support payments. According to one adult teen, her concentration on work
and her opportunities led to goal-setting and personal development rather than
having a child. Since those without children require no child care, the cost of
support is relatively minimal.

The provision of a community service job for those unemployed after an
eight week job search is an integral part of the transition to regular work. It
reinforces, "If you work, you will be above poverty." If regular work hours are
suddenly reduced, community service jobs are available to enable participants to
continue work and to meet the required 30 hours of work to receive New Hope
benefits. Flexible programming enables participants to meet their needs. Many
participants (38% of those eligible for a community service job opted to accept
one) choose to continue to look for work on their own.

There are three primary objectives for the New Hope demonstration:

1. Document the responsiveness of people to the offer and the impact of their
participation on income and non-economic effects.

2. Document what is learned about how to most effectively implement the
offer, with an aye toward replicating the project on a larger scale.

3. Document the costs and benefits of the program.

Policy Relevance: New Hope has multiple policy objectives: to reduce poverty,
make work pay, increase employment, respect and support individual
circumstances and efforts, and create a more cost-effective system of income
support than now exists. If the New Hope offer is shown to be successful, it will
also affect the opportunity structure in poor communities, and the attitudes and
expectations of children in participating families. New Hope is uniquely designed to
address the problems of the welfare system and the working poor.

There are four ways in which the New Hope Project is unique among current
welfare reform efforts:

1. Work-based offer: the New Hope offer is only available to participants
working 30 hours or more per week. Due to decreases in regular full-
time work, 30 hours is a more realistic expectation.


36

EPENDENCE ACCOUNT
(Benefits must be used within a 48-month period)
Transitional Benefits
24 Months* 12 Months Each of:
Child Care
Medical Assistance
‘up to 12 months may be earned through participation in employment and
training activities as specified in each participant’s employability
plan, but the balance of the 24 months must be earned through working
After 24 months, case benefits end, unless the recipient is
determined unemployable
© People determined to be unemployable are either referred to
SSI or, in limited cases, allowed to receive continued cash
assistance. WORK NOT WELFARE agency officials will
determine whether continued assistance is warranted in
hardship cases.
© WORK NOT WELFARE participants are not eligible for cash
benefits in Wisconsin for three years from the date they
were eligible for their last WORK NOT WELFARE cash benefit.


51

The poverty rate for children under 18 in Michigan is 21.2 percent. This is a
Michigan Department of Social Services estimate based on the 1994 U.S. Census
and the State of Michigan data.

‘The proposed changes in supplemental security income for children allow for chil-
dren to continue to receive 75 percent of the benefits that they now receive. This
benefit level will allow parents to continue to meet basic needs of their children.

Mr. LEVIN. Quickly, you say about 80 percent is spent on rules
and regulations imposed by the Federal welfare bureaucracy. I very
much join with Mr. Shaw in wanting to cut out paperwork, any un-
necessary paperwork. Are any of those rules and regulations State
rules and regulations?

Ms. Comal-PacE. Certainly, we can sometimes be our own worst
enemies, but——

Mr. LEvIN. Just tell me yes or no.

Ms. Comal-PacE. No, I do not believe—I think that the vast ma-
jority of what we are dealing with are Federal rules and regula-
tions.

Mr. LEVIN. There are no State rules and regulations involved in
DSS workers’ work?

Ms. CoMalI-PaGE. We interpret the Federal regulations to make
State policy with regard to AFDC and food stamps. There is some
leeway in AFDC for waivers and so forth to simplify policy, but the
vast majority of what we are dealing with are Federal regulations.

Mr. LEVIN. What percentage of the people who have been on
AFDC are part-time employees and still continuing to receive some
AFDC moneys?

Ms. Comal-PacE. I cannot give you an exact figure but we have
an earned income disregard, a waiver where we disregard the first
$200 plus 20 percent of earnings——

Mr. LEVIN. So is it a substantial portion of those?

Ms. Comal-PaGE. Right now 30 percent of our caseload is work-
ing and they make an average of around $473 a month. Those peo-
ple are continuing to receive cash assistance.

Mr. LevIN. Mr. Chairman, I have tried to figure out the child
care provisions in the conference bill that is under consideration.
I hope we can work with you on this. I just want to read what we
can figure—it will be very brief—because I hope at some point we
will be able to work on it. If this is wrong, I would like to be cor-
rected. I think it very much reflects your testimony, the Delaware
testimony.

For the first 5 years the conference report—it is not yet a re-

ort—would provide States with fully $1.2 billion less in child care
fonding than they would have been provided by the Senate welfare
bill. The conferees essentially responded to an administration re-
quest—and I want to point out, I do not think child care is the only
issue here. In my opening statement I mentioned a number of oth-
ers, including other aspects of this vital work-to-welfare linkage
that has to happen.

The conferees responded to an administration request to make
the $3 billion child care funding stream included in the Senate wel-
fare bill a permanent funding stream by taking the same $3 bil-
lion—by making it permanent. Instead what was done was to take
the $3 billion and stretch it over 7 years instead of 5 years. I think
that is what happened. This results in less child care funding in
the first 5 years.


24

Ms. Nazario. Certainly, Mr. McCrery. Let me first say that our
caseloads are also at the lowest point since 1992. I think the dif-
ference is the savings that we realize and there are at least 15
States with lower levels of payments than Delaware, so we are not
alone in this area. The savings that can be realized from the reduc-
tion of caseloads are not sufficient to make up for the additional
expenses of child care employment and training to meet the partici-
pation rates required for transitional Medicaid. There are cuts from
all aspects of the areas that would have to be invested on in order
to help clients move into the area of employment. In Delaware, our
State was one of the handful of States that exhausted quickly the
JOBS allowances and put State-only dollars in order to put services
there for employment and training and job placement services.

So we, as I said in my testimony, only have enough for 5 percent
of our clients to engage in employment and training. We have to
put in a lot of State-only dollars in order to meet the participation
rate required. We have to put, as we are putting today, a lot of
State-only dollars for child care. In 1994, our general fund budget
in Delaware was $5.7 million for child care. In 1997, the State dol-
lars are $19.8 million for child care. So that tells you the incredible
expansion in our commitment to child care. We do expect our case-
loads to go down, as they are going down as all States improve
their economic situation.

I think Michigan has evaluated it in their welfare reform. They
say that at least half of the caseload reduction is not directly at-
tributable to the welfare reform efforts. So all States are reducin,
cases. We are benefiting from reducing caseloads partly because o'
our welfare reform, partly because of the strong economy. What
has happened, even though there is more need for child care, it is
not more money than current law, because current law does not
cap child care for AFDC. It is part of an open-ended entitlement.
So now the moneys are capped. .

Mr. McCrery. Under the bill we will provide about $1.2 billion
more than is projected to be spent by the Federal Government for
child care in the next 7-year period. So we are, in fact, putting
more money into child care. Also, do you like the flexibility that
you are going to be given with this new Federal welfare system?

Ms. NAZARIO. We certainly appreciate some of the flexibility, al-
though there are still a lot of strings that are attached to the block
grant. There is the maintenance of effort issues. There are partici-
pation rate issues. There are legitimacy issues which Delaware is
following, but we are doing it as an option to the State. And we
support any area in which flexibility can be given to States to exer-
cise the options that are relevant to various State conditions.

We are also concerned that the loan fund, the contingency fund—
I’m sorry, the contingency fund was reduced. So if States get back
in a cycle of lower economy, they are going to struggle. We all are
going to have to struggle with reduced money in that area.

Mr. McCrery. There is no question that the States are going to
have to maintain some effort to support their welfare system. I
would point out to you though that under the conference agree-
ment, the contingency fund was increased not decreased, so we
have taken care of part of your concern there at least. But with the
added flexibility that we are giving you and with the examples that


54

Mr. Levin. If we know the problem, I think we should solve it
now. We ought to listen to Delaware and other States.

Mr. Camp. Mr. Chairman, could we move on with the witnesses?
We all have a lot to do today and I know this discussion is going
to be ongoing.

Chairman SHaw. I am going to have to dismiss this panel.

Mr. Forp. Mr. Gallant has been waiting to leave.

Chairman SHAW. I told Mr. Gallant to leave, so if he misses his
plane now it is his fault.

Mr. Forp. Mr. Chairman, I wish you would yield just for about
2 seconds. You gave some closing remarks. I think the intent under
this welfare reform package is to protect children in this country.
We have seen from the Office of Management and Budget that
about 1.5 million children will be thrown below into the poverty
thresholds. This bill that the Republicans are fashioning today will
not protect children, poor children in this country.

I know some Republican Member of Congress said early on, it is
just fine for us to lose a whole generation of children. We, on this
side of the aisle, do not buy into that concept at all. According to
some of the witnesses today, the 1988 Family Support Act and
other Democratic policies have worked over the past 10 years. You
have strong JOBS Programs today that place people in the work
force and take them off the welfare rolls.

