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MAKING ENDS MEET: CHALLENGES FACING

WORKING FAMILIES IN AMERICA

HEARING

BEFORE THE

COMMITTEE ON THE BUDGET

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

HEARING HELD IN WASHINGTON, DC, AUGUST 1, 2001

Serial No. 107–16

Printed for the use of the Committee on the Budget

(

Available on the Internet: http://www.access.gpo.gov/congress/house/house04.html

(II)

COMMITTEE ON THE BUDGET

JIM NUSSLE, Iowa, Chairman

JOHN E. SUNUNU, New Hampshire

Vice Chairman

PETER HOEKSTRA, Michigan

Vice Chairman

CHARLES F. BASS, New Hampshire

GIL GUTKNECHT, Minnesota

VAN HILLEARY, Tennessee

MAC THORNBERRY, Texas

JIM RYUN, Kansas

MAC COLLINS, Georgia

ERNIE FLETCHER, Kentucky

GARY G. MILLER, California

PAT TOOMEY, Pennsylvania

WES WATKINS, Oklahoma

DOC HASTINGS, Washington

JOHN T. DOOLITTLE, California

ROB PORTMAN, Ohio

RAY LAHOOD, Illinois

KAY GRANGER, Texas

EDWARD SCHROCK, Virginia

JOHN CULBERSON, Texas

HENRY E. BROWN, Jr., South Carolina

ANDER CRENSHAW, Florida

ADAM PUTNAM, Florida

MARK KIRK, Illinois

JOHN M. SPRATT, Jr., South Carolina,

Ranking Minority Member

JIM MCDERMOTT, Washington

BENNIE G. THOMPSON, Mississippi

KEN BENTSEN, Texas

JIM DAVIS, Florida

EVA M. CLAYTON, North Carolina

DAVID E. PRICE, North Carolina

GERALD D. KLECZKA, Wisconsin

BOB CLEMENT, Tennessee

JAMES P. MORAN, Virginia

DARLENE HOOLEY, Oregon

TAMMY BALDWIN, Wisconsin

CAROLYN MCCARTHY, New York

DENNIS MOORE, Kansas

MICHAEL E. CAPUANO, Massachusetts

MICHAEL M. HONDA, California

JOSEPH M. HOEFFEL III, Pennsylvania

RUSH D. HOLT, New Jersey

JIM MATHESON, Utah

PROFESSIONAL STAFF

RICH MEADE, Chief of Staff

THOMAS S. KAHN, Minority Staff Director and Chief Counsel

(III)

C O N T E N T S

Page

Hearing held in Washington, DC, August 1, 2001 ................................................ 1

Statement of:

Hon. Benjamin L. Cardin, a Representative in Congress from the State

of Maryland ................................................................................................... 4

Marian Wright Edelman, President, the Children’s Defense Fund ............. 8

Ron Haskins, Ph.D., Senior Fellow, the Brookings Institution .................... 15

Sharon Daly, Vice President for Social Policy, Catholic Charities USA ...... 53

LaVerne Hewlett, Working Mother, Emmitsburg, MD ................................. 65

Robert Rector, Senior Research Fellow, the Heritage Foundation ............... 67

Prepared statements, additional submissions of:

Hon. Jim Matheson, a Representative in Congress from the State of

Utah ............................................................................................................... 3

Hon. Darlene Hooley, a Representative in Congress from the State of

Oregon ............................................................................................................ 4

Mr. Cardin ......................................................................................................... 6

Ms. Edelman:

Prepared statement ................................................................................... 10

Additional submission ............................................................................... 41

Reply to Hon. David E. Price, a Representative in Congress from

the State of North Carolina, question regarding Head Start ............ 48

Dr. Haskins ....................................................................................................... 17

Ms. Daly ............................................................................................................ 56

Ms. Hewlett ....................................................................................................... 66

Mr. Rector ......................................................................................................... 69

(1)

MAKING ENDS MEET: CHALLENGES FACING

WORKING FAMILIES IN AMERICA

WEDNESDAY, AUGUST 1, 2001

HOUSE OF REPRESENTATIVES, COMMITTEE ON THE BUDGET, Washington, DC.

The committee met, pursuant to call, at 10:11 a.m. in room 210,

Cannon House Office Building, Hon. Jim Nussle (chairman of the

committee) presiding.

Members present: Representatives Nussle, Gutknecht, Collins,

Miller, Putnam, McDermott, Bentsen, Clayton, Hooley, Moore,

Capuano, Holt, Matheson, Honda, Price Clement, and Moran.

Chairman NUSSLE. Good morning. This is the full committee

hearing that we call ‘‘Making Ends Meet: The Challenges Facing

Working Families in America,’’ before the full Committee on the

Budget. Today we are honored to have a number of witnesses to

come forward to talk to us about this very critical issue.

I want to begin by complimenting my very good friend, Mrs.

Clayton, for her suggestion that we hold this meeting. She made

this suggestion to me in private, and then did so at, I believe, the

full committee markup of the budget. I appreciate the suggestion

that we have this hearing to discuss the way that the Federal Government approaches families in need across America, or the way

that those needs are not met in any instances and how we can do

a better job.

I would be happy to recognize Mrs. Clayton for an opening comment in a moment. But let me just inform the committee that before us today, we have a returning alumni member of the Budget

Committee, our good friend from Maryland and my partner on

some budget process reform issues that—believe it or not, Ben, we

are still discussing and debating—Ben Cardin from Maryland.

Mr. CARDIN. I know you will be doing that well beyond our

terms.

Chairman NUSSLE. I have a feeling you are right. He is the ranking member, of course, on the Ways and Means Subcommittee on

Human Resources.

We are honored as well to have Marian Wright Edelman, who is

the president of Children’s Defense Fund. We are honored to have

you here today. We know of your good work and concern, and we

appreciate your willingness to come forward and give us your advice.

We also have the opportunity to hear from Dr. Haskins. Dr.

Haskins is a former alumni from the Ways and Means Committee,

and worked quite a bit as we worked through the very difficult subVerDate 11-MAY-2000 14:28 Feb 09, 2002 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 H:\DOCS\HEARINGS\107-16\HBU213.000 HBUDGET1 PsN: HBUDGET1
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ject of reforming welfare. He is now a senior fellow at the Brookings Institute.

We welcome all of you to the panel. It is a very serious subject

we need to consider, and I would be happy to recognize either Mr.

McDermott or Mrs. Clayton for any opening comment. Mrs. Clayton.

Mrs. CLAYTON. Thank you, Mr. Chairman, and thank you also for

keeping your word and working on this issue. I know you also care

about the issue, and I thank the witnesses who have come to share

their insights. I ask for permission to put my full statement into

the record.

Chairman NUSSLE. Without objection.

Mrs. CLAYTON. I just want to cite a couple of points. About 2

years ago I made these statements. I would like to say them again.

For some, these are the best of times. The United States is now

enjoying the longest sustained period of economic growth in the

history of the Nation. We have seen more people get into the work

force, there are higher wages and low unemployment. We should

be grateful for that. Many people have become wealthy and more

have entered into the middle class. For them, this is a robust prosperous economy.

However, for many people—due to no fault of their own—this has

been the worst of times for them. While the rich have gotten richer,

many people have apparently gotten poorer.

The national budget and policy debate this year has focused on

how to spend the projected budget, not the one we are spending

now, the projected budget surplus over the next few years. Some

favor a huge tax reduction that would tend to increase the income

of the wealthy. Others favor paying the national debt and investing

in Social Security and other measures to ensure our economic security in the future.

It is time for the debate to include some consideration of the effect of Federal Government policies in creating or exacerbating

wide income wealth disparities and what it can and should do to

reverse those conditions. It is time for Congress to provide additional, necessary, nutritional benefits such as food stamps and assistance, especially for children and people who work full time, who

indeed cannot make enough wages so that they can provide their

income.

My last statement is that income and wage disparity are sometimes compounded by race, education, gender, and family structure.

We as policymakers need to see that. A recent report from the Children’s Defense Fund documented the high risk of children who live

in poverty: steady growth, less education, and lower earnings.

Sadly, the number of people who live in poverty, who suffer from

hunger or food insecurity number more than 4 million or more children and many millions of adults and seniors.

Indeed, Mr. Chairman, these are serious issues that affect all

Americans, and I thank you for this hearing. I look forward to

hearing the witnesses who have come.

Chairman NUSSLE. Thank you. I ask unanimous consent that all

the members be given 7 days to submit statements for the record.

Without objection, so ordered.

[The prepared statement of Mr. Matheson follows:]

3

PREPARED STATEMENT OF HON. JIM MATHESON, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF UTAH

Chairman Nussle, Mr. Spratt, members of the committee. I am very pleased that

the committee has decided to take up this important topic today. Too often I am

afraid that our hearings are not focused on the true plights of those we represent.

We talk about a lot of important issues, but often without relevance to the day-today lives of working Americans. This hearing is about those day-to-day lives.

The challenges that face the working poor in this country continue to be immense

despite years of economic growth and even declining welfare roles. Many Americans

are still struggling to make ends meet. Understanding the core sources of those

struggles, is essential for Congress to act in one of its most important roles, as a

steward over the public welfare.

In preparation for this hearing, I have spent some time trying to understand

something about the working poor that live in my home state of Utah—trying to

better grasp what challenges are most insurmountable to them. Although my remarks are by no means exhaustive of the numerous social and economic struggles

that these families face, I would like to share two of the most problematic components of climbing out of poverty in Utah.

When you just look at the numbers, Utah does not appear to be doing too badly.

Utah has the second lowest poverty rate in the United States, 8 percent of residents

live below the poverty line. However, these numbers are somewhat more complex.

If household income is figured on a per capita basis, that is accounting for the number of individuals within a household, and more accurately indicating their economic

well-being, then larger Utah families are not doing very well. In fact by this measure, Utah’s annual median per capita income falls behind the national average by

$5,254. In addition, although Utah has relatively low unemployment rates, when

the average wage earned in Utah is compared to its national counterparts in key

industries and work sectors, the average wage in Utah is nearly 16 percent below

the national average. This is especially critical since the cost of living index for Utah

is comparable to the national average, and higher than the national average in the

state’s metropolitan areas.

These numbers reveal the complex nature of understanding true poverty, since

the poverty people experience is related more to the number of individuals in their

household, and the way wages compare to their cost of living. It is then possible

for a state like Utah to have had great economic growth, high rates of employment

and forecasts of continued job growth (as Utah has for the last decade) and see the

numbers of uninsured and underinsured increase, the demand at local food pantries

grow, and the services requested from local agencies balloon. Truly, poverty is a

more complex issue than an initial brush that numbers may indicate.

One of the greatest challenges facing families in Utah is affordable housing. The

National Low Income Housing Coalition defines a housing wage as the ‘‘amount a

worker would have to earn per hour in order to be able to work 40 hours per week

and afford a two bedroom unit at Utah’s Fair Market Rent.’’ In Utah the FMR is

$608, which means that the housing wage in Utah is at least $11.69 per hour. Compared to the accepted standard for housing costs, 30 percent, the average renter in

Utah pays 65 percent of his or her income on a two-bedroom unit. In fact, if a worker was earning minimum wage, $5.15 per hour, it would take working 91 hours per

week to be able to afford a two bedroom unit in Utah. Affordable housing is obviously a crisis for families working to make ends meet.

This is only exacerbated by the costs associated with child care. For the working

poor there is very often no choice besides child care if they want to work. Yet, the

cost of child care in Utah is nearly debilitating. According to the Department of

Workforce Services Office of Child Care, 54 percent of parents seeking referrals for

child care services in Utah earn less than $25,000 a year. At the same time, the

cost of child care alone is between $3,500 and $4,500 a year per child, more than

tuition at the University of Utah. Although 13,000 children in Utah received child

care subsidies last year, this only represents 25 percent of the eligible population

according to state standards, and only 10 percent of the eligible population according to Federal standards. To be eligible for child care support a family must make

$21,108 or 56 percent of the State Median Income. On average, for a family of three

making $15,000 a year, nearly 41 percent of their income will go to child care expenses—if they have more than one child, the cost of child care becomes almost prohibitive.

If a working family in poverty in Utah was to pay 65 percent of their income in

rent and 40 percent of their income on one child’s child care, they would have already over-spent their income. However, this same family, who received support

through a combination of state funds and the Federal Child Care and Development

4

Fund, would spend less than 1 percent of their annual income on child care. Clearly,

Federal programs can have an impact on alleviating the burdens faced by working

families.

The reality of these complex situations requires local, state, and Federal partnerships. The answers are inherently multi-faceted and not easy. However, I hope that

as we talk about housing, and child care, and welfare, and health care we in Congress can remember that there are many real, working people who struggle to make

ends meet. Again, I commend the committee for holding this hearing. Taking the

time to address these issues is not always the most politically expedient action, but

it is a critically important one. I look forward to the witnesses’ testimony and their

suggestions for potential solutions to the situations faced by so many Americans in

poverty.

[The prepared statement of Ms. Hooley follows:]

PREPARED STATEMENT OF HON. DARLENE HOOLEY, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF OREGON

I would first like to thank the Chairman for allowing this hearing to take place

today. This is an extremely important issue and I am looking forward to hearing

from our panels today.

There are so many problems facing the working poor in our country, that it is

hard to know where to begin when talking about the issue. The problems that we

as a country must address are many, and are not small. The Federal Government

classifies an annual income of $14,000 as the poverty line. If you use this as a basis

for your determination of who is in poverty, then over 12 percent of the United

States population, or 32 million people are poor. Tens of millions more have incomes

that will not cover their basic needs. For many of these people it’s not that they

cannot find work, it’s that they cannot find work that pays enough. Jobs that pay

$6 or $7 an hour just can’t cover all the expenses of day-to-day life and that is how

too many Americans live: DAY-TO-DAY.

We need to expand health coverage to all low-income parents and their children,

affordable child care needs to be more readily available so parents can work, and

probably the biggest issue facing the poor in our country is affordable housing. However, not only is cost a major issue, but for 20 percent of families, their housing is

substandard. So the question is what can we do that we are not doing? What can

we do differently?

As we continue to work to find answers to these important questions, I look forward to hearing the testimony from our witnesses. I yield back the balance of my

time.

Chairman NUSSLE. We will start with our good friend and colleague, Representative Cardin from Maryland. We appreciate you

being here today, and we welcome you back to the committee. All

of the witnesses’ statements will be made part of the record and

you may summarize as you would like.

STATEMENT OF THE HON. BENJAMIN L. CARDIN A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MARYLAND; MARIAN WRIGHT EDELMAN, PRESIDENT, THE CHILDREN’S DEFENSE FUND; AND RON HASKINS, PH.D., SENIOR

FELLOW, THE BROOKINGS INSTITUTION

Mr. CARDIN. Thank you, Mr. Chairman. Let me thank you very

much for conducting this hearing. I also want to thank Marian

Wright Edelman for being here today. She is our hero on the issues

affecting families in our society and for all the work she has done

for many years, so it is an honor to be with her on this panel.

And also Dr. Haskins. The two of us worked very closely together

on the Ways and Means Committee when he was chief counsel to

the Human Resources Subcommittee that I have the honor of being

the ranking Democrat.

I really do applaud you for holding this hearing because I think

it is important how our Nation responds to the problems of working

families and whether we are doing enough. During the last 8 years

5

we have made progress. We have made progress in large measure

because we have had unprecedented economic growth in our country. We have moved forward in Congress on the earned income tax

credit, which has helped a great deal. And I would also suggest

that the welfare reform bill of 1996 also made a difference. So we

have made a lot of progress during these past 8 to 9 years, but

there is still much work that needs to be done and that is what

concerns me.

I don’t want us to be lulled into a sense that we have accomplished our goal when we have not. One out of every six children

in the United States grows up in poverty. That is unacceptable. It

should be unacceptable to all of us. We know we can do better.

We are now looking at an economic slowdown. We don’t know

how long it is going to last and what impact it is going to have,

but clearly our vulnerable children will be even more vulnerable;

our vulnerable families will be more vulnerable. As we take a look

at the people who are currently depending upon our welfare system, we see that they have tremendous economic challenges. We

know that they have tremendous needs, and it is going to be more

difficult for us to deal with these particular families.

So Mr. Chairman, I must tell you up front, I was disappointed

by the President’s budget because I don’t think the President’s

budget spoke to this as a priority. When you look at his request

for the Administration for Children and Families, it rose by an unacceptable 2.9 percent growth. When you look at the other areas

within the President’s budget, those grew by much larger percentages. This was one of the smallest growth areas. Inflationary

growth is about 3.6 percent, discretionary growth is about 4 percent, but for our children and families only 2.9 percent. We can do

better.

When you take a look at some of the President’s initiatives and

then match it up with what actually has happened in the budget,

we have a mismatch. In regards to one of his major initiatives, the

faith-based initiative, the President did not restore the cuts to the

social services block grant, which is probably one of the most important programs that could help faith groups. Why haven’t we

provided more money in the social services block grant?

The President talks about a fatherhood initiative. That is very

important, but there is nothing in the President’s budget to allow

the pass-through of child support to families. Right now we have

a policy that if you pass child support through to families, the

State has to repay the Federal share. That is not right.

The President talks about continuing the momentum for our welfare system, yet his budget didn’t provide for the supplemental

grants that 17 States rely upon. In each of these areas, Mr. Chairman, there is bipartisan support. We have bipartisan support to increase the social services block grant to deal with the fatherhood

initiative and to deal with welfare. So I would urge us to recognize

that we can do better.

There was one area that I think the President did move forward

in his budget, and I want to raise a question to the committee on

it. The President’s budget provides for $200 million additional

funds for promoting safe and stable families. That is good. That is

something that Democrats and Republicans can agree upon. The

6

budget that was passed by Congress provides for the supplemental

grants in TANF, which 17 States rely upon. So we have two initiatives that I hope we would move forward.

But, Mr. Chairman, I would rest easier if you could assure us

today that the funding allocations in the budget resolution for

these programs is still in place. I am not sure it is because of the

suggestion about extra outlays already being used up in the tax

legislation that has been reported from our committee.

So if you clarify for us as to whether we could move forward on

these two initiatives that are covered under the budget resolution,

I think that would be good news for our families.

There are some areas—I don’t have a lot of time, but let me just

mention, if I might, four areas that I would hope the committee

would pay attention to providing some additional resources: child

care, child support, unemployment insurance, and TANF.

In the child care development block grant program, the current

funding level is just inadequate. We should be providing more

money to deal with child care. One half of our States have established family eligibility at less than 60 percent of the State’s median income. When you realize the cost of child care is between

$4,000 to $10,000 a year, we can do better and we must do better.

The child support issue I have already mentioned, where the current law imposes 100 percent tax rate on the lowest-income families in our society by having an offset on the child support that

goes—that is paid by the noncustodial parent. In some cases, these

families aren’t on welfare. We can do better. We have a bipartisan

bill to correct this.

On unemployment insurance, the GAO report this January indicated there is only limited protection for low-income wage earners.

It is very interesting. Low-wage earners are two times more likely

to be unemployed and they are one half as likely to collect unemployment insurance. We had a nonpartisan group of stakeholders

in the unemployment insurance field make a recommendation. It is

time we take that up and deal with it.

Mr. Chairman, let me lastly mention the issue of TANF. In 2002

we are going to have to reauthorize the welfare programs. The people who remain on welfare are our most difficult cases. They have

low income levels, low education levels, limited work history, substance abuse, domestic violence, disabilities. We need to start with

the premise that we will maintain our commitment of Federal resources on TANF, adjusted for inflation, so that our States can

plan for the next 5 years to have the Federal Government as a true

partner to deal with the most vulnerable in our society.

I urge you, as we start looking at this year’s budget and next

year’s budget, to allocate a reasonable amount of resources so that

we can accomplish these goals and reduce the poverty of our families in our country. Thank you.

Chairman NUSSLE. Thank you Mr. Cardin.

[The prepared statement of Mr. Cardin follows:]

PREPARED STATEMENT OF HON. BENJAMIN CARDIN, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF MARYLAND

Mr. Chairman, let me start by thanking you and Mr. Spratt for giving me this

opportunity to come before your committee to talk about our Nation’s response to

helping working families escape poverty.

7

Eight years of unprecedented economic growth, increases in the Earned Income

Tax Credit, and welfare reform have all contributed to the recent decline in the poverty rate. However, we cannot let this improvement lead us to complacency, particularly when one out of every six children in the U.S. continues to grow up in poverty.

Furthermore, we must recognize that the gains provided by a long economic expansion might quickly erode should the economy continue to slow down.

Therefore, I was disappointed that President Bush’s budget request for the Administration for Children and Families failed to keep pace with inflation and failed

to match the President’s overall spending update for government programs. We can

and must do better.

If President Bush is serious about helping faith-based organizations serve needy

families, he should propose restoring the deep cuts in the social services block grant,

which has a long history of collaborating with religious charities. If the President

wants to help non-custodial fathers play a bigger role in the lives of their children,

he should advocate sending those parents’ child support payments to their children,

rather than to the government. And if President Bush wants to maintain the momentum of welfare reform, he should recommend extending the so-called supplemental grants under the TANF program, without which 17 States will see a cut of

up to 10 percent in their welfare funding. Regrettably, the President’s budget is silent on these issues, despite bipartisan support for addressing all of them.

I should point out that the President’s budget did include some welcome and very

useful child welfare proposals. Most prominently, the Administration’s budget proposed a $200 million annual increase for the Promoting Safe and Stable Families

Program, which provides resources to prevent child abuse, to strengthen fragile families, and to promote adoption when appropriate. However, there appears to be some

confusion as to whether the recent tax bill used up the funding set aside in the

Budget Resolution to increase resources for this important child welfare program.

I hope the Budget Committee can clarify this situation quickly so that we can move

forward to address areas covered in the Budget Resolution, including the Safe and

Stable Families program and the TANF supplemental grants.

As this Committee considers future funding levels to help working families and

to address poverty, it might be useful to survey unmet needs in some key areas.

Because my time is short, I will focus on child care, child support, unemployment

insurance, and the Temporary Assistance for Needy Families Program or TANF.