I think that when the President vetoes this particular bill that
we will be able to come back hopefully, Mr. Chairman, in the spirit
of bipartisanship to work together and fashion a bill that would be
good for the welfare population and will be good for the taxpayers.

Chairman SHAw. I will respond in 2 seconds. The study that you
refer to changes the definition of poverty, which you are not sup-
posed to do, and it also uses the JOBS Program as a model, which
you cannot do. So it does not have faith in American people to go
to work, and it only assumes that 40 percent of those people are
going to go back into the jobs market. I think that is incredibly low.
I think they wanted to accomplish a result in the study and then
designed the study to come out that way. I have yet to get a copy.

Mr. Forp. Let me give you a copy of it, Mr. Chairman.

Chairman SHAw. I am glad you did give me a copy. I will look
at it. I see it is a two-page document. I think that there is no ques-
tion that those people that say that you are going to end up with
the same percentage of people going to work, those people simply
have no faith in the poor of this country or in the human spirit.

I think it is somewhat of a disaster. I think it is somewhat of
a disgrace to come in with a report like this. I think the President
is getting ambushed by his own staff, and I think that is wrong.
I think this President genuinely wants welfare reform. And if he
does, I invite him to join with us in partnership.

With that, this panel is definitely excused. I want to thank each
and every one of you for giving us so much of your time.

I would like to introduce the next panel, Nancy Peterson from
Fremont, Michigan; Debora Haskins from Fond du Lac, Wisconsin;
and Pier Geter from Wilmington, Delaware.

Ms. Peterson, if you would proceed, please.


63

ices and child care, and equally important to fundamentally change
the tone and message of welfare so that it is more prowork.

It is my conviction that if welfare everywhere resembled these
programs, the system would convey a radically different message,
the public would see some advancement toward each of its goals,
and the debate this year would have been very different. But we
are far from that point. Most welfare offices still do not look like
the three I described, and while many factors—philosophy, inertia,
differing goals—explain this, a key reason is also lack of money.
Simply put, as this Committee knows, it requires a substantial up
front investment of funds to reap the downstream benefit of more
people working and reduced welfare costs.

Now how do we spread the successes? This year’s congressional
debate has resonated with almost unanimous prowork messages,
and the Personal Responsibility and Work Opportunity Act calls on
States to get unprecedented numbers of people participating in
work activities eventually for 35 hours a week. While this would
seem to promote the replication of the successful practices I have
described, there is a real risk that it will do the reverse and in-
stead threaten the very programs we are celebrating today.

The risk comes from three sources—first is money. In work pro-
grams, time is money. Congress can legislate higher participation
rates. As this Committee’s earlier actions recognized, States will
need more up front money to make them real. Yet the bill elimi-
nates the JOBS Program which funded the Grand Rapids, Atlanta,
and Riverside successes, and folds the money from JOBS into one
block grant with AFDC cash grant programs. It freezes funding for
the combined block grant at current levels despite the requirement
that States meet participation rates that escalate sharply in future
years. Under fiscal pressure and with short time horizons, States
may hesitate to make the up front investments.

My second concern comes from what we know about the feasibil-
ity of the rates in the bill. Despite their well-earned reputation for
being the most mandatory in their States, the Grand Rapids and
Riverside programs would have failed the rates ultimately called
for in the legislation.

My third reason is the risk that meeting the bill’s mandate will
undermine the very successes that people in Congress and the
States hope to promote. Past research provides a warning against
spreading program resources very thinly and pushing for higher
and higher participation rates and hours, particularly the push
from 20 to 35 hours of activity in every week, requires States or
someone to dramatically increase child care outlays. Yet, we have
no evidence that the longer hours will lead to any corresponding in-
crease in program accomplishments.

In conclusion, everyone claims to favor work and a new work-
based bargain. In the past, reformers have succumbed to the temp-
tation to promise more than they are willing to pay for. This is one
of the reasons why the reality of reform has always fallen short of
the rhetoric and why reform has usually generated much heat but
little light. We are now, in the successes that we are celebrating
today, starting to see some light. We should move toward it. Match-
ing resources to our words is one way to do it.

‘The prepared statement follows:]




43

moved to the center yet. Let me ask you in terms of the Massachu-
setts experiment. What is the unemployment rate in Massachusetts
right now?

ir. GALLANT. I do not have the exact number, but it is just
below the national average.

Mr. NEAL. The 5.5 percent?

Mr. GALLANT. I would say so, yes.

Mr. NEAL. Would you suggest that the improved economy back
in Massachusetts has had some impact or reduced the unemploy-
ment rate?

Mr. GALLANT. Yes, I would say it has improved the economy. I
think that is part of it, but it has also improved management of
the programs. In changing of the program rules and regulations
that has a lot to do with it also.

Mr. NEAL. I would acknowledge that. I think that is important.
I also think that the model is a Republican Governor working with
an overwhelmingly Democratic legislature and has made a series
of rational compromises along the way in order to get to the conclu-
sion. Would you agree with that?

Mr. GALLANT. I would agree that it was a compromise, .

Mr. NEAL. Mr. Gallant, you cited the example of those five people
that had been absorbed into jobs in the health care industry?

Mr. GALLANT. By a hospital, yes, sir.

Mr. NEAL. In Western Massachusetts, one out of eight jobs is de-
pendent upon the health care industry and the State, as you know,
is overwhelmingly dependent upon the health care industry as kind
of a mainstay of our economy. Have you had a chance to look at
the proposed Medicare cutbacks?

Mr. GALLANT. No, I have not. Medicare and Medicaid is not with-
in my jurisdiction. I have not looked at them, sir.

Mr. NEAL. Would you accept my suggestion perhaps that those
five people are about to get the ax if, in fact, those Medicare pro-
posals fe forward?

Mr. GALLANT. It is hard to say. They may get the ax from the
hospital, but I am sure that there are other kinds of employment
available for them in Massachusetts. In fact, I had heard recently
the Retailers Association in Massachusetts actually are advertising
or soliciting help for Christmastime. That the stores at least in the
Greater Boston area did not have enough employees to cover the
Christmas season, the Christmas rush, and they were actually
looking for them. So we feel pretty confident there are a lot of jobs
in Massachusetts. They may not continue to be in the health indus-
try, but they are there.

Mr. NEAL. Let us use that example then of seasonal employment
and tie that to the issue of the earned income tax credit. Have you
had a chance to look at the proposals that alter the earned income
tax credit here?

Mr. GALLANT. Generally speaking, as far as the income tax credit
is concerned, we think that that is something that is helpful. It is
something that we support. That generally speaking, it is an effec-
tive tool from our point of view to keep people off of welfare or to
give them an incentive to go off of welfare.

Mr. NEAL. Granted, and I think that there is general agreement
on this side. I am fond of quoting President Reagan on the issue


Al

are subsidized in child care and are also assisted with health care,
and that is what would be very different if we do not maintain the
same level of support that we have maintained for the people who
have reduced our caseloads up to now.

Mr. ENSIGN. Thank you, Mr. Chairman. I yield back.

Chairman SHaw. Mr. Camp.

Mr. Camp. I will yield to Mr. McCrery.

Mr. McCrery. I will thank the gentleman for yielding. Ms.
Nazario, Mr. Gallant and Ms. Page have both said that they object
to the maintenance of effort requirement in the bill. Do you object
also to the maintenance of effort requirement?

Ms. Nazario. In Delaware we will maintain our effort and indeed
continue to reinvest. I think the issue is whether States are man-
dated to do that and that is what we would object to. Depending
on the conditions of the State, a State might be able to transfer
moneys or realize their savings in other ways. In Delaware, we
have to put every penny and more into the welfare because our
shortfall is so big.

Mr. Camp. So why would you object to the maintenance of effort?

Ms. NAZARIO. We object to the requirement of States. The fact
that there are so many strings attached to the block grant. Mainte-
nance of effort being one of them, the family cap. We in Delaware
are implementing a lot of the very same provisions that you have
in your plan, but we are doing them because we believe they are
right for Delaware at this time. What we would object to is the fact.
that they are mandated. We or our State are more opposed to the
job requirements without additional funding, the child welfare ad-
ministrative cap, the onerous reporting procedures that require a
lot of automation. Changes and improvement in our State, also we
thought funding. Paternity establishment at 90 percent—we are
among the top States in the country in terms of child support. But
these requirements would really put some onerous impediments on

us.

Mr. McCrery. So you do not anticipate having any problem with
maintaining the effort at 75 percent of current levels?

Ms. Nazario. Not in Delaware.

Mr. McCrery. So it is not going to do you any damage, so you
should not object to the maintenance of effort requirement, right?

Ms. NazaRIo. We object to the maintenance of effort requirement
on the basis that it mandates it for all States, and we have always
been a proponent of State option and State flexibility.

Mr. McCrery. Thank you very much. I know, Mr. Gallant, I
misspoke. You said you did not have any problem with the mainte-
nance of effort?

Mr. GALLANT. No specific problem. I do want to make reference,
just to clear the record, that it all depends on the year that is used
in terms of what that maintenance of effort would be equated.

Mr. McCrery. Thank you.

Mr. Camp. Ms. Page, you mentioned in your testimony that since
1992 and the State initiatives with regard to welfare that have
begun, we have seen an increase in the number of people on wel-
fare who work, and a decrease in the AFDC caseload. We have
seen 75 percent of those who are receiving AFDC participating in
what we call the social contract in Michigan which is an agreement


66

Chairman SHAw. Thank you.
Dr. Mead.

STATEMENT OF LAWRENCE M. MEAD, PH.D., PROFESSOR OF
POLITICS, NEW YORK UNIVERSITY, VISITING FELLOW,
WOODROW WILSON SCHOOL OF PUBLIC AND INTER-
NATIONAL AFFAIRS, PRINCETON UNIVERSITY, PRINCETON,
NEW JERSEY

Mr. Meap. Thank you, Mr. Chairman. Earlier this year I testi-
fied in another hearing where I advocated a somewhat different ap-
proach to welfare reform. H.R. 4 unentitles and time limits welfare
while passing most responsibility to the States. I would have pre-
ferred keeping the legal entitlement, avoiding time limits but en-
forcing work on the adults much more stringently.

In other words, I would have ended the entitlement in a behav-
ioral way but not in a legal way. It seemed to me that this was
the best way to meet the two main imperatives of welfare reform,
which are to put the adults to work, but also to maintain support
for the needy. These things can be done. They are not contradictory
but it does require maintaining open-ended aid and tough up front.
job enforcement. That would have been my preference.

But it is clear that we are going to go toward legislation involv-
ing block grants and a somewhat different mix of reforms. So to-
night, or rather today. It is not yet tonight.

hairman SHAW. We are headed in that direction.

Mr. Map. This afternoon I am going to ask a different question.
Not what reform might be ideally but how H.R. 4 is likely to affect
the process of reform that is already going on at the State level.
And I am going to recommend some fine-tuning.

Now as Judy has just indicated, it is clear that, at their best,
welfare employment programs can have large effects on the case-
load. I think the effects on dependency on welfare rolls forecast in
the MDRC studies are probably somewhat understated because
they do not capture the deterrence effects that States like Wiscon-
sin are seeing from tough work policies up front.

The effects that MDRC finds are for people who are on the case-
load and they do not include the effects of people who never go on
the caseload because of the work policies. Bre indications in Wis-
consin are that these effects are quite large and the effect could
well be to allow work policy to drive the caseload down on a scale
that we have not seen up till now, nor would we expect based sim-
ply on the evaluations.

Now looking at H.R. 4’s main provisions I see a set of new work
standards that are tougher than those we have now and which are
in themselves attractive. My concern is that they are not fully cred-
ible given the overall structure of the bill. They require a 50-
percent participation rate in the year 2002. That is an improve-
ment. It seems to me we have to aim for 50 percent in order to
make work the norm on welfare.

Also, the 50 percent is calculated using all welfare adults rather
than making assumptions about which are employable. I think that
is realistic. That is more effective. There is also a shift in the pre-
ferred activities away from remediation of the kind that was fa-


nu

Delaware's child care payments are not high - about 75% of the market rate. Nevertheless the
cost of child care clearly exceeds the cost of welfare payments for most families. Delaware's
AFDC payment for a mother and two children (25% of Delaware's caseload) is about $4,000 per
year. The cost for child care for two children for a year ranges from $6,400 to $8, 1 00. For this
reason, as a part of Delaware's FY96 welfare reform budget, we increased state funding for child
care by 61 % over our FY95 spending level. Our FY97 State budget proposes a 52% increase in
child care funding over our FY96 appropriation, Naturally, we were counting on federal
matching funds to allow us to provide this critical support service as we move families from
welfare to work.

We do ask parents to contribute toward the cost of child care on a sliding fee scale up to 26% of
the cost of care. If we shift more of the cost to the families, it becomes very difficult for them to
maintain employment and more likely that they will fall back on welfare.

The cost of child care is likely to grow as welfare clients are shifted to work. Often, employment
will be in low paying service jobs that require evening, nighttime and weekend care which are
hard to find and more costly. Also over the next three years, the rapid transition of our program
from welfare to work will increase the demand for child care and drive up the cost

Because of capped federal (JOBS) funds over the past several years, only about 5% of
Delaware's welfare families could receive employment and training services. Under our welfare
reform program, over the next three years, we had intended to serve every welfare family who
needs these work transition supports. Services were to include work readiness, job search, job
development, placement and retention services needed to prepare clients for entry into the job
market. Such services are a critical components in our plan to move families from welfare to
work.

We estimate a minimum cost of about $1,400 per client for employment and training services.
Although we could afford to pay for academic and basic skills enhancement services for only
about 5% of our clients in the past, Delaware's welfare reform budget plans were to serve about
75% of our welfare caseload as we phase in our program over the next three years. This would
be a very significant cost increase which we expected to share equally with the federal
government

The proposed national welfare reform legislation would require Delaware to serve 50% of our
population by the year 2002. This would have to be accomplished with 100% of state funds. We
estimate that Delaware's funding for employment and training services would have to increase
from $1.7 million in FY 95 to $9.8 million in FY 2002 to meet the federal participation mandate.
This spending increase would far exceed the loss of federal funds for failing to achieve the
participation rate. It would also leave Delaware far short of its own welfare reform goal of
serving 75% of our clients.

urge you to reevaluate the relationship of your goals and the proposed funding . Child care
resources must be increased if we are to successfully refocus our public assistance programs

In closing I must note there is another issue pertinent to this committee and our goals for putting
families to work - - the EITC program.

Our tax system must reward work and provide incentives for low income workers to continue to
work, The proposed reductions in the EITC program will increase taxes for millions of low
income households. This works directly against our efforts to move people to work and to keep
people working,

J want to thank you for the opportunity to testify and will gladly provide any additional
information that might be useful


53

system that has trapped people, and it is a system that has failed
us. We must not be afraid of change.

I think one of the things that we have been missing on this is
we have got to have faith in the human spirit to go forward. We
have to realize that just because people are on welfare, does not
mean they are somewhat inferior and have to be paid just to exist,
and that we should have no faith in their ability to pull out of wel-
‘are.

Now I am not saying that anybody said that or anybody really
thinks that, but I think we need to get that into our thinking proc-
ess and move forward. I think we will form a partnership to work
and to be sure there are jobs in those areas of the country where
there are additional problems. I am sure that all of us on this Com-
mittee, the Ranking Members and all of the Members of this Sub-
committee on both sides of the aisle will be anxious to work to-
gether to see that this thing works. Whether you vote for this pro-
gram or not, in the final analysis all of us, because of our concern
for fellow human beings, want it to work.

Mr. LevIN. Mr. Chairman, could I just briefly respond in terms
of your comments on child care and otherwise? There is complete
agreement the system is broken. It needs to be changed. As I men-
tioned, I introduced a bill on this subject—early in terms of welfare
reform in the mideighties. We have to link welfare to work. I am
in favor of time limits.

The problem is, and I think at one point or another we are going
to get back to that, I hope this year on a bipartisan basis, is we
have a structure proposed with participation rates which we very
much favor. And I think there will be things that are surprises or
that we did not take into consideration. But what is not going to
be a surprise is that the participation rates are going to have an
impact on the need for child care. That is not a surprise. You your-
self have said this is likely inadequate. Let us put together a sys-
tem that is adequate.

The same is in terms of recession. Everybody knows that in the
next 5 to 7 years, if history is any guide, we will have an economic
downturn. Everybody knows that. Now $1 billion or $800 million
in a contingency fund, we used more than that in less than 1 year,
and this is a 7-year program. So I very much agree with the spirit
and I think what we need to do is to create a structure that is like-
ly to work, and resolve these now on a bipartisan basis.

Chairman SHAw. I would say to the gentleman that we have in-
creased the funding on child care. Maybe we have not done it
enough. I tend to think that we are going to have to come back and
revisit it. But that does not mean we have to dump all the money
in now. We have already increased it, so let us see how it
works—.

Mr. LEVIN. It is not dumping the money. This is child care.

Chairman SHaAw. By the way, let me say this. The bill provides
that some of these moneys in these other categories can be shifted
into child care. But they cannot be shifted out. So the States, at
their option, can put more in child care as the needs arise. So with
that flexibility it may very well be that we have adequately funded
it. We are just going to have to wait and see.