The current funding level for the Child Care and Development Block Grant

(CCDBG) is insufficient to provide quality day care assistance to the millions of families attempting to escape or stay off welfare. In fact, about half of the States have

established thresholds for a family’s eligibility for child care assistance at less than

60 percent of the State median income leaving many low-income families without

access to child care subsidies, while still having too little income to benefit from the

Dependent Care Tax Credit. To realize the financial burden on these families, you

only have to remember that child care costs between $4,000 to $10,000 a year,

roughly the same as tuition at a public university. To ensure that working families

can find accessible and affordable child care, Congress should increase funding for

the CCDBG.

Like quality day care, consistent child support payments can help families move

toward self-sufficiency. Unfortunately, current law actually penalizes States that

send child support collections to families struggling to leave welfare, and in some

cases, to families that have already left public assistance. For example, if a State

sends a child support collection to family on welfare, it still owes the Federal Government between half and three-quarters of that same child support payment (based

on the State’s Medicaid match rate). This has discouraged States from passing

through child support, and encouraged them to adopt an effective 100 percent tax

rate on child support payments to certain families. Last year, the House overwhelmingly passed bipartisan legislation to end this disincentive for States to send child

support to families, but the Senate failed to act on the measure. The House should

again pass this legislation, particularly now that several compatible bills have been

introduced in the Senate.

Another hole in our Nation’s safety net exists in the Unemployment Insurance

system. In January, the Government Accounting Office reported that the unemployment compensation system provides ‘‘only limited protection for low-wage workers.’’

In fact, the GAO found that while low-wage workers were twice as likely to become

unemployed, they were only half as likely to receive UI benefits compared to higherwage workers (even when employed for similar periods of time). The fact is that UI

coverage rates are not very impressive for any group: only 18 percent of unemployed

low-wage workers were receiving UI benefits compared to 40 percent of higher-wage

workers.

8

As our Nation’s unemployment level continues to creep up, Congress should consider the non-partisan recommendations issued last fall by the major stakeholders

in the UI system to correct some of the program’s shortcomings. This plan suggests,

among other things, eliminating certain barriers to UI benefits, such as precluding

part-time workers from receiving assistance unless they seek full-time work, and ignoring the most recent wage data when determining eligibility.

Let me conclude with an issue Congress will consider next year, the reauthorization of TANF. There can be no doubt that welfare reform has been an important

factor in helping many low-income mothers join the workforce and begin to replace

a welfare check with a paycheck. But the job of welfare reform is far from done.

Those left on the rolls are more likely to have multiple barriers to employment, such

as low educational levels, limited work histories, substance abuse problems, domestic violence issues and disabilities. These problems will demand intensive services

to allow recipients to enter employment.

Just as importantly, many of those leaving welfare for work have yet to leave poverty for a better life. These individuals need help with both employment retention

and wage progression. In addition, we need to do a much better job of ensuring that

working welfare leavers receive other benefits for which they remain eligible, especially Medicaid and food stamps.

Finally, I want to correct a misconception that there has been an enormous decline in the TANF caseload. It is accurate to say that the number of people receiving

cash assistance from TANF has declined by half over the last 6 years. However, it

also true that the number of people receiving TANF-funded work supports, such as

child care and training, has grown substantially over the same period of time. Any

discussion about TANF’s future funding must account for this total TANF caseload,

not just those receiving cash benefits. This comprehensive caseload number explains

why States spent 93 percent of their annual Federal TANF grants last year, even

as the number of cash recipients continued to decline. In fact, a dozen States actually spent more than there annual TANF allocation in 2000, meaning they dipped

into funds reserved from past years.

For all of these reasons, Congress should continue to fully fund TANF—by which

I mean, the current allocation plus an adjustment for inflation. Such a commitment

will allow States to take the second step in welfare reform turning initial employment gains into permanent poverty reductions. Thank you.

Chairman NUSSLE. Now, as I said, we are honored to have Marian Wright Edelman from the Children’s Defense Fund. We welcome you and are looking forward to your testimony.

STATEMENT OF MARIAN WRIGHT EDELMAN

Ms. EDELMAN. Thank you, Mr. Chairman. Thank you for holding

this hearing. Thank you, Mrs. Clayton, for encouraging this hearing. I am honored to be here with Mr. Cardin and Dr. Haskins. We

will put our written statement in the record. I also want to put into

the record a report of the Children’s Defense Fund on families

struggling to make it in the work force, a post-welfare report, and

a summary of what we think this country and this Congress must

do; and that is the Act to Leave No Child Behind, which will end

child hunger.

Children’s hunger cannot wait for another year, so I am glad you

are thinking about moving food stamp reforms this year because

we should have no hungry children in the richest nation on earth.

This bill would grow our children’s health care coverage—which

you can do this year—coverage for disabled children and coverage

for children of legal immigrants. We have an opportunity to do

what is right by our children and see that in reality no child is left

behind. I am very pleased that three members of this committee

are sponsors to the overall bill and 27 members, including the

Chairman, sponsor certain provisions of this bill.

But the bottom line is it is time for our Nation to take care of

its children, all of them. I don’t know what your faith says, but my

faith didn’t say, those of us who are Christians, a few of the chilVerDate 11-MAY-2000 14:28 Feb 09, 2002 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6602 H:\DOCS\HEARINGS\107-16\HBU213.000 HBUDGET1 PsN: HBUDGET1
9

dren come, or half of the children come, or three fourths of the children, or only able-bodied children come, or white male children

come. It said all of the children come.

This Nation now has to live up to its promise for all of its children. Every 4 seconds a baby in America is born into poverty.

Every minute a child is born without health insurance. Every 11

minutes one of our children is neglected or abused. Every 2 hours

and 20 minutes a child is killed by guns. Nearly 11 million children

are without health insurance; 90 percent of them live in working

families, playing by the rules, not covered by their employers. We

can do something about that this year, and I hope you will.

Seven million school-aged children are without adult supervision

after school and during the summer months when parents are

working. They need to be taken care of. We can do something about

this. We can’t afford not to. Only 12 percent—as you have heard

Mr. Cardin say—of the children and parents eligible for child care

assistance are getting that.

We need to increase the funds for the block grant and the Act

to Leave No Child Behind. We would make sure that every eligible

parent get that. If people are going to stay in the work force, they

need not worry about the quality of care. We know about the importance of the early years, and so I really hope we are going to

pay attention to child care. That is one of the biggest reasons parents say they are not able to stay in the work force or go into the

work force.

Head Start serves 3 out of every 5 eligible children. We know it

works. Every child who should get a good start for school should

be getting Head Start, so we can do something about it. Most poor

children, Mr. Chairman, live in working families; 78 percent of

those children live in families where someone worked all or part of

the time—this is up from 61 percent in 1993.

And, again, we must make work pay. Our community monitoring

projects found that more than half of those who left welfare left for

a job, but many of those lost their jobs. And child care, the absence

of child care or stable child care, was the most frequent reason

given for not working. Sixty percent of those who left welfare to

work, in our community monitoring report, had wages below poverty. More than half suffered crises because of these low wages.

They were unable to pay rent or buy food or to get medical care,

and had their utilities cut off. Many States are not telling working

families that they are still eligible for food stamps or for housing

assistance or child care assistance.

Again, we can simplify and streamline these procedures. But,

again, if you are working and if our goal is self-sufficiency, you can

make a difference on that this year.

Education is a key factor. Our report found that those with a

high school education were more likely to be employed and to have

higher wages; and education and training for parents is a very important tool.

Finally, families who worked and received health coverage, child

care, and food stamps were more likely to have stable employment

and less likely to lose a job. So I hope that you will take steps now

to see that these supports for working families are available.

10

I want to emphasize the three or four things I hope you will do

and take action on this year. The first is health coverage for all uninsured parents and children, and other pending measures to simplify procedures so that parents can get the health care they need.

Coverage of legal immigrant children, allowing parents of children

who are disabled to buy into Medicaid is something we can do.

There should not be children without health coverage in this country and there should not be children of working families without

health care coverage. So I hope you will make it easier by simplifying Medicaid and CHIP, and provide that coverage this year. Sick

children cannot wait. I don’t want any one of us with a sick child

not to be able to get health coverage.

The second is, I hope you will take immediate action on food

stamp provisions in the farm bill reauthorization. You should not

ask hungry children to wait another year in order to get adequate

food when you have the means and the power to do something

about it. Our report, again, will outline how working parents are

not able to get enough food to make sure that their children don’t

go hungry. I hope you will take steps in the farm bill to make it

easier for low-income families to continue to receive food stamps

when they leave welfare for work by allowing States to provide 6

months of transitional food stamp benefits, making the benefits responsive, to larger families and to inflation by changing the standard deduction, decreasing bureaucratic barriers.

We lay these out in the written testimony, but the bottom line

is hungry children should not have to wait another day or a month

or a year in order to be fed.

And, last, I do hope that your fiscal 2000 Labor HHS appropriations bill and other funding issues will put some meat and money

and investment behind our wonderful words, ‘‘leave no child behind,’’ and that we provide adequate child care and invest in Head

Start and end the housing needs. And that is all, again, laid out

in the written testimony, but it is shameful that in the most powerful richest nation on earth that we have children living in poverty,

that we have hungry children, that we have children living in shelters, and many of them are in working families. These are not acts

of God. These are our moral and political and economic choices as

a Nation, and I hope we will change them.

Chairman NUSSLE. Thank you so much for your testimony.

[The prepared statement of Marian Wright Edelman follows:]

PREPARED STATEMENT OF MARIAN WRIGHT EDELMAN, PRESIDENT AND FOUNDER,

CHILDREN’S DEFENSE FUND

Chairman Nussle and Members of the Committee, thank you for the opportunity

to present testimony on the challenges facing working families, struggling to make

ends meet.

The Children’s Defense Fund’s (CDF) mission is to ‘‘Leave No Child Behind’’ and

to ensure every child a Healthy Start, a Head Start, a Fair Start, a Safe Start, and

a Moral Start in life and successful passage to adulthood with the help of caring

families and communities. CDF provides a strong, effective voice for all the children

of America who cannot vote, lobby, or speak for themselves. We pay particular attention to the needs of poor and minority children and those with disabilities. CDF

educates the nation about the needs of children and encourages preventive investment before they get sick, into trouble, drop out of school, or suffer family breakdown. CDF began in 1973 and is a private, nonprofit organization supported by

foundation and corporate grants and individual donations. We have never taken

government funds.

11

In less than the time it takes to read my testimony; another 14 infants will be

born into poverty in America; another 10 without health insurance; and one more

child will be neglected or abused. Every 44 seconds, a baby is born into poverty;

every minute a baby is born without health insurance; every 11 minutes, a child

is neglected or abused; and every 2 hours, 20 minutes, a child or youth is killed by

guns in America.

These facts are not acts of God. They are our moral and political choices as men

and women, as citizens and leaders. We can and must change them.

We are blessed to be living in a time of incredible opportunity and unprecedented

prosperity. Yet despite living in the world’s wealthiest, most powerful nation, millions of our children are still being left behind.

Every day, too many of our children have too little to eat and no place to sleep.

According to the U.S. Department of Agriculture, 12 million children live in ‘‘food

insecure’’ households, unable to afford adequate and nutritious food. About 3.6 million children live in households with ‘‘worst case’’ housing needs as defined by the

U.S. Department of Housing and Urban Development. These are households where

more than half their income is spent on rent or they live in severely substandard

housing. Many are working families who are simply unable to make ends meet.

Every day, parents of the nearly 11 million children without health insurance

worry about what to do when their child becomes sick. Ninety percent of these uninsured children have working parents. Uninsured children are far less likely to receive medical or dental care when they need it. They are far more likely to use hospital emergency rooms as a primary source of health care and too often fail to get

adequate follow-up care or information on preventive measures or ways to manage

chronic illnesses like asthma or diabetes.

Every week, nearly 7 million school-aged children are left alone without adult supervision or structured activities in the hours after their school day ends. While

struggling to make it in the workforce, parents constantly worry about what is happening in those hours between 3 p.m. and 7 p.m. when violent juvenile crime rates

peak and unsupervised children are more likely to be at risk of dangerous behaviors

such as smoking, drinking, sex, or crime. Millions are also left without adult supervision during the summer months.

Safe, reliable child care enables parents to work and to become self-sufficient, but

too few families have access to quality care or can afford its costs without assistance. Public funding for child care is so limited that only 12 percent of the families

eligible for Federal child care assistance receive help. Full day child care easily costs

$4,000 to $10,000 a year, and the average annual cost of child care for a 4-yearold in an urban child care center is more than the average cost of public college tuition in all but one state. Working families pay 60 percent of the costs of child care.

In contrast, for college, families on average only pay 35 percent of costs with the

government or private sector picking up 65 percent of the cost. Head Start, one of

the most successful early childhood programs, serves only three out of five eligible

preschoolers.

Our nation is at a pivotal moral and economic point as we debate what kind of

choices we will make to build a more just and compassionate society—one where no

child is left behind. We have the know-how, the experience, tools, and resources to

end child poverty and child suffering. And we have the responsibility as mothers,

fathers, grandparents, and concerned and sensible citizens to act now.

We can build a nation where families have the support they need to make it at

work and at home; where every child enters school ready to learn and leaves on the

path to a productive future; where babies are likely to be born healthy and sick children have the health care they need; where no child has to grow up in poverty;

where all children are safe in their community; and every child has a place to call

home—and all Americans can proudly say ‘‘We Leave No Child Behind.’’

MORE POOR CHILDREN LIVE IN WORKING FAMILIES

One in six children—12.1 million—live in poverty. Despite the recent (and welcome) drop in child poverty rates, children are more likely to be poor today in a time

of unprecedented wealth than they were 20 or 30 years ago. In 1999, the overall

child poverty rate was 16.9 percent; in 1979, 16.4 percent; and in 1969, 14 percent.

Seventy-eight percent of these poor children live in families where somebody

worked all or part of the time—up from 61 percent in 1993. The 1996 welfare legislation resulted in millions of families leaving welfare for work, but the supports for

these struggling families have not been adequate to ensure their fragile hold in the

workforce. Some families are better off today, but millions are not thriving and are

struggling simply to survive. What will happen to these families as the economy

12

cools down? What safety net will catch their children when welfare time limits are

reached, businesses downsize, and layoffs hit the most vulnerable workers?

CDF has, for the past 4 years, conducted a community monitoring project to learn

more about what was happening to families leaving welfare. We sought the help of

more than 180 community agencies in 16 states, who by the end of 1999 had conducted interviews with more than 5,200 individuals. A CDF report issued in December 2000, Families Struggling to Make it in the Workforce: A Post Welfare Report,

analyzed the responses of more than 2,000 parents seeking services at emergency

shelters, food pantries, and other agencies. A copy of this report is submitted for

the record. These families were among the poorest of the poor, often working but

finding that low-wage work alone is not enough to fend off hardships. Specifically,

we found that: • More than half of those who left welfare since 1996 had left for a job, but a

third no longer had a job; • Lack of child care was the reason most often reported for not working; • Nearly 60 percent of those who were working had family weekly wages below

the poverty line; and • More than half the employed parents had been unable to pay the rent, buy food,

afford medical care, or had their telephone or electric service cut off.

We also found that education was a key factor in determining how families fare

after welfare. Parents with at least a high school education were far more likely to

be employed as those without at least this basic level of education. Those without

a high school education also earned substantially less.

CDF’s findings about hardships for low-income working families have been replicated in many other studies and reports in the last several years. Many of these

studies were cited in the HHS Third Annual Report to Congress on TANF (August

2000). Most studies found that at least two-thirds of parents who left welfare

worked at some point in the year before they were surveyed, but far fewer (between

35 and 40 percent) worked all four quarters. Last week, the Economic Policy Institute released a report that found families need an income of at least twice the Federal poverty line in order to make ends meet. They found that nearly 30 percent

of the families earning less than this level experienced at least one critical hardship

such as being evicted, having utilities shut off, or not have access to medical care.

Here are some examples of families struggling to make it: • A North Carolina mother with an 11-year old daughter left welfare for a job. She worked 38 hours a week at $6 an hour and was proud to have been named employee of the month. But then she lost her housing and was living in a transitional

homeless shelter with her daughter. She had no health insurance. She earned a few

dollars more than the official poverty line but not enough to meet basic needs.

Should a parent working hard every day be unable to find a decent, stable place

to live with her child?

• Many of us read with dismay a New York Times story of a 55 year old grandmother trying to care for her four grandchildren. She struggled to deliver them

clean, fed, and in uniforms to their Manhattan public school, starting each day from

a different homeless shelter. The grandmother, who had worked at a low-wage supermarket job, had been unable to get a voucher for child care because she was not

on welfare. She tried to make ends meet by adding a shift as a hospital aide, but

when her health failed, the family began to fall further and further into a bottomless pit without a home. Should a grandparent, struggling to keep her grandchildren

together, not have the support she needs?

• I heard in Texas a mother earning $8 an hour with no health insurance describe her stressful dilemma when her daughter woke her up in the middle of the

night gasping for breath saying her inhaler was broken. The mother had to debate

whether to rush her child to the emergency room or to an all-night drugstore for

an over-the-counter remedy she prayed would work. She realized later that for

$88—the estimated cost of an emergency room visit—she was gambling with her

child’s life. Should any parent or child face this draconian choice in a rich America?

• A Colorado newspaper story profiled a young mother who lost Medicaid because

she bought a car to transport her 6-year old asthmatic daughter during the cold

winter months. Before she purchased the car, she and her daughter had to leave

home at 6:30 a.m., take light rail and then a bus to get to day care and work. In

winter, she saw her daughter getting sicker, with hospital visits every other month.

Concerned that exposing her child to the cold during their daily journey was increasing her health problems, she bought the car, not knowing that in her state acquiring an asset worth more than $1500 would mean she would lose her child’s

health insurance. Should a mother have to make this kind of choice?

Despite their best efforts, the paychecks of these families do not stretch far

enough to feed, clothe, and shelter their children. Working in low-wage jobs, these

13

parents cannot afford child care or health coverage, benefits that rarely come with

their employment. Without stable child care or transportation to get to their jobs,

they risk unemployment and further hardships for their children and families.

If low-income families leaving welfare or trying to stay off of welfare are going

to make it in the workforce, they need help. Working parents need child care, health

care, transportation, housing, and other supports to meet the basic needs of their

families. Our community monitoring report found that those families who worked

and received health coverage, child care assistance, and food stamps were more likely to maintain consistent and stable employment and were less likely to lose a job.

They were also less likely to suffer hardships like the inability to pay for food, rent,

or utilities and were much more likely to report ongoing improvements in family

well-being.

What we need to do is make the smart investments in supports for low-income

working families to enable them to lift their children out of poverty and make it

in the workforce. But we can’t do it piecemeal. Children don’t come in pieces and

the solutions to the problems low-income working families face must be addressed

comprehensively. We need to renovate the whole national house for our children—

not just the individual rooms that are in serious disrepair.

THE ACT TO LEAVE NO CHILD BEHIND

CDF has worked closely with Members of Congress and a wide range of children’s

advocates to craft legislation that combines the best ideas, policies, practices, and

approaches into one comprehensive measure, the Act to Leave No Child Behind

(H.R. 1990/S. 940). It was introduced in May by Representative George Miller (DCA) and Senator Chris Dodd (D-CT). There are currently 67 cosponsors in the

House and 7 in the Senate. The Act has already been endorsed by nearly 200 organizations. The Act would:

• Ensure health coverage for all of the 10.8 million uninsured children and for

uninsured parents

• Lift every child from poverty in the next 10 years

• End child hunger through the expansion of food programs

• Get every child ready for school through full funding of quality Head Start and

child care and funds for preschool programs

• Make sure every child can read by the fourth grade and can graduate from

school able to succeed at work and in life

• Provide every child safe, quality after-school and summer programs so that children can learn, serve, work, and stay out of trouble

• Ensure every child a place called home and decent affordable housing

• Protect all children from neglect, abuse, and violence and ensure them the

treatment they need

• Ensure families leaving welfare the supports needed to be successful in the

workplace, including health care, child care, and transportation

We could fund the entire Act to Leave No Child Behind for far less than the $1.3

trillion spent on the recently enacted tax bill. As Congress continues to debate and

revise its budget decisions, it must focus on where our national priorities lie. With

the investments needed to help hard-working families and their children or in tax

breaks for those in the highest income levels, who have benefited enormously during

the economic growth of the 1990’s; while families in lower brackets have either seen

their incomes stagnate or decline in real dollars.

OPPORTUNITIES TO INVEST IN WORKING FAMILIES AND THEIR CHILDREN RIGHT NOW

In the coming months, Congress will have the opportunity to act on a number of

key initiatives included in the Act to Leave No Child Behind that address many of

the needs of working families. CDF urges you to seize this opportunity to move forward quickly on a positive agenda to meet the urgent needs of America’s children

and families. Specific areas for immediate action include:

• Health Coverage for Uninsured Children and Their Parents and Other Pending

Health Measures. Congress included funds in the FY 2002 Budget Resolution that

would allow enactment of several important pending measures to extend health care

to uninsured children in low-income families and to many of their parents. Congress

should quickly enact the Family Care Act (H.R. 2630) and provide health coverage

for parents of children already enrolled in Medicaid and Children’s Health Insurance Program (CHIP), simplify outreach and enrollment for the CHIP and Medicaid

programs, and remove barriers such as asset tests for Medicaid coverage. Congress

should also lift the ban on covering legal immigrant children and pregnant women

under CHIP and Medicaid by passing the Legal Immigrant Children’s Health Improvement Act (H.R. 1143). In addition, Congress should enact the Family OpporVerDate 11-MAY-2000 14:28 Feb 09, 2002 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6621 H:\DOCS\HEARINGS\107-16\HBU213.000 HBUDGET1 PsN: HBUDGET1
14

tunity Act (H.R. 600), a bill with broad bipartisan support in this committee, that

will give states the option of allowing families to purchase Medicaid’s comprehensive

coverage for children with disabilities. These are important first steps toward ensuring health coverage for all of America’s nearly 11 million uninsured children.