59

to work; you want to work, and you do not want to be trapped in
that vicious cycle of the welfare system.

I find that to be true all over the country. I do not find the wit-
nesses here to be isolated cases. I find that to be true with the gen-
eral population. There are people trapped in the welfare system for
many, many reasons that might be different from the three who
are testifying here today. But by and large, the people that receive
cash assistance do not want to receive a check rather than having
a job. Maybe Mr. Shaw and Mr. Gingrich have found otherwise.

Now, if you find a situation where a teen mother has experienced
multiple pregnancies, dropped out of school, and faced a dead end,
we find these people stay on welfare for a longer period of time.
But ordinarily, people who are forced out of the work force and
onto the welfare rolls for whatever the reasons might be, want to
come off welfare as soon as possible. They want to work. They want
a job. They do not want to draw welfare checks. Ms. Peterson, I
find that to be true in your case. But I find that to be true in the
vast majority of the cases of people that I have talked with who
are welfare recipients.

Chairman SHaw. Mr. Camp is recognized.

Mr. Camp. Thank you, Mr. Chairman. I want to thank all of you
for coming. I have found all of your testimony extraordinarily help-
ful. It is not often I get an opportunity to hear from people all over
the country. I know it was not easy to get here. I know it is not
easy to sit through these hearings, but it is very, very helpful for
us to hear, because this process is not over yet. We are still work-
ing on a product and over time we will be wanting to amend and
improve that product.

Ms. Peterson, I would like to direct my remarks to you because
I am from Michigan and so are you. I just wanted to ask you, are
there any particular things—and that can be related to the Depart-
ment of Social Services or not—that you found helpful as you made
this really tremendous change in your life and positive step for-
ward, that we ought to know about?

Ms. PETERSON. The most helpful individuals were those that took
a little extra time. I worked with Michigan Rehabilitative Services,
Joyce Ryan who helped me get my hearing assistance. I had to
have new hearing aids right at the beginning because mine were
very old; and my assistive devices. She had more time for me. I did
have to send her report cards each semester, and she would write
back, wow, you are doing a great job. Those little things meant far
more really for morale, for keeping me going than some of the
other financial things.

Yes, the financials were necessary and needed, but you are still
dealing with a multidimensional human being who needs to be en-
couraged in a really hellish time in their life. It is not a pleasant
thing to be on assistance, to need help given to you.

Mr. Camp. Under the plan as it is drafted the States would have
the flexibility to extend child care longer if they decided to design
the plan that way. I know that you mentioned with preteens and
teenagers that that might be something that would be worthwhile.
That would be something the States would have the ability to do.
Would that possibly be helpful?


13

Chairman SHAW. Thank you, Ms. Nazario.
Ms. Comai-Page.

STATEMENT OF STEPHANIE COMAI-PAGE, SOCIAL WELFARE
POLICY ADVISOR, MICHIGAN DEPARTMENT OF SOCIAL
SERVICES, LANSING, MICHIGAN

Ms. Comal-PaGE. Thank you, Mr. Chairman. Good morning. It is
a pleasure to be here today. I appreciate the opportunity to share
with you today some of Michigan’s welfare reform successes to date
and also discuss some of our plans for the future.

We began in Michigan implementing our landmark welfare re-
form initiative, To Strengthen Michigan Families, in October 1992.
Since then we have seen a marked increase in the number of public
assistance recipients in our State who work and a dramatic de-
crease in our AFDC, Aid to Families With Dependent Children,
caseload.

In October of this year, 30.6 percent of all AFDC cases in Michi-
gan were reporting earned income. Furthermore, almost 70,000
cases have been closed as a result of earnings since our initiative
began in 1992. Remarkably, our AFDC caseload has been decreas-
ing for 19 consecutive months and we are now at the lowest case-
load we have had since April 1972. So when our final data in Octo-
ber is in, we expect to find that our caseload has declined to about
186,000 cases. That is down from a high recently of about 240,000
cases.

We are also pleased with the success of our revolutionary social
contract. This mandatory agreement between clients and our agen-
cy expects clients to engage in productive activities, preferably
work, for at least 20 hours a week in exchange for public assistance
benefits. In September, an impressive 75 percent of our AFDC re-
cipients participated in the social contract.

Under Governor Engler’s leadership, Michigan has been effec-
tively changing welfare as we know it for more than 3 years. To
Strengthen Michigan Families has often exceeded our expectations,
so we are very pleased with the progress we have made so far. But
we have achieved our success despite the Federal bureaucracy and
barriers to effective and substantive State-level welfare reform that
have been erected over the last 60 years.

For example, a current worker in our Michigan Department of
Social Services, a current frontline worker only spends 20 percent.
of their time in face-to-face contact working with clients to get
them off welfare. The remainder of their time is spent dealing with
the burdensome rules, regulations, and subsequent paperwork that
are imposed by the current welfare system.

That is why we are very excited about the monumental changes
Congress is in the process of enacting. Block grants will free us
from most of the Federal mandates that have made our positive ef-
forts in Michigan such a great challenge, and block grants give us
the flexibility to further pursue innovative approaches to helping
our clients achieve self-sufficiency.

I want you to know that Michigan is ready to be the first State
in the Nation to implement the legislation currently moving
through Congress. As we speak right now, the Michigan legislature
is in the final stages of enacting a comprehensive block grant


CONTENTS

Advisory of November 29, 1995, announcing the hearing .....

WITNESSES

Delaware Department of Health and Social Services, Carmen Nazario ..

Fond du Lac (Wisconsin) County Department of Social Services, Edward
L. Schillin,

Geter, Pier, Wilmington, DE
Haskins, Debora, Fond du Lac, WI
Manpower Demonstration Research Corp., Judith M. Gueron
Massachusetts Department of Transitional Assistance, Joseph Gallant
lead, Lawrence M., Princeton University
Michiga n Department of Social Services, *Stephanis Comai-Page ..
New Hope Project, Sharon F. Schulz
Peterson, Nancy, Fremont, MI ..

SUBMISSION FOR THE RECORD
Cave, Pam, Chantilly, VA, statement and attachment ..

am



34

STATEMENT OF EDWARD L. SHILLING
FOND DU LAC COUNTY DEPARTMENT OF SOCIAL SERVICES

A WELFARE REPLACEMENT PLAN
WORK NOT WELFARE is a pilot project in two Wisconsin Counties,

Fond du Lac and Pierce. It is designed as a comprehensive effort to
transform welfare from a long-term entitlement to a short-term
transitional program

The project was approved November 1, 1993, by the Federal Government
and was implemented January 1, 1995. The project will end December
31, 2005.

The pilot tests whether requiring recipients to work for their
benefits in a time-limited program reduces spells on welfare and
fosters

self-sufficiency

Key Componente
Mandatory Work Requirement

© Participants must work for benefits
© Benefits paid to recipients are based on the number of hours
worked.
2.  Time-Limited Cash Benefits
Cash benefits are limited to 24 months in a 48-month period
© AFDC and food stamps are calculated and issued as one
combined cash benefit
3. Intensive Training and Employment Services

The State guarantees access to education and training as
defined in each participant's employability plan.

© An employment team guides each participant through training,
job readiness, and job search activities
4. Guaranteed Child care
ld Care is removed as an obstacle to employment.
® Funding and placonent assistance is, provided to participants
who need child care.
5. Business Partnership
© A Community Steering Committee coordinates public and
private sector job-creation and employment
6. Transitional Support Services

thild care and health care benefits continue for up to 12
months after the end of cash benefits
7. Children’s Services Network
© ~The network ensures that children receive support services
regardless of parent’s employment status.

WORK FOR BENEFITS
WORK NOT WELFARE participants are required to work in exchange for
cash benefits.

Participants meet with a case management team during the first month
of elibibility and agree to an employability plan. By the second
month. participants begin working on the activities identified in
their employability plan.

Work requirements include:
First 12 months-education and training as needed, combined with
work
-Participation requirements are based on each person's particular
employability plan.

® Months 13 through 24-al1 participants must be engaged in a work
activity.

-Required hours of work are based on the combined cash benefit of
the AFDC grant and the cashed out food stamps, divided by the
Federal Minimum wage.

© = The maximum required participation will be 40 hours a week per

adult


76

2. Access to a job: if the participant has not obtained a job within the
first eight weeks of job search, New Hope will offer him/her a
community service assignment, up to six months at a time at
minimum wage. These are jobs that are meant to fill the gap until the
participant is able to find regular sector employment, an important
option for some participants.

3. Eligibility: the Project uses income level and the willingness and desire
to work as the primary eligibility criteria. The participant's household
income must be at or below 150% of poverty to enter. Participation
is not limited to those currently or recently on AFDC. This can be a
support to non-custodial parents and adult teens ready to work.