There also are important provisions in pending patients’ bill of rights legislation

that affect health coverage for children. As the House considers this legislation, it

is essential that it contain strong enforcement provisions and pediatric protections

for children enrolled in managed care programs, like those included in the Bipartisan Patient Protection Act, H.R. 2563, and S. 1052 passed by the Senate, which include ensuring families the right to designate pediatricians as their children’s primary care providers, guaranteed access to pediatric specialists, and the use of pediatric-specific criteria in evaluating needed or appropriate care. Working families

need to know that when they have health coverage for their children, they will be

able to access needed care. Congress should guarantee these protections. • Food Stamp Provisions in the Farm Bill Reauthorization. CDF’s community

monitoring report, like other recent studies, found that many low-income working

families lose food stamp benefits as they leave welfare, although they remain eligible because of their low-level of earnings. As the House and Senate Agriculture

Committees begin developing a new farm bill, we believe it is important to include

food stamp program changes to ensure low-income families the help needed to provide adequate nutrition for their children. CDF’s community monitoring report

found that families receiving food stamps were much less likely to encounter difficulties buying food for their families.

We urge Congress to act favorably on the measures proposed in title VI of the

Act to Leave No Child Behind. These reforms include: • making it easier for low income families to continue to receive food stamps

when they leave welfare for work by allowing states to provide 6 months of transitional food stamps benefits; • making the food stamp benefit more responsive to larger families and to inflation by changing the standard deduction; • restoring food stamp eligibility for legal immigrant families including children

who arrived in the U.S. after enactment of the 1996 welfare legislation; • removing the current cap on excess shelter costs for non-elderly households; • including child support payments as part of the earned income deduction for

food stamp benefit levels; and • decreasing bureaucratic barriers to enable working families to receive food

stamp benefits. These include reducing the number of office visits, encouraging

phone, mail, or on-line verification procedures, and the use of redetermination rather than recertification requirements consistent with the approach now used for the

Medicaid, CHIP, SSI, and other means-tested programs.

The proposed changes also would revise the current quality control penalty structure to encourage states to serve all eligible families and provide incentives for

states that improve their services for working families.

• FY2002 Labor-HHS Appropriations Bill and Other Funding Issues. During its

consideration of the FY2002 Labor-HHS Appropriations Bill, Congress will be able

to make urgently needed investments in vastly underfunded children’s programs.

We urge Congress to increase funding for the Child Care and Development Block

Grant program by $1 billion in FY 2002 to provide vitally needed child care services

to 246,000 more children and provide a $1 billion increase for Head Start to move

us closer to our goal of serving all eligible children. We also urge you to increase

investments in immunizations and child protection. Child welfare programs are

funded far below the levels needed to meet the needs of troubled families and children. The President’s request for increased funding for the Promoting Safe and Stable Families Program and support for young people leaving foster care who are pursuing college or vocational training (also included in the Act to Leave No Child Behind), should be acted on promptly. Funding for the social services block grant must

also be restored.

There are many other urgent child investment issues addressed in the Act to

Leave No Child Behind that will help working families survive and thrive. Other

provisions would strengthen supports for these families through approaches such as

child support enforcement, minimum wage increases, living wage initiatives, unemployment insurance coverage reforms, and a significant number of changes to the

Temporary Assistance for Needy Families (TANF) program to help parents both

move off welfare into the workforce and lift their children out of poverty. I urge the

Committee to look closely at each title of the Act as you focus on how we address

the challenges facing working families.

Never has there been a better time to seize the mantle of leadership and build

a nation worthy of its promise for all of our children. There is no excuse. We can

15

not let the words ‘‘leave no child behind’’ become a fig leaf for unjust political and

policy choices. Children cannot eat words and phrases. They need concrete action.

It is in our hands to make sure that as America moves forward, we leave no child

behind.

Chairman NUSSLE. Dr. Haskins, welcome to the Budget Committee. We appreciate your work in the past on budget and welfare reform and we look forward to your testimony.

STATEMENT OF RON HASKINS, PH.D.

Mr. HASKINS. Thank you, Mr. Chairman. It is a great privilege

to be here today before this August committee. I recall fondly all

the years of cooperation between the Ways and Means Committee

and the Budget Committee, and I had the opportunity to work with

many of the Members sitting here today, and I greatly enjoyed

that. I consider it a privilege to be here and also a privilege to be

here with Mr. Cardin, a tremendous member of the Ways and

Means Committee who helped us produce lots of bipartisan legislation during the years that I was with the committee when the Republicans were in the Majority. And it is a special privilege to be

here with Marian Wright Edelman, who, as you say, is one of the

leaders in the children’s cause.

What I would like to do is to talk about a special group of families, namely female-headed families, most of whom have left welfare or would be eligible for welfare or in fact are eligible for welfare. This is a group of families that have experienced tremendous

changes in recent years, and I want to talk about two strands of

public policy.

I agree with Mrs. Edelman that it is possible for policy makers

to have major impacts here through two strands of public policy.

One strand is welfare and welfare reform. The 1996 welfare reforms dramatically changed our welfare system, and they made it

more demanding. There are parts of the reforms that were extremely controversial in 1996: the 5-year time limit; the strong

work requirements; the sanctions that are now in place—all of

which are now being used with great regularity by the States. They

are making some families worse off, but the major result has been

that there has been a tremendous increase in the number of people

who have left welfare. In fact, the rolls have declined by about 60

percent since 1994 ,and by about 50 percent since we passed legislation in 1996 and this is completely unprecedented.

These things you read in the news paper about hot economies

that produced reductions in the welfare caseload—if you look back

at the history of the welfare caseload—that simply is not true. The

welfare caseload has virtually never declined, and it has never declined even 3 years in a row. But we are now in the sixth year of

decline. So the authoritarian use of government power to enforce

work standards and to require a welfare system that demands

something of participants is one crucial strand.

The second, by contrast, is what I would call the work support

system, and this is outlined in some detail in my testimony. It consists of child care, Medicaid, the new State Child Health Insurance

program, food stamps, earned income tax credit, and the child tax

credit, especially now that it is partly refundable due to recent action by the Congress. Those programs are in place to help working

families avoid poverty.

16

I want the members to keep those two strands of policy in mind.

Now I want to talk about developments in the economy and among

American families since 1994. Usually the date that I am going to

talk about here in summarizing my testimony is through 1999, but

sometimes through 2000, depending on what year is available.

First, the welfare rolls are way down, as I already mentioned.

Second, employment has skyrocketed among female-headed families, particularly unmarried female-headed families; and these are

precisely the families that are most likely to go on welfare, to stay

on welfare, and to have very long spells, often exceeding 10 years.

So employment is way up.

Third, earnings are also way up, and this is extremely clear in

Census Bureau data, especially in the bottom 20 percent of femaleheaded families with children. And their earnings in some cases

have doubled over this period. So earnings are way up.

Fourth, poverty has declined dramatically, especially among

blacks. In 1997 and 1999 we had the biggest single-year declines

in black child poverty in history; and at the end of 1999, black

child poverty was the lowest ever. Furthermore, if you look at a

broader Census Bureau measure of poverty that includes the

earned income tax credit and other benefits from the work support

system, poverty declined more than twice as much in the 1990’s

than it did during the 1980’s, and that is probably because so many

more mothers were working. So it is probably the combination of

the work and the work support system that produces this big decline in poverty.

And fifth, changes in family composition at last are beginning to

occur. I want to be cautious here. I don’t want to say this is caused

by welfare reform, but we now have in at least three national data

sets since 1994 or 1995, and in the case of teen births since 1991,

there were very substantial declines in teen births, as well as in

nonmarital births; and now in recent years, an actual increase in

the percentage of American children in two-parent families.

So we have these two strands of policies and these very favorable

developments. I would say that there is almost a universal agreement that the favorable developments are caused by three factors:

One are the changes in welfare reform that I just mentioned; two

are the expansions in the work support system that both of the

previous witnesses have mentioned; and three is the American

economy, which is dramatic and wonderful. Even wages at the bottom—among the bottom 25 percent of female-headed families—are

now increasing.

So it is those three factors, and we could argue about the proportion attributable to each, but here is the major point that I would

make to this committee. This committee and other committees in

Congress should make sure that those two strands of public policy

continue to function. While I feel we have less control over the

economy, welfare reform and the work support system were created

by policymakers, and it is those two strands that are helping

produce this remarkable progress.

There are issues, to be sure. The most important is, I think, to

maintain TANF funding. There will be great temptation in Congress next year, and there might be a member or two of this committee who will try to cut the TANF block grant because the rolls

17

are down. I feel that would be a serious mistake. The States have

a lot more to do, as Mr. Cardin pointed out.

Second, there are families that are actually worse off. They are

floundering because they have not been able to meet welfare requirements. We should find out ways to help those families. As

Marian Wright Edelman said, the food stamp and Medicaid programs are not working as they should. It might not cost more

money, but we definitely need to look into why those programs are

not functioning as they should.

And finally, I think the States have not been as aggressive as

they could be in family formation issues, particularly trying to reduce nonmarital births and to promote marriage. So this is an

agenda worthy of every committee in Congress.

The conclusion that we should draw is we are on the right track.

We should keep going in the direction we are going, with modest

additional investments.

Thank you, Mr. Chairman.

[The prepared statement of Ron Haskins follows:]

PREPARED STATEMENT OF RON HASKINS, SENIOR FELLOW, BROOKINGS INSTITUTION

Chairman Nussle, Ranking Member Spratt, and Members of the Committee on

the Budget, my name is Ron Haskins. I am a Senior Fellow at the Brookings Institution in Washington, DC and a Senior Consultant at the Annie E. Casey Foundation in Baltimore. Until January of this year, I was a staffer with the Committee

on Ways and Means where I had the great privilege of working on the seminal welfare reform law of 1996. Thus, it is a great privilege to appear before you today to

discuss the effects of this mighty piece of legislation on working families.

Figure 1 provides extensive information about the effects of the 1996 reforms. The

graphs in Figure 1 show, respectively, that the rolls of the Temporary Assistance

for Needy Families (TANF) block grant and its predecessor program (Aid to Families with Dependent Children; AFDC) have declined by nearly 60 percent and that

there has been a huge increase in the number of single mothers who work. The increase in working mothers has been especially impressive among never-married

mothers; these mothers exhibited a 40 percent jump in employment in just the 3

years leading up to 1999. This spectacular rise in employment is especially important because in the past never-married mothers were the least likely to complete

high school or to have job experience and the most likely both to go on welfare and

to stay on welfare for long spells. The figure also shows that child poverty has declined greatly both as measured by the official Census Bureau measure of poverty

and by a broader poverty measure that takes into account more public benefits including the Earned Income Tax Credit and food stamps. Finally, the figure shows

that by 1999 poverty among all female-headed families and among black femaleheaded families was the lowest it has ever been.

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Figure 2 provides additional information on poverty. The first panel shows that

as the welfare rolls declined so dramatically every year between 1995 and 1999,

both overall child poverty and poverty among black children also declined every

year. In fact, the declines in black child poverty in both 1997 and 1999 are the biggest single year declines in history and by the end of 1999 black child poverty was

the lowest ever. It is useful to reflect on the patterns depicted in this panel. At the

same time that the nation is experiencing the greatest declines in the welfare rolls

in history, child poverty is also declining more than at any time since the 1960’s.

In fact, as the second panel in Figure 2 shows, under a broad Census Bureau measure, child poverty declined more than twice as much during the economic expansion

of the 1990’s than it declined during the expansion of the 1980’s. Both the 1980’s

and the 1990’s expansions generated a net increase of about 19 million jobs, but the

expansion of the 1990’s was accompanied by a much greater decline in child poverty.

The reason is simple. In the 1980’s, single mothers stayed on welfare and did not

take advantage of the growing economy. In fact, during the expansion of the 1980’s

the welfare rolls actually grew by over 10 percent. By contrast, as we have seen,

in the 1990’s about two million mothers left welfare or avoided welfare altogether

and most of them found jobs. Obviously, only when mothers join the economy can

they take advantage of economic opportunity. The third panel in Figure 2 shows

that even deep poverty (poverty at half the official poverty level or about $7,300 for

a family of three in 2001) has fallen dramatically.

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Changes in welfare receipt, work, income, and poverty are not the only possible

effects of the 1996 reforms. Unlike previous welfare reform legislation, the 1996 reforms aimed specifically at decreasing the number of children born outside marriage

and increasing the formation of two-parent families. In creating the TANF block

grant, Congress formulated four goals that states should use the block grant funds

to achieve. One of these, of course, was to provide cash assistance to destitute families. But an explicit goal of the legislation was to reduce welfare dependency both

by increasing work and by increasing marriage. In fact, three of the four TANF

goals addressed issues of family formation.

The data shown in Figure 3 provide some evidence that an exceptionally important shift in nonmarital births and family living arrangements is now beginning to

occur. The top panel shows that after more than a half century of increases, the

number of births outside marriage, the nonmarital birth rate per 1,000 unmarried

women, and the percentage of all children born outside marriage leveled off in about

1995. Part of the explanation for this felicitous result is found in the second panel

of Figure 3. Due in part to widespread recognition that teen pregnancy is harmful

to both the adolescent mother and her child, as well as to federal, state, and local

policies aimed at reversing the tide of teen births, the nation is now in the midst

of a decade of progress in reducing teen births. Equally impressive, the third panel

of Figure 3 shows the most recent and perhaps the most hopeful of the increasingly

positive trends in nonmarital births and family formation. This trend, based on national data from the Census Bureau, shows that the percentage of children under

age 6 living with their married mother halted its 30-year decline in 1995 and has

increased every year but one since then (Bavier, 2001). Similar results have been

reported recently from another national survey being conducted by the Urban Institute in Washington, DC (Acs & Nelson, 2001).

It is necessary to avoid overclaiming for the effect of the 1996 reforms on these

very positive developments in family formation. However, there are several reasons

to believe that welfare reform may be playing at least some role in these historic

shifts. First, even though many of these developments in family formation began before the Federal reforms were enacted in 1996, by that time a welfare reform movement in the states was well underway. By 1994, half the states had mounted welfare reform demonstration programs under waivers from Federal law, an approach

to reform that was initiated by the Reagan Administration and had been picking

up speed during the Bush and Clinton Administrations. Many of the state demonstration programs involved mandatory work reforms that were similar to those

later required by the 1996 Federal reforms.

The mandatory work requirements of state and Federal legislation are designed

in part to discourage nonmarital births and to encourage marriage. By requiring

most mothers to work shortly after joining welfare, and by limiting cash benefits

for most recipients to 5 years, mothers are forced to realize that they cannot depend

on permanent welfare benefits like they could under the old AFDC program when

millions of mothers stayed on welfare for more than a decade. Once mothers understand that they cannot permanently depend on welfare, they begin to realize that

they must have other sources of income. The major means of achieving income for

most of these mothers is work. However, marriage can also increase the mother’s

income if she marries a man who is employed. The data in the last panel of Figure

3 suggest that a growing number of poor and low-income mothers are taking the

course of marriage.

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Again, these trends must be watched closely and Congress would be well advised

to carefully review these and other data on family composition as part of the welfare

reform reauthorization debate that will take place next year. Given the encouraging

data on family formation, it seems wise for Congress to consider additional actions

that might be taken to provide even more movement away from births outside marriage and toward marriage and parenting by both biological mothers and fathers.

Regardless of the interpretation one gives to the data on nonmarital births and

family formation, virtually no one doubts that welfare reform is playing a major role

in the substantial increases in employment and declines in child poverty shown in

Figures 1 and 2. Why have the welfare rolls and poverty declined while work increased so much in recent years? Nearly every analyst agrees that the answer involves three factors that have combined to produce these exceptionally favorable

changes. The three factors are the welfare reform movement that swept the states

and the Federal Government in the early- and mid-1990’s, the growth of a Federal

system of benefits for working families, and a strong economy. Scholars do not agree

about the relative importance of these factors, nor will they ever (Blank and

Schmidt, 2001). But no one disputes the claim that two of the factors were produced

by deliberate decisions of policymakers at the Federal and state level. I hardly need

to tell members of this Committee about the historic Federal welfare reform legislation of 1996. After a partisan and even somewhat rancorous debate, Congress approved the 1996 welfare reform legislation with a bigger bipartisan majority than

the bipartisan majority that enacted Medicaid in 1965. Let’s be clear, the 1996 reforms were highly bipartisan and were signed by a Democratic President who had

campaigned on the promise to ‘‘end welfare as we know it.’’

But less well known than the famous 1996 reform legislation is the work support

system that Congress has created with dozens of legislative initiatives spanning

more than a quarter century. The work support system consists of a variety of programs that provide benefits to poor and low-income working families. By definition,

any program that provides benefits to working families is part of the work support

system, but I would emphasize seven programs (see Figure 4) that now provide extensive help to working families. These include child care, Medicaid and the relatively new State Child Health Insurance Program (SCHIP), food stamps and child

nutrition, the earned income tax credit (EITC), the child tax credit, and housing programs. As a recent study from the Congressional Budget Office (CBO, 1998) shows,

owing mainly to legislative expansions of these programs since roughly the mid1980’s Federal spending on working poor and low-income families has increased

greatly in recent years. The CBO analysis reveals that if Congress had not made

statutory changes to expand the work support programs since 1985, in 1999 the

Federal Government would have spent a mere $6 billion to support poor and lowincome working families. However, taking into account all the expansions (plus the

child tax credit and the SCHIP program which are new), CBO estimated that the

Federal Government would spend nearly $52 billion on working families in 1999.

This projection of $52 billion was almost surely an underestimate of the amount actually spent to help working families in 1999 because so many more mothers left

welfare than was predicted, thereby greatly increasing EITC spending. In addition,

the CBO study examined only entitlement spending which does not include some

child care programs, housing, and several other benefits.

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To gain a more complete understanding of the work support system and how it

has grown, consider child care, Medicaid, and the EITC, three of its major components. In 1993, across all child care programs including Head Start, the Federal

Government spent about $9.5 billion. By 2000, the total Federal dollars available

for child care had exploded to around $18 billion, nearly twice as much as just 7

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years earlier. The two major reasons for this increase were that in the 1996 welfare

reform law, Congress included an additional $4.5 billion over 6 years in money for

the child care block grant. Further, Congress allowed states to spend TANF dollars

on child care either directly out of the TANF block grant or by transferring up to

30 percent of their TANF funds into the child care block grant. Thus, Congress gave

states both increased funding of programs designed specifically for child care as well

as the flexibility to use TANF funds for child care. As a result, there is general

agreement that states have been able to meet all the demand for child care of families still on TANF as well as provide TANF-supported child care for a period of time,

usually at least 1 year, after families leave TANF (Besharov & Samari, 2001).

Changes in Medicaid are equally impressive. It might be argued that one of the

original sins of American health care policy for the poor was that the only way to

gain entrance to Medicaid was through either the AFDC or the Supplemental Security Income (SSI) programs. In other words, to obtain Federal support for health

care, a family had to go on welfare. This approach to rationing Federal support for

health care was never a good idea. But as Congress and the American people became more and more concerned about welfare dependency, maintaining a Medicaid

system that literally required a family to go on welfare before its members could

receive help became unsustainable. Beginning in the mid-1980’s, Congress enacted

a series of reforms, designed primarily by Henry Waxman, that expanded eligibility

for Medicaid to people, especially children, outside the AFDC and SSI programs.

These coverages were gradually expanded until the 1996 welfare reform law completely separated eligibility for the TANF program from Medicaid eligibility. Now

nearly all children who live in families with incomes under the Federal poverty level

($14,630 for a family of three in 2001), and many children who live in families with

much greater income, are eligible for Medicaid health insurance. Moreover, in 1997

Congress and President Clinton created the SCHIP program that offers coverage to

children above the Medicaid eligibility level. In fact, because of the SCHIP rules for

handling work disregards, some states are providing coverage to children in families

with incomes in excess of $35,000.

The EITC shows the same pattern as child care and Medicaid; namely, large increases in both total spending and in the number of families receiving benefits. In

1984, about 7 million families received an average credit of about $260; total Federal spending was $1.6 billion. By 1999, after Congress expanded the credit in 1986,

1990, and 1993, usually on a bipartisan basis, about 18 million families received an

average credit of $1,700 at a total Federal cost of $31 billion.

It would be difficult to exaggerate the importance of the combined effect of the

1996 welfare reform legislation and the expansion of the work support system by

Congress and several presidents. Through repeated legislative action involving a

broad array of programs and though its approval of substantial increases in spending, Congress has shown a deep commitment to changing the rules of the game for

low-income families. In the old days, welfare often provided a better deal than lowwage work. Now Congress has substantially restricted welfare use and greatly increased the returns to low-wage work. As a recent study by the Urban Institute in

Washington, DC shows, in most states mothers who take a minimum-wage job and

work half-time are better off financially than they would be on welfare (Coe and others, 2001).

This system of limited welfare and expansive public support for low-wage work

is the best approach the Federal Government has yet found for both reducing welfare dependency and fighting poverty. Taken together, these two sets of changes

constitute a revolution in Federal policy toward poor and low-income families.

There is, of course, no public policy that works flawlessly. Thus, it is not surprising that this new approach to fighting dependency and poverty has been shown to

have some problems (Haskins and Blank, 2001). Four of the problems are especially

notable and should be a major focus of discussion during the welfare reform reauthorization debate in Congress next year. All four could raise issues for the Budget

Committee and for next year’s budget resolution.

The first problem is one that seems solvable. Because Congress has so carefully

constructed the work support system described above, it is disappointing to find that

two vital parts of the system are not working well. Families leaving welfare or lowincome families that avoid welfare are not receiving the Medicaid and food stamp

benefits for which they qualify. After several years of increases, administrative data

for both programs show declines in enrollment of either families with children or

without children. In Medicaid, for example, national data show that the number of

children enrolled declined between 1995 and 1998 (Herz & Baumrucker, 2001). A

recent national study of families leaving welfare found that only about 40 percent

of families eligible for food stamps actually received the benefit (Zedlewski, 2001).

It hardly seems necessary to emphasize how important these two benefits are to

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poor and low-income families and how essential they are to creating an effective national work support system. Thus, Congress and the states should carefully review

the caseload declines and determine whether changes are called for in statutes, regulations, or administrative procedures. It would appear that part of the food stamp

problem could be solved by changes in the Federal quality control system which provides an incentive for states to be less than aggressive in ensuring that working

families receive food stamps (Haskins, 2001). With regard to Medicaid, as testimony

before the Committee on Ways and Means last year demonstrated, states such as

Florida, Oklahoma, and Ohio that took aggressive administrative action had substantial increases in the number of children and families receiving coverage (Committee, 2000). The major thrust of administrative action in these states seems to

have been measures designed to ensure that families knew they were eligible and

that made it as easy as possible for working families to apply for and maintain their

eligibility. Florida, for example, changed its procedures so that families could apply

for and maintain their eligibility entirely over the phone.

A second important problem is that some families are worse off as a result of welfare reform. Although the children’s poverty rate has declined substantially, some

families appear, nonetheless, to be falling through the cracks. Wendell Primus

(2001) of the Center on Budget and Policy Priorities in Washington, DC, based on

national data from the Current Population Survey, estimates that as many as

700,000 families with children have less income in 1999 than in 1995. Not all of

this increase should be attributed to welfare reform. Even so, it seems clear that

the 1996 reforms have led to declines in income for some families. Under the AFDC

program, mothers could and often did stay on welfare for long spells. Indeed, Bane

and Ellwood (1983) showed that up to 65 percent of the families on the rolls at a

given time would eventually be on the rolls for 8 years or more. But the TANF program that replaced AFDC has serious restrictions on length of spells. The Federal

5-year time limit provides incentive for families to get off welfare as soon as possible. Many states have adopted time limits that are even shorter than the Federal

5-year limit; some families in these states have already hit the state time limit and

have left welfare. State policy on sanctions is probably even more important than

time limits in causing families to leave welfare (Pavetti and Bloom, 2001). More

than 35 states have sanction policies that result in complete termination of cash

welfare benefits. The point is that whereas families could stay indefinitely on AFDC,

they must meet TANF requirements or have their benefits reduced or terminated.

Congress may want to use the reauthorization debate to review what actions states

are taking to help these families and to determine whether they can return to welfare once they fulfill whatever requirement resulted in their sanction. Similarly,

Congress may want to determine whether states are prevented from helping families that reach the 5-year time limit because Federal policy allows a maximum of

20 percent of the state caseload to be exempt from the time limit.

The next two issues are not so much problems as they are opportunities that need

to be further exploited. The first of these is the family formation goal of the 1996

reforms. Although the number and percentage of children born outside wedlock has

leveled off and the number of children living with two biological parents has increased slightly, research shows that states have not been very aggressive in designing and mounting programs to reduce nonmarital births or increase marriage (Gais

and others, 2001). There is every reason to believe that state and local programs

designed to increase marriage and reduce nonmarital births would produce even

greater success. Especially important would be programs that offer services to young

couples at the time of a nonmarital birth. Recent research shows that about half

of these couples live together and a total of more than 80 percent describe themselves as being in a mutually monogamous relationship (McLanahan, 1999). However, research also shows that the majority of these relationships fall apart within

a year or two (Rangarajan and Gleason, 1998). Thus, job training and employment

assistance, counseling, and other services may prove beneficial at the time of the

birth when the parents are committed to each other and their baby. A major goal

of these programs should be helping fathers find jobs or acquire skills to qualify for

better jobs.

The second issue is that many, perhaps most, of the mothers leaving welfare take

low-wage jobs. Both experience and research show that mothers now working in

low-wage jobs can, with proper assistance, move up the job ladder. However, as

Gary Burtless (1995) of the Brookings Institution has shown, most mothers will not

improve their income without external assistance. If Congress wants to help these

mothers improve their income, there is probably no choice except to find ways to

help them acquire more training and education. The Congressional debate on this

issue may be somewhat misleading because members may simply assert that if education and training are made available, all will be well. But this claim is false.

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Two education and training strategies make sense at this point. First, states and

localities should mount programs in which they cooperate with low-wage workers

and educational institutions to arrange courses that lead to specialized short-term

training or even 2-year degrees. It is essential that the training be relevant to employment available in the local economy. Educational institutions, especially junior

and community colleges, must be flexible in the length of courses and the times at

which they are offered in order to meet the needs of single working parents.

The second strategy is to work with employers to identify the types of training

that are required for low-wage workers to advance in their organization. Some programs of this type already exist, but many more are needed. Employers in need of

skilled workers are often agreeable to arrangements of this sort and may even pay

at least part of the training costs and grant their workers released time for training.

In some cases, it may prove possible to work with both employers, who can identify

the types of training and the skills required for advancement, and with local postsecondary institutions that can provide the training.

The 1996 welfare reforms, in combination with expansions of the work support

system over the past quarter century, are now providing a solid basis for using public policy to simultaneously minimize welfare dependency, increase employment, and

reduce poverty. Although it is too early to make any definitive claims, it appears

that these policies are also associated with stable or slightly declining rates of nonmarital births and are having a positive impact on family formation. Given these

achievements, it would be a serious mistake for Congress to make big changes in

either welfare reform or the work support system at this point. Especially if Congress wants states to tackle the remaining problems and thereby produce even more

progress against welfare dependency, poverty, and family dissolution, it would be a

grave mistake to reduce funding for the TANF block grant. Federal welfare and

work support policies are producing great success. There is every reason to believe

that if allowed to continue with only minor adjustments and modest additional investments, they will produce even more growth in employment and income and

greater declines in welfare dependency and poverty in the years ahead.

REFERENCES

Acs, Gregory, and Sandi Nelson. 2001. ‘‘Honey, I’m Home.’’ Changes in Living Arrangements in the Late 1990’s (Series B, No. B-38). Washington, DC: Urban Institute.

Bane, Mary Jo, and David T. Ellwood. 1983, September. Slipping Into and Out of

Poverty: The Dynamics of Spells (Working Paper No. 1199). Cambridge, MA:

National Bureau of Economic Research.

Bavier, Richard. 2001. Recent Increases in the Share of Young Children Living with

Married Mothers (Unpublished Manuscript). Washington, DC: Office of Management and Budget.

Besharov, Douglas J., and Nazanin Samari. 2001. ‘‘Child Care after Welfare Reform’’ In The New World of Welfare, edited by Rebecca M. Blank and Ron

Haskins. Washington, DC: Brookings.

Blank, Rebecca M., and Lucie Schmidt. 2001. ‘‘Work and Wages’’ In The New World

of Welfare, edited by Rebecca M. Blank and Ron Haskins. Washington, DC:

Brookings.

Burtless, Gary. 1995. ‘‘Employment Prospects of Welfare Recipients.’’ In The Work

Alternative: Welfare Reform and the Realities of the Job Market, edited by Demetra

Smith Nightingale and Robert H. Haveman. Washington, DC: Urban Institute.

Congressional Budget Office. 1999. Policy Changes Affecting Mandatory Spending

for Low-Income Families Not Receiving Cash Welfare. Washington, DC: Author.

Coe, Norma B., Gregory Acs, Robert I. Lerman, and Keith Watson. 1999. Does Work

Pay? A Summary of the Work Incentives under TANF (Series A, No. A-28).

Washington, DC: Urban Institute.

Winstead, Don. 2000, May 16. Health Coverage for Families Leaving Welfare, Hearing Before the Subcommittee on Human Resources of the Committee on Ways

and Means, 106th Cong., 1st sess. U.S. Government Printing Office.

Gais, Thomas L., Richard P. Nathan, Irene Lurie, and Thomas Kaplan. 2001. ‘‘The

Implementation of the Personal Responsibility Act of 1996: Commonalities,

Variations, and the Challenge of Complexity’’ In The New World of Welfare,

edited by Rebecca M. Blank and Ron Haskins. Washington, DC: Brookings.

Haskins, Ron. 2001, June 28. Child Support and Fatherhood Proposals, Hearing before the Subcommittee on Human Resources of the Committee on Ways and

Means, 107th Cong., 1st sess. U.S. Government Printing Office.

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Haskins, Ron, and Rebecca M. Blank. 2001. ‘‘Five Years After Welfare Reform: An

Agenda for Reauthorization’’ In The New World of Welfare, edited by Rebecca

M. Blank and Ron Haskins. Washington, DC: Brookings.

Herz, Elicia, and Evelyne Parizek Baumrucker. 2001, January 8. Reaching Low-Income, Uninsured Children: Are Medicaid and SCHIP Doing the Job? (RL30556).

Washington, DC: Congressional Research Service.

McLanahan, Sara and others. 1999. Unwed Parents or Fragile Families?: Implications

for Welfare and Child Support Policy. Princeton University.

Pavetti, LaDonna, and Dan Bloom. 2001. ‘‘Sanctions and Time Limits: State Policies, Their Implementation and Outcomes for Families’’ In The New World of

Welfare, edited by Rebecca M. Blank and Ron Haskins. Washington, DC: Brookings.

Primus, Wendell. 2001. Comment on: ‘‘Effects of Welfare Reform on Family Income

and Poverty’’ by Ron Haskins. In The New World of Welfare, edited by Rebbeca

M. Blank and Ron Haskins. Washington, DC: Brookings.

Rangarajan, A., and P. Gleason 1998. ‘‘Young unwed fathers of AFDC children: Do

they provide support?’’ Demography, 35 (2), 175-186.

Zedlewski, Sheila. 2001. Former Welfare Families and the Food Stamp Program:

The Exodus Continues (Series B, No. B-33). Washington, DC: Urban Institute.

Chairman NUSSLE. Thank you, Dr. Haskins. I have questions,

but I will invite Mrs. Clayton to go first.

Mrs. CLAYTON. Thank you very much.

Dr. Haskins, let me start with you. There is, I guess, a CBO report that I don’t have before me but I am sure you are familiar

with. In spite of those elements of policy that you speak about, and

in spite of the economic well-being or well-performing economy, at

least until the last few months, that there is a greater disparity

growing still. In spite of the structure of welfare, I would suggest

to you that welfare reform has resulted in a positive reduction of

people on welfare, and that is good.

That is not to say that in so doing, we have reduced the level

of poverty, or work force programs that you cited that have aided

as we thought they would have, in supplementing the transition

from welfare to work—i.e., food stamp or sufficient child care; or

indeed, in spite of the good program that CHIP is, in aiding families to make that transition.

Now, I am sure you would say that people are not coming back

because they don’t have the program. I think the enforcement part

is working. I think the States are doing that. What I am fearful

of is the assumption. If I can get you to comment—if I am wrong,

would you help me clarify. The assumption of your report is, everything is going OK. Stay on course. Make sure we reauthorize

TANF, and not do things to enhance the effectiveness of the programs that Congress put in place to do. For example, in addition

to removing people from welfare, it is our responsibility to remove

them out of poverty. Part of the concern is not to have people dependent on government when they can do for themselves. That

should happen.

The other part is that as a country of conscience, we want to

speak to people who are in poverty. So would you comment on

that? Did I misunderstand you?

Mr. HASKINS. Yes. I just want to emphasize again the main point

of my testimony, which is the combination of the demanding nature

of the welfare system, that is almost completely new and has resulted in literally millions of mothers leaving welfare, and at least

60 percent are employed at any given moment, and 80 percent over

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a period of time, so they are doing exactly what Congress and the

States wanted them to do.

Then, secondly, this work support system that does in fact—we

can see this in the Census Bureau data, we don’t have to guess.

Their incomes are dramatically supplemented by the work support

system.

But what you point out about the work support system not being

perfectly effective and in fact, having some serious problems is correct. I totally agree with that, and I have not ever written a report

that diminishes those problems. They are important problems.

There are two things especially that the Congress can do that I

think would have an immediate and powerful impact on the level

of poverty in the country. The first is to fix the food stamp program. Most of these families are eligible for about $2,000 in food

stamps, and only 40 percent of the mothers who have left welfare

and are still eligible for food stamps get them. There are lots of

technical reasons.

I know you are on the Agriculture Committee. I testified and

gave several good reasons in my testimony. The biggest of all, I

think, has to do with the quality control system. There need to be

fundamental changes in the quality control system, and I think

many more of these families would then get their food stamps. The second is that we could provide $3 billion in cash paid by

fathers to these families—female-headed, low-income families—

through the child support system, if we would pass—or what we

really need to do is get the Senate to pass the action the House

took last year. The House passed legislation to do this by a vote

of 405 to 18 last year, and the Senate refused to take it up. So

those are two actions we could take this year or next year that

would have an immediate and substantial impact on child poverty.

Mrs. CLAYTON. Let me just get any member of the panel, or all.

There is an article in today’s paper that comes, I think, from the

Washington Times on the pending reform of the TANF, the welfare

reform. They have several myths, and I am just going to cite the

first one.

Myth number one: Welfare reform has reduced poverty by putting poor women to work. Over the past 5 years, a lot of poor

women have left welfare, added wage-paying employment to the

work that they do at home. But two points about this fact should

be kept in mind. First, increased work participation owes a lot to

a tighter labor market, high wages, and earned income tax credit.

Welfare reform is only part of the story.

Mr. CARDIN. I think we have all agreed that welfare reform was

a part. The economy has played a major part. I want to underscore

a point that Dr. Haskins has made about the fact that we have a

continuing role. You are absolutely right. We know we have got to

keep people off of cash assistance. We are not sure we have been

as successful in getting people in the work force and being successful in the work force. We don’t have enough information to know

that from the information available.

I want to correct one statement. The number of people that are

receiving assistance under TANF is actually increasing; it is not

declining. The number of people on cash assistance has declined

dramatically, but the number of people receiving services under

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TANF is increasing, and that is the way it needs to be. So the Federal role is still extremely important, and you are absolutely correct. We know for sure that the number of people receiving cash

assistance has declined. We know the overall poverty rate has declined. We think a lot of that has to do with the economy and the

other tools we have put into place, but we have not been as successful in making sure that people are out of poverty that are leaving welfare.

Ms. EDELMAN. I would make just one other very brief comment

in response to welfare reform. I think the jury is still out in terms

of its impact, and the key will depend on the kind of investments

you make in housing and food stamps and other supports that

working parents need.

Second, while there has been some decline in child poverty, I

don’t think we should be proud that there are 12 million poor children after 8 years of unprecedented prosperity in the richest nation

on earth, and that 78 percent of them live in a household where

someone works.

The child poverty rates, despite our modest progress over the last

few years, are higher than they were in 1969 and in 1979, and we

are richer than we have ever been.

And, third, you know, we should not be making modest investments in our children. We know about the effective investment of

prevention. We should be making significant investments in our

children. And we did not make a modest tax cut. That is why we

need to talk about having a comprehensive investment in making

sure that child care, Head Start, education, and health care are

available. So we should talk about how we take care of our children

at this rich time in our history.

Chairman NUSSLE. That is where I would like to pick up the

questioning, because I think oftentimes on our committee we talk

so much of numbers, and I am sorry about that. Unfortunately,

that is the role of the Budget Committee, to talk numbers, to talk

percentages, and I am certainly pleased and I know you are all

pleased, and hopefully the Nation is pleased, that we have the kind

of decline in our welfare rolls that we have seen. I think that is

good news.

The untold story about that, unfortunately—and that is the reason I was so interested in holding this hearing—is that while it is

great that there is 60 percent that have been reduced, it means the

other 40 percent have not, and they are still stuck for some reason.

And exploring that is the reason for this hearing.

A couple of things I would just like to ask, first on housekeeping.

Ben, you asked the question about safe and stable families and the

TANF supplemental grant as well as future issues. I am interested

in working with you on that. It may require a waiver at the Rules

Committee as an example. I am willing to help work with you to

figure out whether we should consider that. I understand because

of the way the outlays were used in Ways and Means this year that

in fact we may—but I will be happy and the Budget Committee

will be happy to work with you.

Mr. CARDIN. Thank you. The safe and stable families expires October 1, so we need to act quickly on that.

30

Chairman NUSSLE. As you know, we put that in the budget for

a reason. We felt that was an important priority, and even though

there may be a technicality on how the Ways and Means Committee worked on their outlays this year, we will work with you to see

if we can’t figure that out.

Mr. CARDIN. Thank you, Mr. Chairman.

Chairman NUSSLE. I would suggest, as well, that my message on

TANF—having been on the subcommittee when we came up with

that, when we wrote the welfare reform bill and legislation that

has had some success—my message to the administration is that

does need to continue, Dr. Haskins. I don’t believe that we are yet

ready to claim total success until we can erase that face that is

looking at me up there, especially of the first one there, of the child

that is hungry. That one disturbs me probably most of all.

You mentioned that the three components, Dr. Haskins, that

have got us to the point of success are, number one, some success,

good success, is welfare reform; number two, expanding the work

support system; and, third, economic growth and the strong economy. Those different levels are, in part, the reason for the success

that we have seen so far.

One of the things that I remember when we debated this bill in

subcommittee and you helped guide us through that process, is we

had a system where one size fits all. The reason that we moved to

the system is we recognized that one size does not fit all. Everybody needs a little bit different size and flexibility.

I would ask this for all three of you. I know you have put it into

your longer testimony, but could you boil it down for me? What is

next? What do we need to do next in order to meet the needs of

the many who are still stuck? We celebrate the ones who have been

able to escape, and that is good news; but there are still those that

are stuck. And particularly what I think we tried to debate during

the welfare reform is that it is not just dollars; it may be policy

changes as well. Just throwing money at it is what we did, arguably, for 25, 30, 40 years since the war on poverty of the sixties.

That didn’t seem to do enough; we needed, policy changes.

So the question is, are there policy changes that we need to

make? Are there financial investments that we need to make?

What is your advice, from all three of you, as we go into reauthorization of TANF and food stamps and other very important programs?

Why don’t I start with you, Ben, and we will work down the

aisle.

Mr. CARDIN. First let me say I agree with Dr. Haskins. I think

we should stay on course, and I think the basic bill passed in 1996

should be continued and the funds should be adjusted for the additional cost of inflation, and we should continue our commitment to

allow the States the flexibility they need to address the problem.

I think we should amend that bill to remove the disincentives for

work. There are several provisions in the bill that actually work as

a disincentive for the State getting a person in work and still providing any assistance.

Third, as Dr. Haskins pointed out, the pass-through in child support would be a major help to bring families together. It has passed

31

the House. It is a bipartisan bill. We need to get it through the

Senate.

And then, lastly, I would mention the issue of child care. We are

not providing enough resources for child care. It is a huge problem

for those who remain on the welfare rolls. It provides safe and affordable child care for American families. We have to make a larger

investment here in Washington.

Chairman NUSSLE. Thank you. Ms. Edelman.

Ms. EDELMAN. We have laid it out in the written testimony, but

the first thing is, are we making a commitment as a country that

our goal is to end child poverty, not just to end welfare, and take

the measures that we know that support work? Child care support

needs to be available for those who are working, health coverage

for working families and transportation, are all laid out in the Act

to Leave No Child Behind, as well as work expense allowances,

more child support dollars, low-cost housing.

But, again, children don’t come in pieces. They need a range of

supports to their families in order to escape poverty: better wages,

earned income tax credit expansions. The child tax credit that you

voted as part of the tax bill we would like to see fully refundable.

It would help make an enormous impact. Food stamp reforms that

we are talking about here so that we can take steps forward to alleviate hunger. Better wages.

And so we have laid this out in a coherent vision in the Act to

Leave No Child Behind, and I hope you will support it. But I want

to come back to the point that children don’t come in pieces. Families need a coherent set of policies and a commitment to providing

supports and the skills—including education and training—that

they will need to become self-sufficient. But it is going to require

profound culture change at both the Federal and State level. We

have laid it out in a 1,200-page bill, and a section of that addresses

steps that we can take to end child and family poverty and it also

presents our position on TANF reauthorization.

Chairman NUSSLE. Dr. Haskins.

Mr. HASKINS. I think there is almost no question that the number one thing we could do to have the biggest impact on poverty

is to promote marriage. There is no question that over the last 30

years the single biggest cause of child poverty and increases of

child poverty has been the dissolution of American families. At last,

since 1994 and 1995, we are beginning to make progress. It is not

clear what role the government can play, so I would not recommend big investments.

We should remove disincentives for marriage from the earned income tax credit and all other programs, but we should also encourage experimentation by the States. There are in fact many States

that are changing their laws and are instituting programs to help

families move toward marriage. I will give you one example. We

now know that for children born outside of marriage in big cities

in the United States, 50 percent of the parents live together at the

time of the birth, and an additional 30 percent, for a total of 80

percent, say that they are in a committed monogamous relationship.

Now, they love each other. They love the child. If we could give

them help at that moment, especially the fathers in their income

32

and employment, I think it could have a major impact on marriage.

And if the couple stays married, the statistics are that the child

will virtually never live in poverty.

The second thing—which we have mentioned several times—is

the child support enforcement reform which would directly put

about $3 billion in these families’ hands over a 5-year period. The

House already did it. We should convince the Senate to do it. Third is the food stamps. Again, $2,000 for these families would

immediately bring several hundred thousand of them above the

poverty line. And keep in mind, we don’t have to change the statute on the food stamp benefit. It is an open-ended entitlement. We

just need to figure out how to get States to be more effective in

making sure that families that are eligible actually get it.

Fourth, I already mentioned floundering families. I think that is

a very important issue. We should not forget these families. We

should focus on these families. We have very poor interventions

now. I think it is more like 20 percent than 50 percent. But we

should learn how to help these families.

And, finally, this is way too complicated to talk about in any detail, but I think our Nation’s employment support system, the U.S.

Employment Service, the Job Training, what used to be the Job

Training Partnership Act, now the WIA, Workforce Investment Act,

and TANF all need to work together. There are a few places where

that is happening but it is not happening very well. That could also

have major impacts on our unemployment insurance program. So

those are the five leading candidates on my list.

Mr. CARDIN. Could I just have one last comment?

Chairman NUSSLE. Yes, please.

Mr. CARDIN. Dr. Haskins mentioned several objectives that are

in the core program of TANF and we give bonuses for it, including

promoting marriage. What we don’t have as a core objective in

TANF is reducing poverty, and I think we should amend the statute to make reduction of poverty a core objective of TANF, offering

bonuses to our States that achieve results in those areas.

Ms. EDELMAN. I support that.

Chairman NUSSLE. Thank you, all of three of you. Mr.

McDermott.

Mr. MCDERMOTT. Thank you, Mr. Chairman. I would like to shift

the focus a little off food and get to housing. I assume this House

budget material from the Democratic Caucus has been available to

the Republicans, but it has some fascinating statistics in it and—

yes, I know they are top secret. Things like the Low-Income Housing Coalition, which I suppose maybe the Republican staff didn’t

look at, but the fact is that I voted against TANF because I could

see what was going to happen. I remember when we emptied the

mental hospitals and suddenly people couldn’t figure out where all

the people came from who were lying around in the streets. And

I want to assume for a second that housing prices are so far out

of line for most people, they estimate that the rent in San Jose for

a two-bedroom apartment is $1,308, and that means you have to

have weekly hours, at minimum wage, of 175 hours to pay for that.