4, Means-Tested: participants are eligible for the components of the
New Hope offer until their income reaches 200% of poverty level.
Their payments for health insurance and child care increase as their
income increases.

It should also be noted that the wage supplement component, while not
unique, does offer a greater level of supplement than is currently available through
the Earned Income Credit to enable families to get above poverty.

Some valuable aspects of welfare reform have been experienced by New
Hope. States will need adequate support to replicate effective work-based models.

Support will be needed for:

Demonstrations: the private corporate sector validates the importance of research
and development. Demonstrations aid in the development of appropriate and
effective public policy. New Hope has been able to provide some direct
information to the State of Wisconsin in the development of its Wisconsin Works
welfare alternative.

Child care and health care: they have been accepted as basic components of
reform. The availability of these supports permits individuals to start and stay
working.

Community service jobs: like child care and health care, they are an important part
of the work package. Not everyone needs them, but their limited utilization should
not negate their value as part of a package.

EITC: The New Hope Project's wage supplement builds on the state and federal
Earned Income Tax Credit. The EITC and a tax system to enable workers to
contribute to Social Security, Medicare, and pay some income tax does have direct
implications to moving low income people out of poverty.

The power of New Hope does not lie in being the answer. The power is in
the provision of a flexible, adaptive, work-based model as a key part of welfare
reform.


22

all AFDC caseload of about 20 percent. It has been going down for
the last 20 months or so.

I feel that as far as the funds to handle the child care now in
Massachusetts for people who are on AFDC, we have adequate
funding. However, that does not mean that I would not welcome
more funding for our families who are low income who are threat-
ened to come back on AFDC because of low-income circumstances.

Mr. LevIN. By the way, I am focusing on child care and other as-
pects because I think that the link of welfare to work is absolutely
critical in welfare reform. Would you agree with that?

Mr. GALLANT. Sure.

Mr. LevIN. The essence of the bill that Democrats fashioned in
the House is welfare can work some time limits built in to make
sure that it happens. Let me just ask you quickly. There was some
reference, I think, in the testimony from Delaware about the times
downturns. Have you looked at how much your caseload increased
in your most recent downturn period and whether the contingency
fund in the conference report is adequate? For example, I looked
at the figures from Michigan. In 1983, do you remember what our
unemployment rate was in 1983?

Ms. CoMAI-PAGE. Probably quite high.

Mr. LEvIN. Do you remember more or less?

Ms. CoMal-PaGE. No, I do not.

Mr. LEVIN. It was 17 percent, as I remember it. Have you ana-
lyzed whether, all three of you, there would be adequate funding
if a recession of that nature reoccurred?

Ms. Comal-PaGE. Two points in that area. The first is that in ad-
dition to the funds provided for in the bill, we in Michigan are look-
ing very carefully at establishing our own contingency fund of
carry-forward dollars that would be available so we could address
economic downturns.

Mr. LEVIN. It has not happened yet though, right?

Ms. CoMal-PaGE. Which has not happened?

Mr. LEVIN. There is no contingency fund established yet.

Ms. Comal-PacE. That is correct. Until the bill is passed by Con-
gress, we really need to know what the funds are going to be before
we can move forward on that. The second point is that we have
found in our welfare reform demonstration which is statewide that
in a careful third party evaluation that our policies make a dif-
ference, no matter what the economic conditions of the State, that
by encouraging work we can get caseloads down. We can get fami-
lies off of assistance. Right now in Michigan, we are in the very
happy circumstance of having not enough workers. But in a case
of a downturn I think our policies encouraging work, combined
with a State established contingency fund, can address the needs
of families in Michigan.

Mr. Levin. Mr. Chairman, my time is up.

Chairman SHaw. Thank you. Mr. McCrery is recognized.

Mr. McCrery. Thank you, Mr. Chairman. I yield to Mr. Camp.

Mr. Camp. I thank the gentleman from Louisiana for yielding
and, Ms. Page, I want to thank you for your testimony today. It is
very enlightening and really shows us what States will do if given
the freedom and the flexibility to design programs. I think the dis-
cussions about a State contingency fund are exactly what we would


COMMITTEE ON WAYS AND MEANS
BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Min« SAM M. GIBBONS, Florida

BILL THOMAS, California CHARLES B. RANGEL, New York
E. CLAY SHAW, JR., Florida FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut ANDY JACOBS, JR., Indiana

JIM BUNNING, Kentucky HAROLD E. FORD, Tennessee
AMO HOUGHTON, New York ROBERT T. MATSUI, California
WALLY HERGER, California BARBARA B. KENNELLY, Connecticut
JIM MCCRERY, Louisiana WILLIAM J. COYNE, Pennsylvania
MEL HANCOCK, Missouri SANDER M. LEVIN, Michigan
DAVE CAMP, Michigan BENJAMIN L. CARDIN, Maryland
JIM RAMSTAD, Minnesota JIM McDERMOTT, Washington
DICK ZIMMER, New Jersey GERALD D. KLECZKA, Wisconsin
JIM NUSSLE, lowa JOHN LEWIS, Georgia

SAM JOHNSON, Texas L.F. PAYNE, Virginia

JENNIFER DUNN, Washington RICHARD E. NEAL, Massachusetts

MAC COLLINS, Georgia
ROB PORTMAN, Ohio
GREG LAUGHLIN,? Texas
PHILIP S. ENGLISH, Pennsylvania
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
PHILLIP D. MOSELEY, Chief of Staff

JANICE Mays, Minority Chief Counsel

SUBCOMMITTEE ON HUMAN RESOURCES
E. CLAY SHAW, JR., Florida, Chairman

DAVE CAMP, Michigan HAROLD E. FORD, Tennessee

JIM McCRERY, Louisiana BARBARA B. KENNELLY, Connecticut
MAC COLLINS, Georgia SANDER M. LEVIN, Michigan
PHILIP S. ENGLISH, Pennsylvania CHARLES B. RANGEL, New York
JIM NUSSLE, lowa FORTNEY PETE STARK, California

JENNIFER DUNN, Washington
JOHN ENSIGN, Nevada

1Appointed July 10, 1995.

ay


91

THE OTHER SIDE OF WELFARE

‘There's another side of welfare,
You'll likely never sec.
I know that because I've been there.
It’s not the place to be.

Ab

T've also been in your place,
Quietly considering “thase* people with disdain,
ve heard the reports of freeloaders",

But I never considered their pain.

My husband left our family.
Twas expecting at the time.
Although my heast was breaking,
was filled with fear inside.

When children are depending on you,
‘You put your pride aside.

They need your love, your time, your world.
Now alone, you must provide.

The courts are long and slow to move.
Civil justice is not swift.

Therefore, you pray, you hope, you cry.
Your lives are simply adrift.

The agency offers some provision.
For that, you are relieved.

But the forms, the waits, the humiliation,
‘Your character may never be retrieved.

Being “on the dole” is not a sweepstakes,
Itis not a productive way to live,

“The sterco-types, the looks, the stares,
At times, you have no more to give.

But, when children are depending on you,
‘You put your pride aside.

They need your love, your time, your world.
‘And alone, you must provide.

In this debate let's put aside,
The old thoughts and ideas review.

Let’s look at the beginning and remember,
To create a child, it takes two,

When legislating to where we will go,
Let’s look at where we have been.
Please Congressmen, Senators, Mr. President -

DEMAND PARENTAL ACCOUNTABILITY, before - you use your pen.

Written by:
Pam Cave


46

Pierce County, the experimental county, is dropping at approxi-
mately twice the rate of the rest of the State. Unemployment in
Fond du Lac County right now is approximately 2.7 percent.

Mr. Forp. So it is a strong economy. What about a well-funded
JOBS Program in your State, did that attribute to your State’s suc-
cess?

Mr. SCHILLING. Our programs are definitely well funded. There
is no question. I believe that the position of the State was, you can-
not do welfare reform cheap as far as the State goes. The State did
guarantee, for example, child care, and I think we all know that
the demand for quality affordable child care is virtually a bottom-
less pit.

Mr. Forp. And you also had benefit cuts as well to—.

Mr. SCHILLING. No, we did not.

Mr. Forp. You did not have benefit cuts?

Mr. SCHILLING. No benefit cuts.

Mr. Forp. I thought you had benefit cuts to welfare recipients?

Mr. SCHILLING. at would have been years ago. There have
been no benefit cuts in recent years.

Mr. ForD. In the late eighties, there were benefit cuts, when we
started this program?

Mr. SCHILLING. There was a freeze, yes. Wisconsin has not had
an increase in benefits in years, but I believe that we are still in
the for. probably within the top 10 States regarding our benefit
levels.