Now, when you start thinking in those terms, you can see that

more and more people are going to lose housing. Now, where do

they live? Well, they can move to shelters or they can move to moVerDate 11-MAY-2000 14:28 Feb 09, 2002 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6602 H:\DOCS\HEARINGS\107-16\HBU213.000 HBUDGET1 PsN: HBUDGET1
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tels. What ought to be required reading for everybody who has any

ideas about this is the book, ‘‘Nickel and Dimed’’ by Barbara

Ehrenreich.

In terms of the problems of housing, now if a parent loses housing and can’t get into a shelter, where do they sleep? In the car;

right? With the kids. Now, then comes along the child abuse officer

who says, ‘‘Hey, this is child abuse so we are going to take these

kids away from this parent.’’

And I expect we are going to see—I guess I will ask you, Ms.

Edelman. What is your forecast if we don’t—as we did yesterday—

do anything about housing in the HUD bill and some of these other

problems—what is your forecast for us down the road if we don’t

deal with these things?

Ms. EDELMAN. I don’t even have to be a forecaster. I mean, in

drafting the bill there is a section that addresses affordable housing—housing came up over and over again. There is one story

about a North Carolina mother with an 11-year-old daughter who

left welfare for a job. She worked 38 hours a week at $6 an hour,

and was proud when she was made employee of the month. Then

she lost her housing and was living in a transitional homeless shelter with her daughter. She had no health insurance and earned a

few dollars more than the official poverty line.

But the housing issue and the shelter issue and the rootlessness

issue has come up again and again. I hear school officials tell me

about children that are moving every 3 months, where their parents are trying to stay one step ahead of the landlord. There are

80, 90 percent turnover rates in some schools. It is just an enormous problem. And so we have not addressed that in a significant

way, because the percentage that they are having to pay for rent

is simply beyond the means of most low-income families working

at minimum wage. And an issue that we have to address, is accessible, affordable housing shelters.

We have gotten used to—I have gone to a State and gone

through a school in an Arizona city where they have a school for

homeless children. Why should there be a school for homeless children? Where is the——

Mr. MCDERMOTT. It is the same in Seattle.

Ms. EDELMAN. And it is the same in Phoenix. We have gotten

used to shelters. It is a huge problem. We address it systematically,

but it is so core.

Last story. I was in Columbus, Ohio, and a teacher told me a

story of asking children during the hurricane season to write essays on shelters, and the children did not write about shelters in

emergency situations. She had a number of stories of children who

were describing what it was like to live in homeless shelters, to

have no place to play, to have no privacy, to have the stigma of

having to tell their classmates they didn’t have a place to live.

It is a profoundly important issue for millions of working families

that I hope we will address, and so I thank you for raising it.

Mr. MCDERMOTT. Let me raise another more complex question,

or it seems attendant to it. If you look at this material that was

given to us from a study by somebody named Peter Edelman, and

you look at the least affordable places in the country, they are all

on the West Coast, with the exception of one reference to Charlotte,

34

North Carolina and Raleigh-Durham/Chapel Hill, North Carolina.

Everything else is Washington, Oregon, and California.

Those three States have minimum wages quite a bit higher than

the national average. The national average is something like $5.15;

5.15 is the minimum wage, except in Washington State whereby

initiative we made it 6—I think it is $6.40 or something. The

States where we pay the most, they are the worst off. What is the

answer here?

Ms. EDELMAN. Again, I think what we know is that people without a living wage, you can’t make it with housing and food and

with child care on $6 an hour. I think you had a report come out

talking about what is a livable wage that will allow you to meet

the needs of your children. And so the incomes of working families

at a minimum wage level, as it has currently existed—without the

other work supports like child care and housing, these families

can’t make it. And so I think we need to address that.

Mr. MCDERMOTT. Thank you.

Chairman NUSSLE. Mr. Miller.

Mr. MILLER. Thank you, Mr. Chairman. I want to associate my

comments with my friend, Mr. McDermott. He brought up some

issues that are really probably one of the most important things to

me being a Member of Congress, and that is how do we provide

housing for the people in this country who need housing?

I was raised by a single mother. My dad left when I was about

6 months old, and I lived in a poor neighborhood. There were probably 50 percent Mexicans, 40 percent Oakies, and 10 percent

Arkies, and I was in the minority as an Arkie. So I know what it

is like to try to better yourself in life and to buy a home. But the

problem I have is that we acknowledge the problem and yet we

never deal with the problem.

Now, Mr. McDermott talked about California, Oregon, and Washington and so many other States, and then locally here. We talked

about the concept of affordable housing, and you will never have

affordable housing if you don’t have a move-up marketplace. It is

impossible, because unless you have people moving out of the

lower-priced homes into homes that they can afford more money

for, the lower-priced homes are never going to become available for

people who need those homes.

We have talked about Section 8 vouchers, and there has been

some discussion in the Housing Subcommittee from public housing

authorities that we need to increase Section 8 vouchers. I know

what they are trying to do. And specifically, the director from Los

Angeles came in and said that Los Angeles County has about a 3

percent vacancy rate in rental units for Section 8 voucher. And 3

percent in a marketplace like that means they are 100 percent occupied, because 3 percent is a normal rollover for people moving

out of units and repainting units or recarpeting and bringing them

out. So what he meant was there is no availability at all of affordable housing.

Now, Section 8 vouchers used the way we use them, totally focusing on rental units, does nothing but benefit landlords who own

rental units, and increase demand for rental units; because when

you increase Section 8 vouchers in a limited affordable housing

35

market, all you do is increase the average rents that landlords can

charge for those. And yet we don’t address the problem.

Now, we had an interesting debate on the floor recently on the

VA-HUD bill, and some people probably wagged their fingers at me

for my belief. We were talking about public housing and the problems sometimes dealing with public housing units: Gangs tend to

be drawn to them; drug abuse. We acknowledge that in Congress

and we try to deal with it, because we fund them at a different

level than local government funds police protection for the rest of

the community. So we acknowledge that there is a problem.

When we talked about being able to use government funds for

down payments for people in these income brackets, to be able to

get them into a home rather than having these moneys the government is providing just solely used to benefit landlords who own the

rental properties—and if you tell a person who is at low-income

level that you must use these Section 8 vouchers for rental, and

you are going to be relegated to rental housing for the rest of your

life, they will never be self-reliant.

In fact, every year, 2, 3, 4, 5 years, their rents increase because

market demand increases and the cost increases.

We talked about being able to use these moneys to be able to put

a buyer assistance down payment so these people could buy a

home—and I mean the people who are stuck in public housing,—

and also have the availability to use Section 8 vouchers as part of

their monthly payment.

The way to solve the crisis of low-income people who are stuck

in public housing is to be able to get them to a home of their own.

Now, a great example is one of my finest friends——

Mrs. CLAYTON. Would the gentleman——

Mr. MILLER. Just a second. I would be happy to take questions.

A lady who is a checker down in the Longworth cafeteria—missed

yesterday. She wasn’t at work. I walked up and said, are you OK?

Were you sick? And she had this huge grin on her face and said,

I bought a house yesterday. And she was elated. I said, how long

have you been working? She said, I have been working for it over

2 years, and I finally bought that house.

The happiness in that woman who works herself to death for

probably very little, that now she can afford a house, that is what

we should—the example of California was mentioned about the

high rents, the minimum wage, you know, they should be able to

do better. But California, because of tort reform and the tort issues

associated with building condos and townhomes—and you understand this, you have not seen any townhomes or condominiums

built in California for 10 years because the law is such that an attorney can go file a lawsuit against the builder of a townhome that

the association has nothing to do with. The attorney can therefore

go to the board of directors and say, you either enjoin in this lawsuit or you can be held personally responsible for not enjoining;

and they have to enjoin.

And any attorneys on the committee here, I wish you would

check that out because it is a fact. Builders will not build those

units which are generally affordable because they can’t even get liability insurance in these States to build them; because all liability

36

policies have exclusions for attached products; because they know

there is going to be a lawsuit.

So how do we help people? If you can take Section 8 vouchers

and use part of the money for a down payment and get these individuals into a home and then let them use the Section 8 vouchers

that they qualify for part of their rent, in 4 or 5 years their rent

hasn’t gone up, and before you know it, these people can afford to

make their payments by themselves. Plus down the road 8 or 10

years if they decide to move to another community, they have the

equity in the home that they own, that when they sell it, they can

take that money to buy a home in a neighborhood they want to live

in, not a neighborhood they are forced to live in because that is the

only area they can get into with a Section 8 voucher.

So I applaud my colleagues on the Democrat side for wanting to

address this issue. But I would also encourage us to look at some

approach other than a Band-Aid over the sore.

Let us realistically look at—try and figure out what the problem

is and try to cure the problem rather than putting a Band-Aid over

the sore. You have such a situation in this country where the concept of property rights have so eroded and due process on applications for approvals for units—in California we built out 140,000

units this year, 80,000 less than are needed, and it is not because

developers don’t want to build units. It is they can’t get through

the process and get entitlements rapidly enough to build them. So

every year the demand increases, it increases, and the amount of

people who want to go into housing cannot afford to do it.

I would strongly encourage this committee and other committees

to address the problem, as housing is a great issue. If you buy a

$100,000 home in this country, $35,000 of that is directly attributed to government fees. That is an aberration, and we need to

deal with it. And thank you for your kindness, Mr. Chairman.

Chairman NUSSLE. Thank you. The gentlemen’s time has expired.

Mr. MILLER. A long time ago. I yield.

Chairman NUSSLE. Ms. Hooley?

Ms. HOOLEY. Thank you, Mr. Chairman.

A question to any of the panelists. What do we do—as we have

seen people leave the welfare rolls, many of them still living in

property, we still have many people—the time is running out for

people to leave our welfare system. Having listened to people who

have been on the welfare rolls, there are some people that are very

difficult to move off the welfare rolls. What do we do with those

that are still there, as we have certainly some recession at this

point, although we still have kept our unemployment fairly low—

what do we do and how do we deal with the children, those that

are still left on our welfare rolls as we are not able to get some of

those parents back into the marketplace and on jobs? Any one of

you? Or all of you?

Mr. HASKINS. We struggled with the issue when the welfare reform bill was written. I think most people working on the bill assumed that there would be families that would not be able to leave

the rolls and support themselves over a period of time because of

addictions; because of borderline mental retardation; because of

personality disorders and so forth. So the trick is to develop a sysVerDate 11-MAY-2000 14:28 Feb 09, 2002 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6602 H:\DOCS\HEARINGS\107-16\HBU213.000 HBUDGET1 PsN: HBUDGET1
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tem that is both demanding and is indeed built on personal responsibility, but still allows for, more or less, continuous receipt of welfare by a very small group of people.

So wisely, the Congress punted and said to the States, you figure

it out. Under Federal rules, States can have 20 percent of their

caseload that exceeds the 5-year time limit so that at least, even

in the cases where we are failing and we can’t figure out how to

help the people leave, they can stay on welfare, in effect, indefinitely, and it is up to the State to decide who can stay.

Now, the big issue before us is how many of these people can we

help get off the rolls and stay off the rolls? I will absolutely assure

you that today people who answer that question, their percentage

is much smaller than it was in 1996. In 1996, Members of the

House of Representatives stated on the floor that half of the people

or so were going to have a lot of trouble leaving welfare. Yet we

have already seen reductions in the rolls of 60 percent. Now some

of them are struggling, and there are still people left on the rolls

that can leave.

So we don’t know what the percentage of floundering families

are, but as I said in my testimony, we should learn more about how

to help these families. It is going to involve small steps. There will

be a lot of failure, but the key is to keep helping them solve their

child care problems, get treatment for addiction if they need it and

so forth, and all these things the State can do under the TANF

block grant because they have the flexibility to do that.

Mr. CARDIN. One of the problems is that you are penalized for

taking a small State, and we have changed the law in that regard.

If you leave welfare and go to work, and the State wants to provide

some supplemental assistance, your clock is still running. We

should correct that. We should reward work. We should reward

people who want to take the courage to try to succeed but need

some help.

The people that we are talking about don’t have work histories.

They don’t have a lot of experience. So it is going to take small

steps, and the welfare reform bill of 1996 did not acknowledge that

there were going to be some very difficult people, that we have to

have more flexibility with the system. We need to deal with that.

Secondly, we need to provide services long after people have left

the cash assistance, and States are doing that. They are doing

some of that today, but we need to acknowledge that as a partnership with the Federal Government, that we are not just interested

in getting people off of cash assistance. We want to see people succeed in the workplace, and that is going to require a lot of

postemployment training programs. We have started that, but they

are expensive, they cost money, they cost resources, and that requires the Federal Government, again, to be in a full partnership

in understanding that our objectives are more than just getting

people off the cash assistance.

That is why I raised the issue that a core principle of welfare reform should be reduction of poverty. If we do that, then it is a legitimate concern of the State to continue programs to make sure

people not only get off of cash assistance, but succeed in the workplace.

38

Ms. EDELMAN. We have laid out our response to the need for a

minimal safety net of decency and protection for children in the 12

titles of the Act to Leave No Child Behind, which I hope you will

look at. Children should not go hungry, regardless of the status of

their parents. Children should not be homeless in America regardless of the status of their parents. And children should get that

healthy start in life with basic health care and early investment

and with a decent education so they never have to depend on welfare, so that these basic building blocks of decency and self-sufficiency should be provided to every one of our children.

And secondly, we do address the need for treatment and prevention for those families who have domestic violence and substance

abuse problems. We don’t have adequate treatment, we don’t have

adequate education and training, and we need more transitional

supports, as has always been addressed. But we have looked at everything we know how to look at to say how do we make parents

more self-sufficient, enable them to work, which we favor, but how

do we make sure that the next generation never has to rely on welfare or have needs because they have the skills and the good early

starts that they need. This committee can make an enormous step

doing that by making sure that the health care and the food assistance and the child care assistance is in place.

Ms. HOOLEY. One more question just to Representative Cardin.

If we make getting out of poverty part of that system, what kind

of an investment is it going to take? Because, I mean, we have a

lot of working poor, a lot of people who are struggling, who work

hard every single day, who just can’t make it, and it seems like

more and more of the odds are against them as child care goes up

in our State, as utility bills go up, as housing costs go up. How do

we ever get to the point that people who have worked hard, who

have gotten off of welfare, they are doing everything they can to

take care of their families and children; how do we get into that

next step, and what kind of an investment is that really going to

take?

Mr. CARDIN. It is an excellent question, and that is what I hope

this hearing is the first step in focusing, what type of investment

we have to make as a nation. Clearly TANF is part of that, and

the continuation of TANF and the expansion of TANF. But it is

also dealing with child care and increasing the child care block

grant. It also deals with housing and dealing with the housing policy. It is the Medicaid budget and making sure that transitional

Medicaid exists for people who leave welfare. It is the EITC and

strengthening the EITC so people can really make money by working in our society. It is the social services block grant that we cut

in 1996, that we shouldn’t have cut in 1996, that provides the support service within our community.

So we don’t have one tool nationally. There are many tools that

are available to help us succeed in reducing poverty in this country.

Clearly TANF is one of those tools that needs to continue and expand as we look to reauthorizing it next year.

Ms. EDELMAN. May I make one other comment, please? We could

fund all the health care provisions, the child care provisions, the

work supports that we advocate for expansion of the earned income

tax credit and lift every child out of poverty for far less than we

39

voted in tax cuts for the non-needy. And if we just did not have

the repeal of the estate tax for about 3,500 wealthy families take

effect, we could do much of what we need to lift our children out

of poverty and to give them health care.

So this is not a money issue. It is a choice issue about how we

are going to invest resources. But we have the means to lift every

child and family out of poverty for far less than we have chosen

to invest in the non-needy.

Chairman NUSSLE. Mr. Bentsen?

Mr. BENTSEN. Thank you, Mr. Chairman. I thank our panel for

being here.

At the outset, I want to thank Ms. Edelman. Your organization

recently opened a branch office down in McAllen, Texas, in the

lower Rio Grand Valley, which is really a couple hundred miles

from my district, but I spend a lot of time down there, and I think

it is important that you have done that. I think we are finding in

Texas, particularly in one of the fastest-growing counties in the

United States and along the border area, that child poverty is an

ever-increasing problem. It is not a new problem, but it is an everincreasing problem.

Mr. Cardin and Dr. Haskins and others have brought up other

issues, and I don’t want to just focus on TANF and its outcome, because there is much more to poverty than the TANF program. Obviously we know a lot of working families are struggling to make

ends meet who have never even been involved with welfare, but the

fact is, as Mr. Cardin brought up in his testimony, TANF reauthorization is before us, and we need to be thinking about it.

When TANF passed in 1996, we were in the upswing of the general economy. When TANF comes up for reauthorization in 2002,

we may well not be in a recession, but we certainly will be on the

tail end of the positive business cycle, or at least at the very beginning of a recession, at which times usually those in the lower income end of the scale tend to fare worst. And I am curious, given

the research that you all have done, how you see TANF working,

because I think it is going to be important for us. And I want to

ask just a couple of questions.

Some have to do with the general functions of the programs, and

some have to do with the State-Federal relationship of the program, because I think they are both important.

Ms. Edelman, in your testimony, you raised some—I think—startling statistics about the number of people who get off welfare and

get a job, but then fail to continue to have that job after a period

of time. This is occurring, if those numbers really are as high as

your studies and other studies you cite are showing, at the same

time that we are seeing States who either implemented their own

rules or the Federal program hits the time limit, and if we have

a triple witching hour in the stock markets, this could well be the

triple witching hour of human resources, because the third factor

is the economy as I mentioned.

Are you all seeing any evidence that we have a significant number of the population who have not been able to hold a job, are running up against the time limit and are running into a declining

economy?

40

Second of all, on the issue of health care. We know that the

States—I believe, quite frankly, the States have not done a particularly good job of running some of the Medicaid programs. In fact,

I believe—and I get criticized for this every once in a while—but

as a Texan, I am quite disappointed at how poorly we have done

in participating in the Medicaid program. We have 800,000 children in Texas who are Medicaid-eligible and not enrolled in the

program, and the reason they are not enrolled is because they don’t

know where to go to find it. It’s a hide-and-seek game that the

State pays for what people are otherwise legally entitled to. In fact,

the State has been held under a dissent decree in Federal court,

and the legislature has done some work, but they haven’t done

enough, in my opinion.

We also know that in TANF—and this was a critical part for

many of us to support TANF—that the legislation was crafted, and

Mr. Cardin played a role, and Mr. Nussle played a role in this, to

ensure that there was sufficient funding for child care and job

training in the form of block grants. Additionally, the legislation

extended funding for participation in the Medicaid program once

someone left the welfare program and went into the work force and

would otherwise be ineligible. But we come to find later that in

many reports the States were not adequately drawing down on

those funds, and, in fact, there was a move in the Congress at one

point to draw those monies back in to use for accounting pumps to

make our budgets work.

Are those studies correct? Are the States doing an efficient job

of drawing down these funds, or when we go to TANF reauthorization, is this something where, quite frankly, we should have a

stronger Federal role imposing this?

Mr. CARDIN. You are raising a lot of issues that will come up.

The States did a rather poor job in enrolling Medicaid-eligible people who left the welfare rolls in the Medicaid program. There has

been some slight improvement in the last year. Some States have

done better than others, but still there are too many families that

are ineligible for Medicaid that are not enrolled, and we think part

of the reason is that there are mixed messages being sent when

they leave welfare. They don’t know they are entitled to these benefits. And we have tried to correct this, and some States have

worked with us.

Ken, we don’t know what impact the 5 year time limit is going

to have, because the States haven’t run up against it yet. They are

just starting to come up against the 5-year limitations. They also

have a safety valve within the statute. So it really has not been

tested yet, and we don’t know.

We also have the contingency fund that has never been called

upon. That expires this year. We should reauthorize that for 1 additional year until we reauthorize TANF next year. We don’t know

what is going to happen in the next 12 months, but it would be

nice to have a contingency fund available in case the economy

turns.

We also have to reauthorize this year the supplemental grant

that affects your State of Texas. It does not affect Maryland, but

it is an important part of the program. So we have to take some

actions this year. But you are asking questions that are going to

41

have to be confronted by Congress next year when it reauthorizes

TANF, and we have to be sensitive to deal with the problems that

you mentioned.

Ms. EDELMAN. There are 6 million children currently eligible for

Medicaid and for the Child Health Insurance Program who are not

getting it. States are not doing a good enough job. The fact that you

could have children without health insurance, 11 million of them,

and we are not breaking our necks to let their parents know to

simplify the procedure so that they can access them? I mean, we

will submit for the record a report on where all the States are.