Mr. Forp. But explain to me how were you all so successful in
removing a lot of these children from AFDC to the SSI rolls which
is another Federal program? How were you all so successful in
doing that? I cannot usually connect that way in my home area.
How were you all able to do that?

Mr. SCHILLING. Basically, we have had a very active JOBS Pro-
gram attempting to place people in employment as well as we
could.

Mr. Forp. I meant to supplemental security income.

Mr. SCHILLING. Clearly after evaluation, when we have deter-
mined that in our best judgment someone is totally and perma-
nently disabled, we first refer them to our own State DVR, division
of vocational rehabilitation, for assessment. If DVR concurs with
our opinion that someone surely is disabled, we do everything we
can to facilitate that application process and we will basically ac-
company our client through the whole system, including appeals, if
necessary.

Mr. Forp. So you took them off of AFDC and moved a lot of
them on the Social Security rolls which is the supplemental secu-
rity income?

Mr. SCHILLING. We have moved—I am trying to think of how
many since we started—but right now of the people who are ex-
empted from the program right now, approximately 141, I believe
something like maybe 20 of them or so or maybe 30 of them are
on SSI and that is the reason.

Mr. ForpD. Do you see a lot of that, Ms. Page? You talk about
your success stories in Michigan, but was not Michigan one of
those States that shifted a lot of these general assistance recipients
from general assistance to SSI in the State of Michigan?


30

Chairman SHaw. Mr. Rangel.

Mr. RANGEL. Thank you. Mr. Gallant, you indicate that there are
still some strings attached to these welfare bills that you do not
like. What impediments do you see?

Mr. GALLANT. I did not indicate that there were strings attached
that I did not like. I am basically saying that we favor the block
grant. We favor the block grant completely. What I did with Rep-
resentative Ford was say that we had difficulties in negotiating
waivers with the administration. But I have not addressed the
strength and maintenance of effort. It was not a concern of mine.

Mr. RANGEL. Then with what you do know about the bill, you
have no objections to mandates that are there?

Mr. GALLANT. From what I know about the bill, no, I do not have
any, strong objection.

r. RANGEL. Ms. Page.

Ms. Comal-PaGE. I believe Governor Engler has spoken before
this Subcommittee and was quite definite about his desire to have
as few strings as possible attached to the bill.

Mr. RANGEL. Do you have any independent thoughts?

Ms. CoMAI-PaGE. There are some problems I think with the bill
on maintenance of effort particularly. Having said that, I believe
that the bill is much better, much less onerous for States than cur-
rent law.

Mr. RANGEL. What is the onerous part that remains in your opin-
jon:

Ms. Comal-PAGE. The maintenance of effort provision is quite
troublesome for Michigan. The baseline is fiscal 1994 when our
caseloads were higher. So thus, we will have to spend at a level
that we do not have to spend at now because our caseloads are
lower because families have gone to work.

Mr. RANGEL. Do you believe that the child born in poverty but
not a legal citizen is entitled to welfare?

Ms. Comal-PacE. In Michigan, we will continue to provide assist-
ance to immigrant children.

Mr. RANGEL. I am talking about the Federal Government. Do you
think we should guarantee that a child born anywhere in these
United States who is poor and in need, that there would be services
rendered to that child?

Ms. Comal-PacE. I think that is an issue for the Congress to de-
cide. As I said, I can speak for Michigan and Michigan will con-
tinue—

Mr. RANGEL. The Congress can decide all of these questions with-
out witnesses. One of the reasons that we have called you is to get
your view.

Ms. Comal-PaGE. And as I said in Michigan, we have made the
decision to continue assistance for immigrant children.

Mr. RANGEL. What about disabled children, do you think the
Federal Government should mandate that if a child is born dis-
abled, the State should not be allowed to decide that States would
be mandated to provide that service?

Ms. Comal-PaGE. We have looked in Michigan, many of the chil-
dren who would be eliminated from the SSI Program would receive
assistance from the State in our cash assistance program.

Mr. RANGEL. And many will not?


39

Mr. RANGEL. Mr. Chairman, parliamentary inquiry.

Chairman Suaw. Yes, you will have a chance to inquire of Mr.
Schilling.

Mr. RANGEL. No, I just want to inquire from the Chair. I find
this testimony very interesting, but since the House has already
worked its will on the welfare bill and it is in conference, I am try-
ing to figure out what benefit the Members of this Subcommittee
will get from this testimony. I read your opening statement and I
know that you are encouraging President Clinton to sign the con-
ference report, but what can we learn from this testimony that
would help us legislatively?

Chairman SHaw. I am not sure that is a parliamentary inquiry,
but I will be glad to respond to the gentleman. It is twofold. One
is the continuing work that this Committee is going to do after pas-
sage of welfare, after the President does finally sign a bill. As you
know and you and I have privately discussed, we cannot walk away
from this problem. We will continue to see what is working and we
will continue to work on this problem. It will be a building situa-
tion.

And the second is that the matter has not come back before the
House and I think it might be to our benefit to hear how some of
these provisions are working in the various States and will con-
tinue on through the next couple of panels.

Mr. RANGEL. Basically, it would help us to determine whether we
have to vote for the override?

Chairman Suaw. Still after your vote, Charlie. Mr. Ford.

Mr. Forp. Will the Chairman yield on that to the floor?

Chairman Suaw. I will, yes.

Mr. Forp. Mr. Chairman, let me raise a question or make a com-
ment. Could it be that the Medicare bill has embarrassed the Re-
publicans in such a way that now you want to bring the welfare
package immediately. However, you know that you have a bad bill
on welfare as well. Is that the real answer to all of this?

Chairman SHAW. I am afraid the Ranking Member is abusing his
position to make a parliamentary inquiry.

Mr. For. Mr. Chairman, I had no intentions of embarrassing
you. I just join with my colleague, Mr. Rangel. I do not see why
we have these witnesses, taking their time from their busy sched-
ules to come over here to tell us more about consequences of a bill
that’s already in conference.

Chairman Suaw. Mr. Ensign.

Mr. ENSIGN. Thank you, Mr. Chairman. I just have a couple of
brief questions, and that is, first of all several of you have men-
tioned a decrease in your welfare rolls. What happened to these
people? Were they thrown out in the streets? Were they thrown
into poverty? I mean all of the terrible things that we have been
hearing over this past year and the HHS study that said 1.5 mil-
lion children that will be put into poverty since nobody really
knows where those assumptions come from and obviously your pro-
grams are not showing that this is what is going on, so I am just
trying to find out what is the truth here. Is HHS right or are
maybe their studies flawed? Your experience seems to say some-
thing differently.


89

The Other Side of Welfare

Now that the welfare reform bill has been safely tucked into
the bill for budget reconciliation, we will likely not hear

much more about it. That's too bad because there is a lot about
this issue that the public needs to know. Welfare is not speci-
fically for the "lazy" or "unmotivated". It is not a hand-out
available simply upon asking or approaching an office counter.
Entitlements, all types, equate to approximately 1 percent of
the federal budget. Food stamps and other nutrition programs

are often accessed by members of our armed forces and by other
workers who receive low levels of base pay, yet have families

to feed. You can own your home yet still qualify for food stamps.
The average recipient of an Aid to Families with Dependent Chil-
dren payment in our country today is a divorced, caucasian,
female with two young children. The only reason she qualifies
for assistance is that she receives no support for the children
from the absent parent involved. Public housing waiting lists
are often three to five years long.

Most of us would have no reason or desire to learn the ins and
outs and ups and downs of social programs. Public opinion gen-
erally associates such programs with shame and embarrasment.
Many people who make public comments on these programs are not
familiar with the requirements and specifics involved. Emotion
often smothers opportunities to learn about some of the facts,
and loud, our face" activism often turns those willing

to listen to “another side" away. The foundation of the welfare
"problem" in our country is not laziness. It is not a lack of
opportunity, It is simply a lack of accountability.

“Welfare”, in its purest sense, is a payment to a parent for
temporary provision for a child and/or children who are missing
the benefit and support of an absent parent. It can be a parent
of any age, color, or background. They just must be shown to

be both "absent" and not providing. A welfare payment is intended
to be temporary pending the initiation and proper implementation
of a child support order. How many people would know or
understand this relationship? Not many. Welfare is intended

to be replaced with child support. The focus of the debate has
never centered on this fact.

In my capacity as a married, yet single parent, I have tried
to share some of the information I have learned from first-hand
experience. It has been unpleasant and difficult. Being a single
parent is not always glamorous or desireable. It is not fun

to have your young daughter go alone into receive stitches while
you have to wait outside the room and tend to the other children.
There is value in taking care of our children. If we do not

do it ourselves, we must pay someoneelse to do it for us. Our
economy often dictates that both parents in a family work outside
of the home to provide for the family. We have overlooked this
fact in the welfare debate.


25

you have seen today from Massachusetts and Michigan, it just
seems to me that if your State is dedicated to providing services
to your welfare population to try to get them off of welfare and into
work, then you should be prepared to submit some of your re-
sources in addition to the Federal resources to make that happen,
as the other States have and will.

Ms. Nazario. I certainly agree with you, Mr. McCrery, and we
are doing that. Our waiver was predicated on a 50-50 partnership
with the Federal Government and that will not happen now. As I
have indicated, we are putting a lot of State dollars into our JOBS
Program and into our child care program, State-only dollars, that
are not Federal. It is my understanding that the contingency fund
was reduced to $100 million.

Mr. McCrery. No.
canairman Suaw, The time of the gentlemen has expired. Mr.

ollins.

Mr. CoL.ins. Thank you, Mr. Chairman. We appreciate you folks
being here and giving us some ideas of how welfare reform has
been successful in many areas. Ms. Nazario, I am one of those who
would just love to send you a block grant with no strings attached.
Of course, there are some people in the Congress who feel that the:
have more ideas and better ideas about how you should do your jol
in your State. So therefore, the Congress does decide to attach
some strings to it.

You mentioned lowering the contingency fund. We did lower it
some. But the $7 billion increase in the total block grant program,
I think, will more than suffice for that lowering.

There has been a lot said about what if the economy turns down-
ward and that could happen. It has happened in the past. I think
that is what makes the overall picture of what we are trying to do
in this town today so important because we are trying to prop this
country up from a downward turn in the economy. We are trying
to do that through a complete balanced budget within 7 years. It
has been agreed by both the House, Senate, and the President that
we will do that and it looks like that is going to become a reality.
Hopefully, within the next few days, we will reach some type of
agreement toward a balanced budget.

Why is it so important to balance the budget? It is because of the
economy. It is because of the individuals in this country. It has
been said by Greenspan and a number of other economists in this
town and across the country that if we reach the balanced budget—
in fact, Wall Street is kind of supporting itself with the evidence
of what has happened in recent days. But if we reach the balanced
budget, just on paper, a potential of reaching a balanced budget in
7 years, it will lead to a stronger economy. It will lead to less infla-
tion, lower interest rates, more realized income of those who work
and earn a paycheck.

And another very important portion of the estimates of a bal-
anced budget is it could lead to very little or no trade deficit be-
cause of all of the things that go into the cost of manufacturing in
this country. The support of the welfare system goes into it. All
taxation goes into it. Regulatory requirements go into the cost of
manufacturing. Litigation goes into the cost of manufacturing, pro-
tection of the consumers, all of this. We are trying to stabilize and


90

Our American conscience needs to take the time to understand
the facts and realities of this issue before we take a national
stand. Yes, people do abuse the system. But, many people in
many various positions abuse "the system". It seems to be a
sad, but integral part of human character. We have to address
the big concerns of our country. Our economy. Taxes. The social
and moral direction of our legislation and leadership. In doing
so, we have to throw out the assumptions and superfluous stereo-
types and deal with the facts. When it comes to welfare, we
have got to do the same, Legislating on assumption will get

us nowhere. There has to be’a call from the “people” that all
parents be held accountable to provide for their children. It
is not the government's job to raise our children. That re-
sponsibility, with few exceptions, lies with parents. But, when
a parent refuses to be responsible to provide for their child,
only the government can demand that he or she be held
accountable.

Portis NO Oe


TESTIMONY OF CARMEN NAZARIO

SECRETARY OF DELAWARE DEPARTMENT OF HEALTH AND
SOCIAL SERVICES

October | of this year marked the official start of Governor Carper’s welfare reform initiative, " A
Better Chance". Although our initiative is new, our experience with welfare is not. The
Governor's proposal represents a culmination of Delaware's experience and was developed in
conjunction with the preeminent public policy thinkers in our State and around the country.

The Governor's vision is consistent with many of his colleagues in state houses around the country
and with many of his former colleagues in Congress.

I would like to take this opportunity today to describe Delaware's initiative, to discuss problems
envisioned by the current national reform efforts, particularly in the area of child care, and offer
some recommendations for modifications to improve our chance of providing a better chance for
Delawareans.

A BETTER CHANCE

Five key elements form the basis of "A Better Chance” ; 1)that work should pay more than
welfare; 2) that welfare recipients must exercise personal responsibility in exchange for benefits;
3) that welfare should be transitional, not a way of life 4) that both parents are responsible for
supporting their children and 5) that the formation and maintenance of two parent families should
be encouraged and the teenage pregnancy should be aggressively discouraged

Work must pay more than welfare

‘Making work pay more than welfare is critical. A Better Chance will allow welfare parents who
take an entry level job to keep part of their benefits. It encourages full use of the federal earned
income tax credit, and addresses the two most critical barriers to private sector employment for
poor families’ access to child care and health care. In addition we believe the tax system must
provides incentive for low income working families. The EITC program must be sufficiently
funded

Welfare recipients must exercise personal responsibility

Our plan expects clients to cooperate fully in establishing paternity, as well as to complete
parenting classes and family planning. Clients are expected to take full advantage of educational
and job training opportunities. They must accept a job offered and are expected to keep their kids
in school and to see that they are immunized

Clients who do not take responsibility will face severe, progressive sanctions.

Well ould be trat

ior

Welfare should not be a way of life, but rather a time-limited, program focused on moving

persons back to self-sufficiency, By 1997 there will be a two year time limit for every welfare
recipient age 19 or older. If the recipient has not secured private sector employment by the end of
that time limit, the state will enable that person to take a workfare job and earn their welfare
check for a maximum of two more years.

By 1999, the Delaware plan would totally overhaul the system. At that time new welfare
applicants who cannot find jobs will be permitted to work in workfare jobs for a maximum of two
years, to earn their welfare check. No able-bodied person in Delaware will receive a welfare
‘check if he or she refuses to work.


61

Ms. PETERSON. I start my RN program January 4. I am going
back to school in January to get my RN.

Mr. Camp. Super. Thank you very much.

Chairman SHAW. Mr. Levin.

Mr. Levin. Thank you, Mr. Chairman, and thanks to all the wit-
nesses. I think we all admire your initiative.

I do not really have any questions. I do think there has been
some clarification. Ms. Peterson, you were going to school for 4
years full time?

Ms. PETERSON. I believe it was a flaw in the way the system was
managed. I do not know whether it was Federal mandates or
whether it was State, but I was required to go full time even
though a good portion of that time was spent on a waiting list to
get into the actual nursing program. I had fulfilled my pre-
requisites for that program, but I was still required to go full time.

Mr, Levin. So your course would not have otherwise required 4
years?

Ms. PETERSON. It may not have required that length of time, cor-
rect.

Mr. LEvIN. It might be a provision we want to look at. That is
one that will be the value of bipartisan discussions. I am not sure
what the answer is. Four years is a long time. But it may well be
that we should give States flexibility when somebody is enrolled to
not require them, especially depending on the number of children,
to work a job part time. I am not sure of the answer either, but
I think we need to look at that.

We very much admire your efforts and I hope we will take seri-
ously what each of you said about child care. You mentioned, Ms.
Peterson, time limits. But the time is late. If you have any
thoughts on that, drop us a note. Mr. Camp and I are both from
Michigan. Of course, it is the same postage even if you send it here.
So either way, if you have any further thoughts on that, let us
know. Again, thanks to all of you.

Chairman SHAw. I have one question for Ms. Haskins. I think I
heard you say something that I want to be sure that we fully un-
derstand. How long were you receiving AFDC before you got into
some type of a job or job program?

Ms. HASKINS. I started in 1981.

Chairman SHAW. Let me tell you what I am getting to and then
you can fill in the blanks and see if I am correct. I think I heard
you say that the longer you are sitting home doing nothing, the
More you lose your incentive to move forward. Is that a correct
statement?

Ms. HASKINS. Yes, it is. Also, being home you do not get a chance
to improve the skills you do have. Once you go and try to get a job
after being home for a while and they ask you, What experience
have you had? Without the experience, they do not usually give you
a chance, because I applied at different places.

Chairman SHaw. So I am right in saying that you believe the
type of welfare system that we should have should place the em-
P asis on getting people on their feet and out of the home as quick-
ly as possible, and that the longer that is prolonged, the tougher
it is going to be to mold the individual into a job?

Ms. HASKINS. Yes.


77

Chairman SHAW. Mr. Levin.

Mr. Levin. Thank you very much. I am sorry I missed part of
your testimony, Ms. Schulz.

The hour is late. I just wanted to ask the three of you a question.
In many respects, I think if we left writing the bill to the three of
you, we could come up with a bill that would make a lot of sense
and would be signed into law, but there are some differences. So
if you would, talk a bit, the three of you, about the role of training,
of education. Here Dr. Mead and Dr. Gueron have some differences.
You are closer in your testimony than I think a lot of people tend
to think.