[The information referred to follows:]

LOW-INCOME UNINSURED CHILDREN AND CHIP

Target: Uninsured children under 19 at or below 200

percent of Federal poverty level Type of CHIP

program*

Total children

ever served by

CHIP in FY 1999

Date of CHIP implementation Number Percentage of all

children in State State rank

Alabama ............................... 154,000 12.9 43 C 38,980 2/1/98

Alaska ................................... 11,000 5.3 6 M 8,033 3/1/99

Arizona .................................. 190,000 13.8 47 S 26,807 11/1/98

Arkansas ............................... 92,000 12.8 42 M 913 10/1/98

California .............................. 1,281,000 13.1 45 C 222,351 3/1/98

Colorado ................................ 72,000 6.4 16 S 24,116 4/22/98

Connecticut ........................... 53,000 6.3 13 C 9,912 7/1/98

Delaware ............................... 13,000 6.6 21 S 2,433 2/1/99

District of Columbia ............. 16,000 13.7 46 M 3,029 10/1/98

Florida ................................... 444,000 11.5 41 C 154,594 4/1/98

Georgia ................................. 214,000 9.7 37 S 47,581 11/1/98

Hawaii ................................... 13,000 4.0 2 M NI 7/1/00

Idaho ..................................... 31,000 8.0 30 M 8,482 10/1/97

Illinois ................................... 211,000 6.1 11 M 42,699 1/5/98

Indiana ................................. 131,000 8.0 31 C 31,246 10/1/97

Iowa ...................................... 67,000 8.6 35 C 9,795 7/1/98

Kansas .................................. 60,000 8.0 29 S 14,443 1/1/99

Kentucky ............................... 93,000 8.6 33 C 18,579 7/1/98

Louisiana .............................. 194,000 14.6 48 M 21,580 11/1/98

Maine .................................... 24,000 7.6 26 C 13,657 7/1/98

Maryland ............................... 100,000 7.1 23 M 18,072 7/1/98

Massachusetts ...................... 69,000 4.4 3 C 67,852 10/1/97

Michigan ............................... 156,000 5.7 9 C 26,652 5/1/98

Minnesota ............................. 50,000 3.7 1 M 21 10/1/98

Mississippi ............................ 110,000 13.1 44 C 13,218 7/1/98

Missouri ................................ 97,000 6.4 17 M 49,529 9/1/98

Montana ................................ 24,000 9.6 36 S 1,019 1/1/99

Nebraska ............................... 30,000 6.3 12 M 9,713 5/1/98

Nevada .................................. 43,000 8.6 34 S 7,802 10/1/98

New Hampshire .................... 20,000 6.3 14 C 4,554 5/1/98

New Jersey ............................ 134,000 6.3 15 C 75,652 3/1/98

New Mexico ........................... 117,000 21.1 51 M 4,500 3/31/99

New York ............................... 399,000 8.2 32 C 521,301 4/15/98

North Carolina ...................... 138,000 6.6 20 S 57,300 10/1/98

North Dakota ........................ 10,000 5.7 8 C 266 10/1/98

Ohio ...................................... 205,000 6.7 22 M 83,688 1/1/98

Oklahoma .............................. 170,000 17.6 50 M 40,196 12/1/97

Oregon .................................. 67,000 7.4 24 S 27,285 7/1/98

Pennsylvania ......................... 200,000 6.5 18 S 81,758 5/28/98

Rhode Island ........................ 19,000 7.5 25 M 7,288 10/1/97

South Carolina ...................... 110,000 10.4 39 M 45,737 10/1/97

South Dakota ........................ 17,000 7.8 27 M 3,191 7/1/98

Tennessee ............................. 115,000 7.9 28 M 9,732 10/1/97

Texas ..................................... 1,031,000 16.7 49 C 50,878 7/1/98

Utah ...................................... 46,000 6.0 10 S 13,040 8/3/98

Vermont ................................ 7,000 4.6 4 S 2,055 10/1/98

42

LOW-INCOME UNINSURED CHILDREN AND CHIP—Continued

Target: Uninsured children under 19 at or below 200

percent of Federal poverty level Type of

CHIP

program*

Total children

ever served by

CHIP in FY 1999

Date of CHIP implementation

Number Percentage of all

children in State State rank

Virginia ................................. 118,000 6.5 19 S 16,895 10/22/98

Washington ........................... 85,000 5.3 7 S NI 2/1/00

West Virginia ........................ 45,000 10.1 38 C 7,957 7/1/98

Wisconsin .............................. 75,000 5.2 5 M 12,949 4/1/99

Wyoming ............................... 15,000 10.5 40 S NI 12/1/99

* M=Medicaid expansion; S=separate State program; C=combination of separate program and Medicaid expansion; NI=not implemented as

of September 30, 1999 (FY 1999).

Ms. EDELMAN. That there is unspent child health money when

parents are really struggling to get health care means that they

have to do a better job. And one of the things that I hope we will

do in Congress this year is to simplify those procedures to demand

better outreach and to make it easier rather than harder for working parents to get the health care to which they are currently entitled.

I hope we won’t wait until next year to simplify these procedures

and to invest in health coverage for all children and their parents,

particularly, again, since most of them are working.

And lastly, the jury is out on what is going to happen. We have

21 States that have reached their TANF time limits, and another

11 States’ time limits will be reached by the end of the year. And

the remaining 16, except Michigan and Vermont, will reach those

time limits by the end of 2002. But we should be very concerned

if we have got so many parents who are not staying in the work

force after they have gone into the work force and are having to

fall out because of the absence of child care and health care and

the other things we talked about earlier, and because we haven’t

dealt with the hardest cases yet.

I think these are going to be very big issues that the jury is out

on, and we need to, again, make sure that we are taking adequate

measures to alleviate and prevent child suffering as we go through

these transitional periods. But it is going to require, again, a redefinition of what our goals are. If our goals are to eliminate child

and family poverty, and to make parents more self-sufficient, and

to see that the children get what they need, I think this will require States to act in a very different way, and to make sure that

we are making it easier rather than harder for children and parents to be served.

So I hope that is something that we will be paying a lot of attention to as we reauthorize TANF, but our goals have to change, not

seeing how many folks we can get off welfare, but how many folks

can get into the labor force and how many children we can make

sure get health care.

Mr. BENTSEN. And my time is up. I don’t know what Dr. Haskins

wants to add, but I do want to say this for the record: Congress,

in my opinion, has repeatedly made the rules for Medicaid easier

for the States. They passed a bill that I introduced last year, a bill

that Diana DeGette introduced last year to make enrollment easier, and at some point I think the Federal Government is going to

have to tell the States, if you are not going to do it, we are going

43

to do it for you. I know that breaks a lot of codes and all that we

have sort of set with the States, but I think it is a real problem.

Mr. CARDIN. There is no question there was financial pressure on

certain States not to be aggressive enrolling people who left welfare

and Medicaid, and that was felt at the local offices, and it affected

the number of families enrolled.

Chairman NUSSLE. Mr. Moore?

Mr. MOORE. Thank you, Mr. Chairman and members of panel. I

do appreciate your testimony here this morning. We in Congress,

as you know, deal with many very, very important issues. Certainly tax cuts are important to American people. We have had a

lot of debate, a lot of time spent by Members of Congress in the

House and the Senate on tax cuts, and the President pushed

through his $1.35 trillion tax cut. Certainly energy policy, which is

on the floor today in the House is important. Education is important, defense, and the President still is talking about his missile

defense system, which all costs a lot of money. Yesterday and the

day before we spent probably a lot of time, but not nearly enough

time, talking about cloning and medical research and how to handle that in the future. And these are all—and I am not being sarcastic—very, very important issues.

On the other hand, as Ms. Edelman said, I don’t think there is

anything more important in this country than our children, and I

think we all have to take, I guess, a new inventory of this. And,

again, I appreciate the testimony here, because all of you have

stressed the need to pay enough attention to our children in this

country and what happens with them.

I came to Congress in 1998, and I had been a district attorney

for 12 years and dealt with child abuse and family violence and

saw what that does to families and to children especially. And you

don’t forget that when you see it firsthand as a prosecutor and talk

to moms and kids who have been through some of the things they

are through.

I think there are two vulnerable populations in our society, and

we need to pay particular attention to them, and certainly the senior citizens and elderly and especially the poor among those. But

the ones who truly can’t take care of things are children, and we

have a special obligation, I think, as Members of Congress, to devote sufficient time and attention to children and make sure their

needs are met, because, again, they can’t care for themselves. They

are totally dependent, at least young children, on adults to provide

that care.

It is frustrating, as a Member of Congress to know that we have

all these responsibilities to Americans, and the issues I have already talked about, and we pay attention to those, and yet the

voices that aren’t heard enough, I guess, are the ones speaking out

for kids, as you all have this morning.

I was over in Kansas City—I think I mentioned this once before

in talking to the Secretary of Education who was here—and I went

to I think it was a second- or third-grade class. There was a little

boy, and the superintendent of the schools who was taking me

around said, do you see that little boy over there? He and his mom

live in a car, and how do we expect him to focus on what is being

taught in school when he is wondering where he is going to be

44

sleeping at night? And the test scores are not going to be good either.

We talk about testing kids, and we talk about education and

leaving no child behind, but we leave a lot of kids behind. And one

thing I participated back home a couple of weekends—and this is

very, very small—but went door to door trying to tell people about

the CHIP program in some of the low-income neighborhoods, and

sometimes when people would answer the door, they seemed almost suspicious of why somebody there from the Federal Government would be trying—what do they want, and what were they

going to be asking, what kind of questions.

And you mentioned, Dr. Edelman, a report about medical care for

children. I guess I really would like to see that and find out how

we can better—the States—get parents to enroll their kids in the

medical care programs that are available to children. That would

be, I think, very, very helpful.

Again, I don’t have other questions right now, but I do appreciate

the information. All three of the witnesses have delivered their

statements, and I know Congressman Cardin has done a lot of

work in this area, and I really appreciate that as well. Thank you

all very much.

Chairman NUSSLE. Mr. Capuano?

Mr. CAPUANO. Mr. Chairman, thank you. First of all, I want to

thank you for having this hearing as well. I think it is honorable

and the right thing to do.

I have a few comments, a few clarifications I would like to get,

and then a few questions, starting with, first of all, I appreciate the

focus on the difference between ending poverty and ending welfare.

I think it is an important distinction that I will carry forward from

this day as I speak about these issues—because I haven’t really

thought of it in those terms—and I just want to thank you for putting it in those terms.

Secondly, I wish Mr. Miller was still here, relative to his comments on down payment assistance. There are many people who

think that we have to do one and not the other, and that is just

not true. Last year, the House actually passed a bill on housing

issues the Senate didn’t take up that included a down payment assistance program that I authored in the Banking Committee. It

was adopted, I believe, on a voice vote. I am not even sure. It was

bipartisan; everybody agreed with it. There was no problem whatsoever amongst any housing advocate that I know relative to the

President’s proposal on a new down payment assistance program.

The problem is at what cost? And for me the issue is not that program or any other program that wants to help anybody get into

housing, either as a tenant or an owner. It is that program is authored at the detriment of existing housing programs.

We are proposing to build a new porch on our houses when we

not only allow but actually encourage the crumbling of the foundation. We are taking money away from existing housing programs

and are adding in new programs, and that is a huge distinction.

It is not the same to say we oppose new programs. We don’t. I don’t

know anybody who does. We simply want to make sure that the

programs we have are maintained and stabilized before we start

45

building on it. And I wish he had been here to hear that, and I will

try to express that to him at a later point.

The other point I want to make is I am sure that it is true. I

know it is true. Not every State has screwed up the SCHIPs program. There are some States that have done a pretty good job, and

I think that has to be drawn out as well, because it is not a total

problem. There are many States that have done a good job—not

many, several. Maybe many. I don’t know the exact number. And

they have provided a model that other States can and should follow. We don’t have to reinvent it here in Washington. It would be

a shame, though—I happen to agree with Mr. Bentsen that maybe

we will have to at some point. It would be a shame if we have to

take it back. I don’t want it back. It should be at the State level,

but they refuse to do it. When other States can do it, that is something we will need to address, and I think it is important to say

that, that not every State has made a mistake.

I would just like to get a clarification, Dr. Haskins. I think I understand it, but I want to make it clear in my own mind. When

you talked about encouraging marriage, and at a later point during

that same discussion you talked about committed monogamous relationships, I want to know, was your statement a statement on

moral values or a statement on the economies of scale that is

gained by more than one person contributing to the overhead of a

family loosely defined?

Mr. HASKINS. I believe it was both. But it certainly is just a statistical observation first. There is, I think, virtually no analyst

would doubt that one of the main contributing reasons to increases

in child poverty and continuing high levels of child poverty is the

dramatic increase in the percentage of our children who live in single-parent families. It started roughly in the early 1960’s and just

kept going until about 1994 or 1995, at which point it leveled off,

and it is coming down a little bit now. That in itself will have a

dramatic statistical impact on growth of poverty rates or child poverty rates in general.

But it is also a moral statement that parents who have children

should be deeply committed to them. All our young people should

know that by far the best rearing environment for a child is a married two-parent family.

Now, we have a lot of single families. We shouldn’t forget them.

We should not demean them. We don’t need to say unkind things

about them. But the fact remains that children do much better in

a married two-parent family, and our public policy should take that

into account.

Mr. CAPUANO. I appreciate that, but I would take issue with the

moral value aspect. I agree with you 100 percent that the economy

is gained by having two or more adults together. It is a great benefit and a great benefit for the child. On the other hand, I didn’t expect this to be a moral discussion. I might disagree with you on,

first of all, the definition of marriage, and, second of all, whether

a child is better off with two parents or two adults in the household, whether they are married or not. I would argue that they

probably are better off even if they are not married, and marriage

would be nice, and it is a nice moral value that maybe I might

share with you, but I am not sure it is important to the discussion

46

we are having of the economics of policy. But, again, it is a discussion for another point.

But I want to ask Ms. Edelman and Mr. Cardin, Dr. Haskins

made a comment that we are on the right track, very general statement obviously, and lots of details we could argue about. I just

want to make sure that you would agree with that general statement that we are on the right track, or would you not? Would you

disagree with it?

Mr. CARDIN. I think we have some very important tools that are

in place, and we need to strengthen those tools. In regards to welfare, yes, I think we are on the right track. In regards to housing,

no, we are not on the right track. In regards to other areas that

affect poverty, I think we have to be bolder and look at new approaches, but I think in regards to the social programs of welfare

and the related—if we provide the resources, and we correct the

problems that I have mentioned, I think the tools will work to reduce the poverty levels in this country.

Ms. EDELMAN. May I just make a very few brief comments? One

is that we will submit for the record how all the States are doing

in enrolling their children and what can be done to make it better,

so you can make your own judgments. But at some point we need

a Medicare program for children. If every 66-year-old is automatically entitled to health care without a whole lot of bureaucracy regardless of where they live, every 6-year-old and 16-year-old should

have the same. So while we are trying to pave the little highways

that we have on Medicaid and CHIP, I hope we will move ourselves

toward the same safety net that we have for our senior citizens so

that parents do don’t have to go through the State bureaucratic

hassle.

Secondly, I would just like to comment that even if—and I will

check my figures when I go back—but even if we took the poverty

rates in two-parent families in America among children, they

would be far higher than poverty rates in any other comparable industrialized nation, and we need to do better by both single parents

and by two parents. But we have got parents—two parents struggling in a labor market who still can’t buy decent housing or rent

decent housing or afford child care, and so we have got to support

two parents as well as single-parent families in the labor force.

And lastly, we may be on the right highway, but we are not

going fast enough, and there has just got to be a whole different

level of commitment. We cannot have a Nation that says, we favor

justice and equal opportunity, and have 12 million poor children.

No other country in the industrialized world has poverty rates like

these. I mean, no other country lets its children go without basic

health care regardless of where they live. And we know what to do.

If you made the child care tax credit fully refundable, 2 million

children could have been lifted out of poverty immediately. I am

very glad that we got a partial one, but we can take those steps.

We have got to move far more holistically and with the sense of

moral urgency to see that all of our children get the good early

childhood foundation they need, to get the education they need, and

that is what we have tried to do by laying out a coherent policy

vision in the Act to Leave No Child Behind. They don’t come in

pieces, again, and we have got to stop the incremental marginal

47

steps and to take our children and families as seriously as we have

taken, from my view, far less important things.

So we need to go in a much more comprehensive and a much

more rapid way. Children have only one childhood, and we are

building prisons faster and faster. I don’t know what to say about

the values of a Nation that would rather wait until a child gets

into trouble and build more and more expensive prisons and won’t

give that same child health care and child care.

These are not rocket science solutions. I would just invite any

member of this committee to go out with us and to look at all the

wonderful programs and policies that are in place, which if we extended them to all children, which is what we need to do, could

really begin to have an enormous impact.

So the issue is not what to do. The issue is building the will that

makes us do it, and we are determined to see that that happens.

Mr. CAPUANO. Just a little footnote. Some people would argue

that prisons are a form of housing, and I wouldn’t share that.

Ms. EDELMAN. A very expensive and undesirable form of housing.

Mr. CAPUANO. You made a comment earlier on that we have the

means——

Ms. EDELMAN. We have the means.

Mr. CAPUANO [continuing]. To do all this. Depending on where

we are and based on what I have seen in this Congress thus far

and what I read in today’s Congress Daily by some eminent leaders

of this House and the Senate, I think we may have to amend that

statement at the very near future that we had the means, and we

made other choices. I don’t happen to agree with those choices, but

think that is going to be the case at the end of this Congress

and——

Mr. CARDIN. As a Nation we have the means. As a Nation, we

have the wealth.

Mr. CAPUANO. And as representatives of this Nation, I believe we

have made—not me, but I think this Congress has made decisions

that will make that statement, that we had the means, and we

made different choices. I think it is a shame, but I think it is true,

because I just don’t think that we are going to be able to meet

these ends. We are not willing. I shouldn’t say we are not able. We

are not willing to do what it takes to accomplish the goals that we

all sit here and espouse, yet our voting records don’t show that.

Thank you.

Chairman NUSSLE. Mr. Price.

Mr. PRICE. Thank you, Mr. Chairman. Let me add my appreciation to the panel, to all of you, for appearing here and for the quality of your testimony.

Ms. Edelman, let me ask you first about the implications for our

current appropriations decisions of your testimony. As you know,

the Labor-HHS-Education appropriations bill will likely come at

the end of the current appropriations cycle. That means it is in

great danger of being squeezed by other appropriations bills, by the

tax cut that has just been enacted, and by the shrinking surplus.

So there are going to be some real pressures on that bill.

In your testimony you focus on that bill. You talk about the need

for a billion-dollar increase in Head Start, a billion-dollar increase

48

in the child care and development block grant, as well as the restoration of funding for the social services block grant.

In your report on your Leave No Child Behind proposal, you advocate full funding for these items. How close would the amounts

you advocate in your testimony come to that goal of full funding?

What do you regard as full funding? What is the desirable level of

funding for these items?

Ms. EDELMAN. Well, I think we lay that out, and I will submit

in detail what we mean by full funding, both for Head Start and

for child care, and I don’t know whether it is 80 percent, which is

what we usually talk about in terms of full funding for child care,

but we have that worked out as obviously a floating target. But I

think when we talk about full funding for child care, we are saying

every eligible child, and it varies when we say what we mean. And

I think it is about the 80 percent level, but we can provide you very

specific figures of what we mean by that in each of the areas, and

then you can see how close you are coming.

It is very clear that in terms of the administration’s budget proposals, appropriations proposals, we are going to actually end up

losing children under Head Start, and we are going to not address,

in any way, the significant child care and housing and nutrition

needs of our families. But I will be able to answer that by submitting that to you within the next few hours.

Mr. PRICE. Good. That would be helpful, because we are going to

need to not only look at the administration’s request very critically,

but also what our Appropriations Committee can come up with

and——

Ms. EDELMAN. We will get that to you by the end of the day, sir.

[The information referred to follows:]

MS. EDELMAN’S RESPONSE TO MR. PRICE’S QUESTION REGARDING HEAD START

While Head Start now serves only 3 out of every 5 eligible preschoolers and a

fraction of the infants and toddlers who are eligible for and will benefit from Early

Head Start, current enrollment would have to be cut by 2,500 young children if the

administration’s Head Start budget proposal for fiscal year 2002 was enacted. Head

Start is the premier early childhood program and it is critically important to make

the new investments that will extend the program to all the children who are eligible for and will benefit from its vital and comprehensive services.

Mr. PRICE. And what kind of effort it is going to require to meet

these goals, which have a lot of lip service going for them, but the

question is can we make the money available to really meet these

commitments.

Mr. Haskins, let me turn to you and ask a question drawn from

your testimony, the charts you provided. They give a rather hopeful

picture. At least they appear to. Welfare reform is working, you

say. You give an impressive defense of the policy changes that have

been made, both welfare reform and the expansion of the work support system. As you know, skeptics attribute much of the change

that has occurred to the thriving economy. How do you separate

the effects of the thriving economy from the effects of changed policy? I suppose those competing claims are now about to be put to

the test as we absorb the effects of an economic downturn.

But let me ask you, how do you expect the economic downturn

that we are experiencing and that we anticipate, to affect the gains

that you have identified? What is going to happen to those charts,

49

do you think, in the next year or two? And depending on what the

answer to that question is, what are the implications for Federal

spending levels or for Federal policy more generally?

Mr. HASKINS. Right. First I would like to point out to the members of the committee that we also had an extremely hot economy

in the 1980’s. We had a net increase of 19 million new jobs, and

during that time the welfare rolls went up 10 percent. So to say

that a hot economy automatically sucks people off welfare so that

they can take advantage of a hot economy, it just doesn’t work that

way. It was only when we changed the welfare system in combination with a hot economy that we got these good results.

Now, if the economy continues to go in the direction that it is

going, and we begin to have impacts on unemployment, especially

among low-income families, which is a reasonable expectation, then

we may have some trouble. The States have had about a 60 percent

decline on average in the number of people that they have in their

welfare caseload relative to the funding level they have, because

the funding level for every State was set at the highest of a combination of years in the early and mid-1990’s. So the trick for the

States will be to handle this problem to bring that money back so

more people can receive welfare. Some of them have saved up some

money. Some of them are not using all their money. Some of them

have made investments in other places, and they—for example,

child care, presumably they have less child care if they have fewer

people working, but they will have to bring that money back so

they can make sure that people that would have qualified in the

past will continue to qualify for benefits if they cannot find a job.

So there are a lot of resources in that block grant, and I would

like to point out one more thing to the committee. The unemployment insurance system depends on a trust fund, and when that

money is gone, the States are out of luck. They have to borrow

money out of Federal law. They are forced to borrow money and

pay interest. But under TANF, the States get new funds every single year, so they have a new source of money that comes every single year.

Now, having said those things, I do think that there are things

that we should be concerned about. I think probably the first thing

that we should do is to make sure that States use the most recent

accounting period. When the States decide who gets unemployment

insurance, they base it on how much they have earned, and over

a period of time to qualify recipients must work in at least two

quarters, but many States do not include the most recent quarter.

Well, what quarter is an unemployed person most likely to have

worked in? You can’t get above 100 percent. They have all worked

in the most recent quarter. But as a leftover from the old days

when States didn’t have computers and couldn’t compute it so

quickly then states were allowed to ignore the most recent quarter.

So that one change would make a big difference in the number of

people that would be covered by unemployment insurance.

Secondly, our contingency fund that Mr. Cardin mentioned, is

not a very effective device. The trigger is too high. I do think we

should make some changes in the contingency fund, and that would

undoubtedly be scored as costing some money by the Congressional

Budget Office, but I think we should do it.

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Mr. PRICE. Well, let me just—my time has expired, but as to your

comparison of the 1980’s and 1990’s as being basically equivalent,

except for the policy changes: Am I not correct that unemployment

averaged about 7-1/2 percent in the 1980’s? That is considerably

different, isn’t it, than the 1990’s? Would that not be an important

distinction you would want to mention in terms of people leaving

welfare for the workforce?

Mr. HASKINS. Absolutely. And there are other differences between the 1980’s and the 1990’s, but if the general proposition is

that a hot economy with lots of new jobs attracts people off welfare,

there is absolutely no evidence in the history of welfare to support

that to anything like the degree that we have seen in the 1990’s.

I am just making a simple point that there was both a pull and

a push; a push that required people to leave welfare and really, I

think, fundamentally changed the values and the approach to life

of people on welfare that they have to do their part, and the public

officials now expect that of them. It has been communicated very

clearly, and so they join the economy in jobs where their income

increased, and that is a very important part of the solution, along

with the work support system that we all agree is a good thing.

Mr. PRICE. You make a convincing case for the importance of policy changes. I am just not sure that your argument using the

1980’s as a baseline holds up.

But anyway, my time has expired. I appreciate your elaboration,

and of course I will appreciate any further thoughts that you have

down the line about the likely implications of the economic downturn for Federal policy. Thank you.

Chairman NUSSLE. Mr. Clement?

Mr. CLEMENT. Thank you, Mr. Chairman. This has been an excellent panel. It has been a very helpful to me.

I wanted to ask you, Dr. Haskins, first, and then I want the others to comment as well.

I had a situation in Nashville. I went to a high school, and they

have a nursery school in the high school, and, you know, I am one

of those people that feel like, if we don’t do more to help our children, we truly will go back into the Dark Ages. As rich and as affluent as the United States is, I can see signs of real deterioration,

and that lack of investment in our children not only to provide

them services, but also to protect them.

But I noticed at the high school when I was talking to the mothers with the small children in the nursery school, in the public high

school and home, and then I started asking them about their—

about the father, and none of the fathers were in the high school.

All the fathers were older guys, you know, with cars, money, housing, whatever. But they were preying on those young girls, and—

but none of those women or young girls in high school were still

trying to complete their high school education. None of them were

really holding that person accountable for them having a child. The

government was still trying to help where they could, but the guy

that impregnated them seems to be taking a walk. And I am really

concerned about the deterioration of the family, and this is happening all over the country. This is just an example of what I have experienced at home.

51

Mr. HASKINS. I want you to know that if that is the case, the

mothers are in violation of the law. They cannot under Federal

statute get welfare payments unless they have fully cooperated

with the child support system, and it is specified in the law specifically what they have do to cooperate.

Not only that, but if you look at recent data, it is truly astounding. In 1996, in the welfare reform bill, we passed the most ferocious set of child care provisions you could possibly imagine. I suppose we could still add the death penalty for nonpayment of child

support, but they are ferocious provisions. And in 1999, we actually

established more paternities than there were children born outside

marriage because of this new law and the cooperation that has

been forthcoming from the States.

So the thrust of my answer is that the child support system is

very strong and getting stronger. It still has problems, but it is a

very unusual high school where all the mothers in a class have not

identified the fathers, because we are getting paternity establishment all over the country.

And, by the way, I would like to add one thing. Undoubtedly the

single most important measure that States have taken to establish

paternity in these cases of births outside marriage is to go into the

hospital and to voluntarily ask the father to sign the paternity

agreement. What a great opportunity it is now that he is going to

be a father and so on, and they do it.

Ms. EDELMAN. Let me say two things. If older men are preying

on or dealing with younger children, then they ought to be dealt

with, and that should not be permitted under the law. I mean, I

think that maybe we need to talk about making sure that young

girls are not falling prey to older men, and we need to talk about

that.

Secondly, I really do believe that every parent, father and mother, should be able to support their child and believe very strongly

in child support enforcement. There are provisions here for that

and that fathers should be held accountable.

But third, we have got to establish, again, a new tone. I think

that we have got to make sure that young men coming up are

raised, like young women, not to have children until they are able

to support them, and we make sure that they get the education and

are then held accountable for making sure they are good parents.

I mean, Benjamin Franklin said a whole long time ago that a key

to marriage is young men who can support their families, and so

I think that we have got to pay as much attention to boys as well

as to girls and to try to set a different climate.

And last, let me just say we are hypocritical in this country in

some ways about out-of-wedlock birth. You know, we laud in our

culture—just as we laud violence—we laud sex without consequence. We put on the front of People Magazine single, very famous unwed mothers and somehow say that is OK, but we need

to come to grips with how we are going to—what the cultural signals are on violence, on sex as bliss without consequence, on the

importance of family, but we need to do it in all strata of our society.

But I do support stronger child support enforcement and making

sure that we don’t have that situation repeating itself.

52

Mr. CARDIN. I think this is one area that we all can come together on. I think there has been strong bipartisan support about

child support enforcement issues, and I think Ron Haskins’ point

about marriage is something that we all agree with. I think he

would not disagree when I tell you that if the father has a job, and

he can contribute to the family, it is a much better candidate for

marriage than if you have a father who doesn’t have a job or is in

prison and has no hope. It is much more difficult.

So there are two initiatives, Mr. Chairman, that this House has

passed that I think will help the situation. One is the child support

pass-through that we have talked about, which says that the arrearages go to the families so that the father feels that he is part

of the family with the child support that he is paying. It connects

the family together, and it makes sense. We have passed that before.

The other is the fatherhood initiative, which says that, look, if

you want to get a family off of welfare and out of poverty, there

are two parents here. Don’t just deal with the custodial parent,

deal with the noncustodial parent. Provide job training and counseling to the noncustodial parent. And we have passed that bill

also. It has died in the Senate by inaction, but I think there are

two major pieces of legislation that we should make sure this year

actually get to President Bush’s desk and get signed into law.

Mr. CLEMENT. I wanted to follow up on the faith-based organizations in your testimony. Are you concerned about the fact that the

faith-based organizations would take away or divert money from

other services that need——

Mr. CARDIN. No. I am not. I am concerned there is not enough

money available for faith-based and governmental and nongovernmental, nonfaith-based programs to be able to do their job. So why

not use the existing funding sources that have been successful in

energizing the faith-based groups, such as social services block

grant, put more money into that, and you will be able to deal with

the problems that are out there in a much more effective way.

Mr. CLEMENT. Thank you.

Chairman NUSSLE. We have a couple of votes on the floor. We

have time for one follow-up question, Mrs. Clayton.

Mrs. CLAYTON. Just a follow-up. I wanted Dr. Haskins and Ms.

Edelman to know that there is some reform that you mentioned

about food stamps that is in progress. The Agriculture Committee

is in the process of writing the farm bill, and the issue you raised

about quality control for the States is in place. Also transition from

welfare to work is in place. I think at least we are beginning that

role and hope that you will continue to encourage it.

Thank you, Mr. Chairman, for having them.

Chairman NUSSLE. I would like to thank Dr. Haskins and Marian Wright Edelman for their testimony today and appreciate all

of your thoughts, and particularly to our colleague Ben Cardin.

There are many Members who come before our committee to testify

and oftentimes, because of scheduling conflicts, have to leave. Up

here for the entire hearing. We know of your commitment. We appreciate the fact that you would spend the kind of time that you

have with us today.

53

And what we will do is we will recess the hearing. We have three

votes on the floor. I apologize to the second panel that we have to

do this, but we need to go vote, and then we will return as soon

as we can after the third vote and begin the second panel. Thank

you again to our panelists.

[Recess.]

Chairman NUSSLE. The full Budget Committee hearing on what

we entitled ‘‘Making Ends Meet: The Challenges Facing Working

Families in America’’ will resume with our second panel.

We have with us today a very distinguished panel: Sharon Daly,

who is the Vice President for Social Policy for Catholic Charities,

United States, USA. We have LaVerne Hewlett, who is a mom and

has probably one of the most important jobs that anybody can

have, and that is nurturing and preparing her kids for the future.

We are so happy that you could join us today to talk about some

of the issues that you think are important for us to consider. And

we have Robert Rector, who is the Senior Research Fellow for the

Heritage Foundation.

We welcome all of you. Your prepared testimony will be made

part of the record, and so that in the time that we have, we would

like you to summarize and give us your best ideas and recommendations, and we will begin with Sharon Daly from Catholic

Charities. Welcome.

STATEMENTS OF SHARON DALY, VICE PRESIDENT FOR SOCIAL POLICY, CATHOLIC CHARITIES USA; LA VERNE HEWLETT, WORKING MOTHER, EMMITSBURG, MD; AND ROBERT

RECTOR, SENIOR RESEARCH FELLOW, THE HERITAGE

FOUNDATION

STATEMENT OF SHARON DALY

Ms. DALY. Thank you very much, Mr. Chairman. I have to begin

by telling you I think that was the best hearing on poverty issues

I have heard in 22 years of covering these issues on Capitol Hill.

I think you and your colleagues are to be commended for the serious attention and strong attendance that you had and very good

questions and, of course, the three wonderful witnesses.

My testimony today is based on both a hundred years of Catholic

social teaching and a hundred years of practical experience by

Catholic Charities agencies throughout the country who together

served 10 million of the poorest people in America last year.

The Catholic social teaching, I just want to mention, is based in

our Catholic teaching that we have respect for human life and dignity. We foster families and support communities and believe that

a preferential option for the poor should be at the heart of both our

teaching and public policy. The tenets of Catholic teaching made

clear that the poor cannot be helped only through private charity

or volunteer efforts, and as important as personal ethics and morality are, we cannot ignore the fundamental questions about the justice of decisions made by businesses, institutions, and government.

Our teaching tells us that as a society, both public and private

institutions have the responsibility to ensure that human rights

and dignity are protected. Among these rights are the right to participate fully in society and in the economy, the right to fair pay

54

and just working conditions, the right to adequate wages, and the

government supports that are needed to raise children in a wholesome environment.

The Church calls on all in our society to recognize that economic

decisions have human consequences and moral content. They help

or hurt people. They strengthen or weaken family life. They advance or diminish the quality of justice. Every economic policy,

every Federal budget decision, should be judged on its potential for

protecting or undermining the common good and the effects on the

poor and vulnerable.

The recent experience of Catholic Charities USA’s member agencies, whose quarter of a million volunteers and staff are painfully

familiar with the hardships of the working poor, underscore the

challenges that working families face. Despite the strongest economy and the highest employment rates in our history, for the past

5 years our agencies have reported steady increases of 20 percent

or more yearly in the amounts of emergency food and shelter they

have had to provide.

In the most recent report, we found an increase in need of 30

percent in emergency food alone. The typical family coming to

Catholic Charities for emergency food is a parent who is working

at $6 or $7 an hour. Each month after paying rent, utilities, and

child care costs and paying for transportation to and from work,

the parents have no money left to put food on the table. And only

half of the eligible families are receiving food stamps because, Mr.

Chairman, it is harder in this country to get certified for food

stamps than it is to pass the bar exam. Wages at the bottom of the

labor market have not kept up with skyrocketing rents for even dilapidated apartments. Rents and day care costs consume parents’

earnings, leaving little or nothing for food or clothing or transportation.

In the recent economic boom, landlords raised rents and were

able to turn away families with children, especially those who have

low incomes and need the help of Section 8 housing vouchers.

Across the country, our agencies report that families are living

in shelters and transitional housing, working families, even those

with two jobs because there are no affordable apartments.

In today’s New York Times, there is a front page story showing

record rates of occupancy in the shelters all across the country.

What it doesn’t point out is that a very large number of these families are working families.

Others can provide you with more statistics about the growing

income gap in our Nation and the hardships that working families

face. But our agencies witness another kind of evidence: the shame

and weariness of parents who work all week and then have to beg

for food on weekends; the disrespect of older children for parents

who can’t provide the essentials, much less the little luxuries. Yesterday’s Washington Post and New York Times echo what our

agencies tell you of adolescents out of control when the mothers

have to move from welfare to work.

We have a number of recommendations, Mr. Chairman. The first

is we need policies to increase wages. We need to have a higher

minimum wage, and there is nothing that can replace that. We

have people who do the hard, back-breaking work of society. ExVerDate 11-MAY-2000 14:28 Feb 09, 2002 Jkt 000000 PO 00000 Frm 00058 Fmt 6633 Sfmt 6602 H:\DOCS\HEARINGS\107-16\HBU213.000 HBUDGET1 PsN: HBUDGET1
55

cuse me for saying this, but they wipe the bottoms of the babies

in day care centers and of the old people in nursing homes. They

scrub the floors and toilets in this office building when we all leave.

They stoop in the hot sun and inhale pesticides so we can have

good food. Our society would collapse without the work of these

people.

Now, some argue that the answer is more education and training

so they can qualify for skilled jobs. And of course that is right, but

our society will still need millions of workers to keep the hospitals

clean, mind the children, and process the poultry. We will always

need these people, and we need to pay them fairly.

It is hard to justify how we can continue to allow a minimum

wage that is an insult to working people, and as long as Congress

postpones action on this, employers will be transferring their labor

costs or part of their labor costs to government programs, because

government has to pick up more costs for day care and health care

and other things that employers should be paying for.

It is also important to note that many of the lowest paid and

hardest working people, agricultural workers, aren’t even covered

by the National Labor Relations Act or the Fair Labor Standards

Act. Simple justice requires extending these protections to this category of workers and stepping up enforcement of the labor laws.

But until Congress closes that gap and gives people a chance to

earn enough to support themselves without government help, we

need to concentrate on wage supports.

There are certain needs that will just not be met by the economy

without government intervention. As Mr. McDermott and Mr. Miller pointed out, people with Section 8 vouchers are not able to use

them to find affordable apartments. And housing developers are

not, on their own, building affordable apartments for families with

children; not just because of government regulations, but because

they can make more profitable investments in trophy houses and

starter castles. Only 1 in 5 of low-income families get any kind of

housing assistance. There is an absolute shortage of day care, and

only 20 percent of eligible families are getting day care subsidies.

We need also to have government subsidies so that working families can have decent housing, safe child care, and adequate health

insurance. You heard all about these issues in the earlier panel,

but we have an additional recommendation. And on housing, we

support the idea that the Federal Government should fund production of rental housing for families, as it does for senior citizens

under the Section 202 program.

As you and the Budget Committee know well, every single year

Congress increases funding for this program that funds production

and maintenance and rents for our seniors to live in decent housing. It seems to me it would be possible to provide the same kind

of program for families with children. The Federal Government

could contract, as it does in 202 for the elderly, with community organizations and religious organizations to sponsor and produce that

housing.

We also urge you to look at marriage promotion. We certainly

have in our faith the belief that marriage is both a sacrament and

sacred, and also that government policies should promote it.

56

We have long supported the fatherhood initiative that passed the

House of Representatives last year but got stalled in the Senate.

We hope there will be another effort to move that this year. It

would provide new money to support and sustain marriage programs, and would encourage noncustodial parents to become more

involved in the lives of their children. It would also provide training to help noncustodial parents contribute to the support of their

children.

The TANF statute allows States to use welfare money for programs to promote marriage and stable families. However, with so

many low-income families struggling to pay for their basic needs,

we could not support proposals to require States to devote a specific percentage of their TANF dollars to marriage proposals, especially when those ideas are coupled with calls to reduce TANF

funding.

We do have a proposal, though, to promote marriage. For the

past 60 years, six decades, State and Federal welfare policies have

discriminated against married couples and two-parent families. If

we are serious about promoting marriage, Congress should require

States to remove all the barriers to TANF eligibility to two-parent

families.

By the way, Mr. Clement’s example of young mothers who have

become pregnant by older men is very common across the country.

We would argue against, however, trying to persuade those young

mothers to marry the older men who took advantage of them. We

think those men should be prosecuted, not become husbands. So

there is a big agenda here with respect to marriage.

As Dr. Haskins recommended, we also think it is important to

reduce the marriage penalties, the earned income tax credit and increase the credit for families with more than two children. This

year’s tax bill was a wonderful step forward with respect to the refundable children’s tax credit, but we need to do more.

In closing, I would like to remind the committee of the sad story

of the social service block grant that Mr. Cardin made reference to.

Several years ago, inexplicably the Congress cut that program by

a third and transferred the budget authority for services to the

poor to the highway bill. To the highway bill! The social service

block grant is the primary source of Federal funds for community

groups and religious organizations to help the working poor, and

we urge you to increase that funding, to work with the Ways and

Means Committee, and to make sure that additional authorization

is embraced by this Congress.

Thank you very much.

Chairman NUSSLE. Thank you very much for your testimony.

[The prepared statement of Sharon Daly follows:]

PREPARED STATEMENT OF SHARON DALY, VICE PRESIDENT FOR SOCIAL POLICY,

CATHOLIC CHARITIES USA

Mr. Chairman, Congressman Spratt, and members of the Budget Committee: My

name is Sharon Daly, and I serve as Vice President for Social Policy at Catholic

Charities USA. I would like to thank you for the opportunity to testify before this

Committee on the challenges facing working families in America. Catholic Charities

USA is the national association of more than 1,400 independent local Catholic Charities agencies and institutions with more than 250,000 staff members and volunteers. In 1999, Catholic Charities’ programs served nearly 10 million people of all

religions—or of no religion—and of every racial, ethnic and social background.

57

THE WORKING POOR

On a daily basis, our agencies provide services to the struggling families who are

the focus of today’s hearing. The people coming through our doors are the people

whose daily labors make life easier for all of us. They clean our houses and our office buildings. They care for our children in understaffed day care centers, or for

our parents in nursing homes and long term care facilities. They stock the shelves

in our supermarkets. They harvest our food in the fields, get meat and poultry to

market in the slaughterhouses, and prepare food and serve it in restaurants and

cafeterias. They have provided the difficult and often back breaking labor that has

played a large role in creating and sustaining this nation’s recent economic boom.

Every day, Catholic Charities staff provide help to working parents who cannot

afford to put food on the table after spending so much of their income on rent and

child care. They see parents who are living in our shelters far from their children’s

schools, because there is no affordable housing available. They see parents who have

worked for years at low wages with no benefits, who have been unable to afford regular check-ups and are now suffering from untreated diabetes, high blood pressure

and heart disease. And our experience with these working families has led us to

conclude that the Federal Government can and must do more to ensure that parents

can provide for their children without having to come to Catholic Charities for a

handout.

Consider, for example, that in the past year, requests for emergency food assistance nationwide, including at Catholic Charities agencies, were up 30 percent, mostly from the working poor. Indeed, according to our front line caseworkers, the typical family coming to us for emergency food assistance is a parent working at or even

$1 or $2 above the minimum wage. Each month, after paying rent, utilities and

child care costs, and arranging transportation to and from her job (often far from

where she lives), she has no money left to put food on the table. And that’s a good

month. If she gets sick, for example, and has unpaid medical bills, or loses time off

work, she will get behind in the rent.

The experience of our local agencies may seem difficult to reconcile with the generally positive economic news. How can it be that working families have to come

to churches and charities for food when we are in the midst of the strongest economy that this country has ever seen? How can so many families be living so close

to the edge when, as the Census Bureau figures tell us, in 1999 the nation’s poverty

rate fell to 11.8 percent, its lowest level since 1979, and poverty among African

Americans fell to 23.6 percent, its lowest level ever?

This phenomenon is easier to understand if you look closely at the official definition of poverty, and compare that with what it really takes a family to live, factoring

in the actual costs of the basic expenses: rent, utilities, child care, transportation

to work, and of course, food. The fact is, parents aren’t earning enough to cover

these basic expenses and make ends meet without government assistance. And, unfortunately, government assistance has often been missing or inadequate. I would

like to talk today about what the Federal Government can do to help these struggling families.

Before I get to my recommendations, I would ask that you enter into the record

a story recently published in the Ford Foundation Report titled: ‘‘The Real Cost of

Living: Self-Sufficiency May be the Next Frontier for U.S. Welfare Reform.’’ Unlike

the Federal poverty guidelines, the Self-Sufficiency Standard is a precise measurement of how much income a family needs to manage without government assistance

or private help, taking into account actual, local costs for basic needs like adequate

housing, food that meets minimum nutrition levels, child care and transportation

to work.

The article features the story of a low-wage mother of two young children, working 50 hours per week at $8.50 per hour—or $18,000 a year—yet struggling to make

ends meet. Under the standard Federal poverty measurement, this young mother

is well over the threshold of $14,630 for a family of three. Yet she walked into her

local Catholic Charities agency in Allentown, Pennsylvania, for emergency food assistance. She would need to earn $14.98/hour—almost double her current wage—to

meet her family’s basic needs without assistance. This example illustrates precisely

the reason there is such a disconnect between the glowing accounts about reductions

in child poverty and unemployment in the past 5 years, and the actual struggles

of working parents who are truly living on the edge.

Addressing this growing disparity must be of primary concern to the Federal Government because, without government action, the situation will only get worse.

Throughout the 1980’s and 1990’s, the richest 1 percent of Americans saw their

wealth grow by an average of $414,000—an increase of 157 percent—while the poorest 20 percent of Americans saw their average wealth decrease by $100.1 While

58

those at the top of the economic ladder are thriving, working parents are finding

it impossible to provide for their families. As the U.S. Conference of Catholic

Bishops stated in its Pastoral Letter, Economic Justice for All:

The obligation to provide justice for all means that the poor have the single most

urgent economic claim on the conscience of the nation * * * to see a loved one sick

is bad enough, but to have no possibility of obtaining health care is worse. To face

family problems * * * can be devastating, but to have these lead to the loss of one’s

home and end with living on the streets is something no one should have to endure

in a country as rich as ours.

The poor cannot be helped only through private charitable giving or private volunteer efforts, though these are important components in any just society. Our Catholic teaching tells us that it is the also the responsibility of society, acting through

government, to assist and empower the poor, the disadvantaged, the disabled, and

the unemployed. The principle of subsidiarity is an important component of Catholic

social teaching, but it does not mean that the Federal Government should cede responsibility for the poor. Rather, the principle of subsidiarity acknowledges that

many challenges facing the poor are national in scope, will be beyond the capabilities of private charities, or even local and state governments, to address, and that

can best be remedied by Federal legislation. The factors that make it so difficult for

working parents to provide for their families—working for less than a living wage,

a shortage of affordable housing and quality child care, and a lack of access to

health care—are national problems that require a national solution.