But let us talk about that. Why do we not just go right to left.

Mr. MEap. I do not think we differ much. I would give a priority
in work programs to actual work, actual job search. But once a per-
son has part-time work, I would also promote education and train-
ing for better jobs. What I want to stop is the excessive preference
given for education and training in the Family Support Act, as im-
plemented through the JOBS Program.

For too many people in JOBS today, education and training is a
substitute for employment, a way of postponing the day when one
comes in contact with the labor market. We have got to put an end
to that. But having said that, I think training and education, in
conjunction with part-time work, can be quite constructive.

Ms. GueRon. I agree a lot with what Larry said. I think we have
learned from the research that work-focused programs that start
with job search but may include short-term education and training
that are designed to get someone into a job, have the greatest po-
tential to save money. However, I would add that it is somewhat
ironic to combine block grants with too many restrictions on the
ability of States to use other components. A staff may favor
achievements like the woman we just heard from who went
through a 4-year nursing program. She particiapted in long-term
education and training in order to obtain higher wages—she said
she was getting $9 an hour at the end of that program. It is funny
to come at a block grant and say that those other goals would not
be supported by the participation standards and by what is count-
able activity.

So I think the research shows that if your goal in running a
work-focused program is to save money and get more people into
jobs, you should start with job search and not have extensive edu-
cation and training. But if your goal is to increase skills and wages,
some training programs have shown they are able to do that.

Ms. ScHuLz. I would agree with both of those things. The New
Hope experience is that it is a work-based program, so when indi-
viduals are coming in, they come in with that understanding, that
this is a viable option if and only if they are prepared to work.

But what we have seen demonstrated is that there appears to be
a developmental process by which the next step, once someone is
employed and they are looking to be able to increase and move for-
ward in their income, is that they are then more likely to want to
seek out training and educational programs that will be beneficial
to them.

Mr. LevIN. Thank you.

Mr. Chairman.


47

Ms. CoMAI-PAGE, We certainly made efforts to connect people to
benefits that they would be eligible for.

Mr. ForD. So you were just cutting general assistance funds from
the State of Michigan, but shifting that cost to the taxpayers under
the Social Security Entitlement Program basically?

Ms. Comal-PAGE. We made sure that people who were eligible for
assistance got the assistance they were eligible for.

Mr. ForbD. But they were not eligible for general assistance in
Michigan, but you thought they would be eligible for taxpayers’ as-
sistance on the Federal level under the Social Security Administra-
tion?

Ms. Comal-PacE. If they were disabled, yes.

Mr. Forp. And that made up for a large portion of your——

Ms. Comal-PaGE. The figures that I have been quoting in my tes-
timony about decreases in AFDC caseload are independent of any
movement to SSI.

Mr. ForD, Even with the children?

Ms. Comal-PacE. That is correct. But let me clarify. The evalua-
tion that we had that showed that there were differences in fami-
lies in terms of increased work effort, in terms of $100 million in
savings for our program, the first. 2 years, those were independent
of changes in SSI received by children.

Mr. Forp. Michigan got about 80,000 adults from the general as-
sistance program in 1991. Two years later only one-fifth at final
study were working, and another 17 percent found jobs every now
and then, and many needed to find assistance from other govern-
ment programs. So you moved disabled people and children from
the general assistance which is State funds to the federally funded
SSI program, right?

Ms. COMAL-PAGE, That is correct.

Mr. Forp. So, the whole general assistance program is not one
only of AFDC, So a lot of the things that you are discussing here
today is not directly related to AFDC. This is your own State's gen-
eral assistance program?

Ms. CoMAI-PaGE. That is correct, the people who were eliminated
from the general assistance program in Michigan. I would term
that elimination not welfare reform. I would say that that was an
effort. We had a $1.8 billion State deficit and we had to learn how
to deal with that. The way we dealt with it was to protect children
and families.

Mr. Forp. But those were mostly men, not women with children
at home?

Ms. Comal-PaGE. They were. Anybody who was on general assist-
ance——

Mr. Forb. I know they were anybody, but the majority of
those—

Ms. Comal-PaGE. There were families on general assistance and
we have continued to provide assistance to those families. The peo-
ple who were eliminated from general assistance were single
adults.

Mr. Forp. There was one report by a scholar at Michigan State
that indicated most of the people that we are talking about were
worse off 2 years later after all of this took place in Michigan than
they were prior to this move that was made in 1991 with 80,000


49

Under the current system, Michigan Department of Social Services’ workers spend
only 20 percent of their time actually working with clients. They spend the rest of
their time dealing with the burdensome rules and regulations imposed by the Fed-
eral welfare bureaucracy.

Mr. Schilling, what has been your experience as far as the time
spent actually working with a client versus with compliance with
bureaucracy?

Mr. SCHILLING. Since we have switched to Work, Not Welfare,
the percentage has gone up as far as client contact, but our eco-
nomic support specialists, those persons who actually work with de-
termining eligibility and benefits, I would have to say that their
face-to-face time with clients is not dissimilar from that of Michi-
gan’s. It is because it is extremely complex. Our JOBS case man-
ager on the other hand works as part of a team. They spent the
majority of their time in face-to-face contact with AFDC clients.

thairman SHAW. Ms. Nazario, what has been your experience
with that?

Ms. Nazario. I am not prepared to say what exact percentage of
the time they spend, but certainly we are reorganizing our division
of Social Services to make the cases totally generic and to have
workers really work with a family tracking families across services,
as opposed to services across families. And there is no question
that the eligibility requirements are onerous. We are still looking
at how much they will be simplifying it in the future—still a lot
of overlay that we now have to track clients across the country to
be sure they have not received services in other States. So there
is a lot more reporting than we are used to. So I am not sure how
much they actually will be simplifying in the future versus what
we are doing today. But we certainly are looking toward more di-
rect case management and more time spent with the client.

Chairman SHAW. Mr. Gallant.

Mr. GALLANT. We are definitely moving into more of a recipient/
client contact than a case management mold, particularly since we
have passed welfare reform in our State and we started to imple-
ment it on November 1. However, those people who do not directly
participate in helping people find jobs, 100 percent of their time is
spent filling out forms and paperwork and that includes the vast
majority of about 2,000 staff people we have across the State. The
overwhelming majority of the 2,000 spend all of their time filling
out forms and looking at and meeting requirements, most of which
are in the Federal regulations.

And I think that any chance that any State has to streamline the
regulations, particularly if it has a block grant and it has the au-
thority to cut back on various Federal definitions, various Federal
QC requirements, various error rate issues, I think that will go a
long, long way toward lifting the burden of doing paperwork and
allowing Hoople to do more one-on-one direct service kinds of func-
tions.

Chairman SHaw. I would hope that we would be able to assist
you in slowing that down. I know yesterday in speaking with some
reporters Eloise Anderson, who is the State director from Califor-
nia, was commenting on some 9 feet of regulations that she had to
comply with and that is absolutely incredible. I think we have just
gone nuts with bureaucracy and we are trying to do everything we



we

12

In Delaware, the maximum AFDC payment for a mother and one child is $270
per month or $3,240 per year. These families make up 35% of our AFDC
cascload.

If the child is an infant, the cost of child carc ranges from:
Wl fora day care center - about $4,300 per year
@ fora day care home - about $3,500 per year

If the child is over age one, the cost of child care ranges from:
@ fora day care center - about $3,800 per year
1 fora day care home - $3,200 per year

In Delaware, the maximum AFDC payment for a mother and two children is $338
per month or $4,056 per year. These families make up 25% of our AFDC
caseload.

If the one child is an infant and the other is older, the cost of child care ranges from:
@ for a day care center - about $8,100 per year
@ fora day care home - about $6,700 per year

If both children are over age one, the cost of child care ranges from:
IB fora day care center - about $7,600 per year
@ for a day care home - $6,400 per year

Tn Delaware, the maximum AFDC payment for a mother and three children is
$407 per month or $4,884 per year. These families make up 13% of our AFDC
caseload.

If the one child is an infant and the other children are older, the cost of child care

ranges from:
@ for u day care center - about $1 1.900 per year
@ for a day care home - about $9,900 per year

if all children are over age one, the cost of child care ranges from:
@ for a day care center - about $11,400 per year
@ fora day care home - $9,600 per year

In Delaware, a family with income at 75% of poverty (about $7,500 per year for a family
of 2) pays 12% of it’s child care cost.

A family with income at 155% of poverty (about $15,500 for a family of 2) pays 26% of
the cost.

In families with older children, the financial burden is less for the state and the parent
during the school term and Delaware does not pay for child care for children over age 12..