RECOMMENDATIONS FOR REFORM

I. Congress should Increase the Minimum Wage

The most important change that the Federal Government should make to support

working families is to substantially increase the minimum wage, and index it for

inflation so that its buying power would not erode over time. Catholic social teaching tells us that raising the hourly minimum wage is not just an economic issue—

it’s a moral issue. In our Catholic teaching, all economic institutions have a responsibility to support the bonds of community and solidarity that are essential to

human dignity. In other words, paying a decent living wage provides more than

buying power; it recognizes the worth and humanity of our brothers and sisters, and

when private employers fail to meet this standard, government must step in.

Current proposals would raise the minimum wage $1.50 over 2 years. When implemented, this increase would give full-time workers an additional $3,120 per year

to help provide for their families. We would certainly welcome such a move, although even that increase is too little for families to exist solely on what they earn.

As a result, the Federal Government and the states have an obligation to provide

a variety of work supports that can bridge the gap between what working parents

can earn and what it really costs to live in dignity. Over the long term, Congress

should work steadily toward making the minimum wage a living wage.

II. Congress Should Enact Additional Work Supports for Low-Income Families

A. Affordable Housing for Low-Income Families

According to our member agencies, the number one problem of low-income families is the shortage of affordable housing. There is an affordable housing crisis in

this country. HUD reports that the number of families who pay more than half their

incomes for rent, live in severely substandard housing, or both, is at an all-time

high. In March 1999, HUD released a report titled Waiting in Vain: An Update on

America’s Rental Housing Crisis, which reported on families who endure waiting

lists for years before finding affordable housing. And the situation is not improving.

A report released last month by the National Housing Conference found that one

out of every seven American families—13 million in all—had a critical housing need

in 1999.

In October 1999, Catholic Charities of the Archdiocese of Chicago issued its own

statement on the lack of affordable housing for low-income families. The conclusions

in that paper are no different than what is being reported throughout the country:

a shortage of 153,300 low-income rental units in the Chicago area; average rents

of $736 per month, a difficult figure for a minimum wage family to afford; and rents

rising at nearly twice the rate of inflation. Out of that paper has developed a proposal that gets at the very heart of the housing crisis: the need for the Federal Government to do more to spur production of affordable housing stock. We have proposed a pilot project, building on the successful Section 202 program for the elderly,

to create new housing stock for low-income families. Under our proposal, the Federal Government would provide funding to faith-based organizations to produce and

maintain housing for low-income families. The housing would include supportive

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services for residents, ranging from job training to child care to parenting education.

This program is a model that can be replicated throughout the country to fill the

void left by private developers, who can make far more money building luxury and

vacation homes for high-income families than affordable housing for working families. Simply put, without proactive measures by the Federal Government, our housing crisis will never be solved.

B. Increase Resources for Child Care

Next to the lack of affordable housing, our local agencies report that that lack of

affordable, quality child care is a critical obstacle to success in retaining a job and

advancing in the workplace. While Congress recently increased the FY 2001 Child

Care and Development Block Grant (CCDBG) by a welcome $817 million, there are

still less than 20 percent of eligible children now receiving help. This is an increase

up from 10 percent, so we are moving in the right direction, but there is still a long

way to go.

There are a number of factors that make it difficult for low-income families to find

or afford quality child care. Parents lacking job experience or skills frequently have

to accept jobs on weekends or the night shifts, when office buildings need to be

cleaned or fast food positions need to be staffed. Child care during these non-traditional hours is woefully scarce, and parents often must turn to substandard substitutes. In addition, state subsidy rates are below the local fair market rates. Inadequate subsidies deprive parents of genuine options in choosing day care providers,

keep poor children out of existing quality child care programs, and limit providers’

ability to attract qualified staff with fairer salaries or improved benefits. Finally,

child care workers are seriously underpaid; the average salary is $14,000. These low

salaries, which often don’t include benefits, contribute to a high rate of staff turnover, which is difficult on the children in care. The inability to attract and retain

quality workers to care for our nation’s children is a problem that must be addressed. And, finally, there are not enough child care dollars to serve all who are

eligible for assistance.

We urge Congress to increase the FY 2002 CCDBG budget by $1 billion. This increase should be part of an annual Congressional commitment to narrowing the gap

between the children who receive CCDBG aid and the number who need it. And

CCDGB funds must be used to address the urgent need for more child care facilities

to provide non-traditional hours of service.

In addition, Congress should pass the ‘‘Child Care Quality Incentive Act’’ (H.R.

2097/S. 1000). This legislation, introduced in the House by Representative Sanford

Bishop and in the Senate by Senator Jack Reed, provides incentives for states to

increase quality, including tools to allow states to attract and retain qualified staff;

provide salary increases and benefits to child care workers; maintain healthy environments in child care centers; and purchase basic supplies and educational materials.2

I would add one additional note on this subject. Catholic Charities USA, along

with numerous other organizations, has long urged Congress to restore funding for

the social services block grant (SSBG), which provides a wide range of services to

the poorest and most vulnerable Americans. Programs funded under SSBG have

had to be scaled back in recent years, since Congress transferred part of the budget

authority for SSBG to Federal highway programs. The just-published SSBG Annual

Report on Expenditures and Recipients for 1999, reports that:

Twelve and a half million individuals in the country received services that were

funded at least partially by the SSBG * * * Child day care, with the support of

SSBG, served the largest number of recipients. Forty three states reported SSBG

expenditures for child day care; 2.62 million children received day care services supported at least partially by the SSBG. In other words, nearly half of all child recipients (6.8 million [54 percent] of all recipients of the 1999 SSBG) received child day

care services. Expenditures of $397 million for child day care, the largest category

of SSBG expenditures, accounted for 13 percent of all SSBG expenditures.

In light of this report, Congress should take steps to restore SSBG funding, in

addition to the reforms mentioned above, as a means of increasing access to affordable child care.

C. Increase Access to Health Care

Catholic Charities USA has long advocated for the adoption of universal health

coverage, which would allow all individuals to receive on-going, preventive care

when they are healthy, and necessary corrective care when they are ill. While we

realize that Congress is unlikely to consider proposals for universal coverage in the

107th Congress, we have been encouraged by statements made during discussions

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on a Patient’s Bill of Rights indicating that Congress should do more to help the

nearly 43 million individuals who currently lack health insurance.

In fact, Congress can take a significant step toward greater access to insurance

this year by expanding Medicaid and SCHIP to cover working parents and children

with disabilities. Many people mistakenly believe that families living at or below the

poverty level receive health care coverage through Medicaid. While that is true for

low-income children, the same can not be said for low-income parents. Indeed, a

study just released by Families USA found that 81 percent of low-income, uninsured

adults do not qualify for Medicaid or other public health coverage in their states.

The vast majority of the uninsured are in working families.3

The budget resolution recently approved by both houses of Congress provides $28

billion to spend on health care for the uninsured. This provision will be meaningless, however, if Congress does not pass authorizing legislation and appropriate the

funds. We hope that Congress will act soon to use this money to provide coverage

under Medicaid and SCHIP to working parents and pregnant women. This is particularly important in light of recent studies demonstrating that providing public

health coverage to parents leads to increased enrollment in public health programs

by their children. When parents are included in state health programs, their kids

benefit—often dramatically. As a study by the Center on Budget and Policy Priorities showed, states that expanded their public health programs to parents saw children’s participation rates increase significantly, from 51 percent to 67 percent, compared to an increase of 51 percent to 54 percent in states without similar expansions.4

We know that there is a clear correlation between lack of insurance and access

to health care. The uninsured have more difficulty obtaining primary care and access to essential medication, and have a higher rate of hospitalization for treatable

conditions such as hypertension, asthma or diabetes. It is simply unacceptable that

so many hard working Americans, whose daily labors make life easier for all of us,

must suffer the consequences that result from being uninsured.

While we are on the subject of health care, I would like to mention two areas of

health care that our agencies deal with quite frequently: substance abuse and mental health. According to the Office of National Drug Control Policy’s 2001 Annual

Report, more than five million individuals are in need of immediate treatment for

drug abuse, yet less than half of those individuals will receive it. Our agencies report the same sad story, frequently having clients for whom no treatment is available. This ‘‘gap’’ in treatment resources has significant negative consequences for society, including decreased family stability, lower worker productivity and higher

crime rates. We know that effective substance abuse treatment works. By devoting

additional resources to fund substance abuse treatment programs—and particularly

integrated treatment for individuals who suffer from both substance abuse and mental health disorders—Congress could help reduce the gap in unmet substance abuse

treatment needs.

Two bills pending before Congress would do just that. Representatives Charles

Rangel and Ben Cardin, and Senators Olympia J. Snowe and John D. Rockefeller,

have introduced H.R. 1909, the ‘‘Child Protection/Alcohol and Drug Partnership Act

of 2001’’ (H.R. 1909/S. 484). This legislation would provide funding to promote joint

activities among federal, state and local child welfare and alcohol and drug abuse

prevention and treatment agencies.5 Senators Orrin Hatch, Patrick J. Leahy, and

Joseph R. Biden have introduced S. 304, the ‘‘Drug Abuse Education, Prevention,

and Treatment Act of 2001,’’ which would provide additional Federal funds for programs ranging from jail-based substance abuse treatment to residential treatment

centers for women with children to treatment for persons living in rural states and

economically depressed communities.6

Similarly, we urge Congress to pass S. 543, the ‘‘Mental Health Equitable Treatment Act of 2001,’’ introduced by Senators Pete Domenici and Paul Wellstone.7 S.

543 will prevent group health plans from imposing different treatment limitations

and financial requirements on individuals suffering from mental illnesses than

those imposed on individuals suffering from physical illnesses. According to the Department of Health and Human Services, each year 56 million Americans experience

a diagnosable mental disorder, but only one in four adults and one in five children

receive necessary treatment. We know that when properly designed and administered, treatment for mental illness is every bit as effective as treatment for physical

illnesses. Yet, as a General Accounting Office report found last year, many insurers

continue to impose limits on mental health benefits that are more restrictive than

those for medical or surgical benefits.

Left untreated, mental illness can take a remarkable toll. The economic burden

of mental illness in the United States is $170 billion per year, yet the human cost

born by individuals suffering from such conditions, and on their families, cannot be

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estimated. Passage of S. 543 can help to ensure that individuals suffering from mental illness can receive the treatment necessary for them to live in dignity and lead

healthy, productive lives.

D. Strengthen Working Families

There are a number of other initiatives that would greatly contribute to the living

standards of the working poor. I would like to highlight three in particular, all of

which are included in S. 685, the ‘‘Strengthening Working Families Act,’’ introduced

in the Senate by Senators Evan Bayh and Olympia J. Snowe.8

First, S. 685 would promote responsible fatherhood by funding programs designed

to support and sustain marriage, encourage non-custodial parents to become more

involved in the lives of their children, and provide job training and other services

to help non-custodial parents contribute to the support of their children. As a general matter, children raised with the involvement of both parents develop fewer behavioral problems, perform better in school, and experience higher levels of sociability. In addition, children raised in two parent families are less likely to be raised

in poverty. For those reasons, we strongly support programs that seek to increase

the number of fathers who are involved in their children’s lives.

Second, the bill would allow states to ‘‘pass through’’ child support payments directly to custodial parents and their children. Under current law, a family receiving

cash assistance under the Temporary Assistance to Needy Families (TANF) program

is required to assign to the state its right to child support payments during the assistance period. This can be discouraging for non-custodial parents who pay support

for their children, only to see the money retained by the state instead. For families

that are struggling to become self-sufficient, child support payments can provide a

critical boost. Indeed, studies have shown that when households headed by single

mothers receive child support payments, their poverty rate drops from 33 percent

to 22 percent.9 By allowing for a child support pass through, Congress can ensure

that child support paid by non-custodial parents, primarily fathers, reaches the children who need it, and can give low-income families the help they need to succeed

without welfare.

And third, the bill would increase the Earned Income Tax Credit (EITC) for lowincome families with three or more children and simplify the EITC rules, thus improving taxpayer compliance and reducing error rates. The EITC is the only individual tax credit that provides a Federal payment when a filer’s tax credit exceeds income tax liability, lifting 2.6 million children out of poverty while encouraging work.

While middle income and affluent families get the full benefit of the personal exemption for all of their children, low-income working parents receive the EITC for

only a maximum of two children. Child poverty rates are significantly higher among

families with three or more children (28.6 percent) than families with two children

(12.4 percent).10 Given the EITC’s proven role in lifting families out of poverty, expanding the credit for families with more than two children is an important step

in addressing this problem. (The bill also restores the social services block grant,

an issue discussed in Section II.B. above.)

III. Congress Should Make TANF Work Better for Low-Income Families

Most low-income families are not receiving, and have never received, welfare benefits. Yet we cannot adequately address the problems of all low-income families if

we don’t consider the needs of parents who are struggling to make the transition

from welfare to work. In less than 1 month, we will observe the 5-year anniversary

of the creation of the Temporary Assistance to Needy Families Program (TANF). As

this anniversary approaches, pundits and policymakers will be debating whether

welfare reform has been a success or a failure. The answer to this question depends,

in large part, on what we define as success.

If the goal of welfare reform was to reduce welfare caseloads, it is difficult to

argue that TANF has not succeeded. Between 1994 and 1999, welfare caseloads

were cut in half. For many, that is all the proof they need that welfare reform has

worked.

If, however, the goal of welfare reform was to lift people out of poverty, and to

help them live their lives in dignity, the conclusion is not so simple. In 1994, Catholic Charities USA issued a position paper on welfare reform, titled Transforming the

Welfare System. In that paper, we made the point that there is a difference between

making people work, and making work pay. The reports we receive from our local

agencies underscore this point. They tell us that, while parents are leaving TANF

for work, the jobs they secure often keep them at or near the Federal poverty level.

And the longer they are off cash assistance, the more likely they are to lose the link

to a number of important income support programs, like food stamps or Medicaid,

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that can help them provide for their families. It is then that they turn to churches

and charities for help in making ends meet.

A recent editorial from the Chicago Tribune underscores the need for TANF to

provide more support to working families. The editorial references a recent audit

conducted by the state of Wisconsin—a state that has done more than many others

to support individuals leaving the welfare rolls for work—which found that less than

half of those who left the welfare for work in early 1998 earned enough to lift them

above the official Federal poverty threshold 3 years later.11 If that is what is happening to welfare leavers in one of the states doing the most to support work, it

is clear that more must be done. The upcoming reauthorization of TANF provides

us with a prime opportunity to make the program more supportive of working parents. Among our recommendations for the upcoming reauthorization are the following:

A. Poverty Reduction: First, actual poverty reduction should be made an official

purpose of the TANF program, and states should be given bonuses tied to poverty

reduction. We know from past experience that states respond to fiscal incentives

when they are written into Federal welfare law.

It is important that poverty reduction under TANF be calculated according to a

meaningful measure. We cannot evaluate poverty reduction using the Federal poverty guidelines. These guidelines are outdated, and no longer provide a useful measurement of what a family requires to live without assistance from government agencies or private charities. Federal poverty guidelines are based on the premise that

a family’s primary expense is food. Today’s families spend the bulk of their income

on housing and child care. Using the Federal poverty guidelines to measure poverty

reduction would allow states to collect rewards for reducing poverty without guaranteeing that more families can survive on what they earn. Poverty reduction measures should be based on progress toward a living wage, one that represents what

families need in their own communities to make ends meet.

B. Education and Training: Congress must find a way to ensure that families on

TANF have an opportunity to move up the wage ladder. Too often, parents leave

TANF for low-skill, low-paying positions that may never lead to a living wage. This

can be addressed by providing TANF parents with better access to continuing education—particularly post-secondary education—and job training programs. Numerous studies have shown that, for women leaving welfare, education beyond high

school is a key factor in moving up the economic ladder. Yet as a general rule,

TANF policies have not allowed recipients to pursue post-secondary educational activities. In light of the evidence demonstrating that better education leads to better

outcomes, it is counterproductive to put in place policies that discourage or fail to

support higher learning. Congress should take steps to encourage programs like

Maine’s ‘‘Parents as Scholars,’’ which stops the TANF clock while recipients pursue

post-secondary education. Wyoming also has a similar program in place.

C. Wage Supports: States should be provided with strong incentives to use TANF

funds to provide workers with wage supplements. These stipend payments can help

families meet work expenses or other needs that their minimum wage earnings are

insufficient to handle. Texas recently initiated a program to provide families with

stipends of at least $1200 per year to meet work expenses.

D. Transitional Benefits: While many families remain eligible for health care, food

and child care assistance, they have been losing these vital supports upon leaving

TANF, due to widespread confusion and the existence of numerous administrative

barriers. States should be required to automatically enroll families leaving TANF

for work for one full year in the Food Stamps Program, Medicaid, and child care

assistance programs.

Almost two-thirds of families leaving TANF do not receive food stamps in the 6

months after leaving welfare, although numerous studies show that most continue

to live below the poverty line and even more fall within the Food Stamp Program’s

income limit (130 percent of the poverty level). Many don’t realize they are still eligible, and the states don’t do a good job of telling them. Many can’t afford to take

a day off from their new jobs to go down to the welfare office and apply in person.

States should automatically provide the family with the same level of food stamp

benefits that it was receiving while on TANF for a period of 12 months. States

should not make it difficult for the family by imposing additional administrative requirements. The TANF computer should simply tell the Food Stamp computer that

this family is eligible, and the family should be issued an electronic benefit card or

food stamps.

Similarly, families leaving welfare for work are currently eligible for up to 1 year

of transitional Medicaid coverage, but they often aren’t getting it, for the same reasons they aren’t getting Food Stamps—they aren’t aware they are eligible, or they

aren’t able to satisfy burdensome requirements. Again, the TANF computer should

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simply see to it that the family leaving for work is issued a Medicaid card covering

all members of the family for a full year.

Finally, a parent’s ability to secure child care is a crucial factor in determining

whether the family will succeed in the transition from TANF; yet only 30 percent

of families leaving TANF receive child care assistance. As a condition of receiving

the Federal funds available each year through the Child Care Development Fund

block grant, Congress should require states to guarantee child care assistance to

families making the transition from TANF (and to make that guarantee known). Of

course, any Federal child care requirement would need to be accompanied by an increase in funding of the Child Care and Development Fund, and contain appropriate

safeguards to ensure that the guarantee of assistance to families leaving TANF does

not crowd out child care and other assistance to families currently on TANF.

E. Food Stamp Reform: In addition to providing transitional food stamp benefits,

states should be required to encourage working families to apply for food stamp benefits, and to simplify their application procedures so families can access the benefits

to which they are entitled. Working adults cannot afford to spend a full day at the

welfare office every few months, filling out a 26 page application, supplying 14 kinds

of verification, and enduring the condescension of the eligibility worker. To do so

is to risk not only a day’s wages, but also quite possibly a job. When you consider

that current rules in many states require working parents on food stamps to reapply

in person every 3 months, it is no wonder that less than half of eligible households

are participating in the program.

Families should be able to apply for food stamps by mail with income verified by

employers, if necessary, to avoid the necessity of losing time from work for an interview. States should also make efforts to develop and implement a comprehensive

communications strategy informing families that their food stamp eligibility is not

affected by the TANF time limits.

F. Restoration of Benefits For Legal Immigrants: Congress should also act to ameliorate some of the harshest provisions of the 1996 welfare law: those provisions barring legal immigrants who entered the country after August 22, 1996, from receiving

public benefits. At a minimum, Congress should restore eligibility for Medicaid,

SCHIP and food stamp benefits to legal immigrant children and pregnant women.

Under current law, pregnant women and children who are legal residents and arrived in the United States after August 22, 1996, are barred for 5 years from receiving Medicaid and SCHIP benefits. Pregnant women and sick children cannot wait

5 years to get the medical attention they need. The important goals of Medicaid and

SCHIP are undermined when states are not permitted to use Federal funds to provide preventive and other basic health care services to lawfully present immigrants.

Representatives Lincoln Diaz-Balart and Henry Waxman, and Senators Bob

Graham, Lincoln Chafee and John McCain have introduced the ‘‘Legal Immigrant

Children’s Health Improvement Act’’ (H.R. 1143/S. 582),12 which gives states the option to extend Medicaid and SCHIP benefits to these women and children. Congress

can lessen the chance that these children will develop long-term and chronic health

problems, and instead help guarantee that they can become productive members of

our society.

Similarly, a growing child’s need for adequate nutrition is not lessened merely because the child is a legal immigrant. The Food Stamp Program, by supplementing

the limited purchasing power of low-income households, helps to alleviate hunger

and malnutrition for poor individuals and their families. While our nation as a

whole is enjoying great prosperity, too many working families, including legal immigrant working families, have not shared in that prosperity. Their daily labors make

life easier for all of us, but their take-home pay is often insufficient to cover rent,

child care, clothing and transportation costs, and still have enough left to pay for

their food. Representative James T. Walsh, and Senators Edward M. Kennedy and

James M. Jeffords have introduced the ‘‘Nutrition Assistance for Working Families

and Seniors Act’’ (H.R. 2142/S. 583)13, which would restore Food Stamp benefits for

legal immigrants, among other provisions. Passage of the bill will ensure that these

working families can provide their children with the nutrition they need for healthy

development.

Efforts to restore Medicaid, SCHIP and Food Stamp benefits have broad bipartisan support and further basic notions of fairness and common sense. According to

the National Academy of Sciences, the average immigrant contributes $1,800 each

year more in taxes than he or she costs federal, state and local governments. Immigrants pay taxes to support services to others; they too should have access to assistance when they fall ill. In addition, the babies born to legal immigrant mothers will

automatically be U.S. citizens upon their birth and will immediately be eligible for

federally supported health care. As has been repeatedly demonstrated, the costs of

prenatal care and adequate nutrition for legal immigrant mothers will be offset by

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reduced Medicaid costs for their babies. Indeed, the U.S. saves $3 for every $1 it

spends on prenatal care. Even more important, these newest little citizens should

get a healthy start in life.

IV. Congress Should Address the Needs of Undocumented Workers, and Enforce Fair Labor Standards for all Workers

Before I conclude, I would like to say a few words about segment of low-income

working families that is all too often overlooked: undocumented workers. According

to a study conducted by the Urban Institute, more immigrants entered the United

States in the 1990’s (roughly eleven million people) than in any decade ever. These

newcomers have helped to fuel and sustain an unprecedented growing American

economy. However, according to this same study, in 1999, 21.3 percent of foreignborn non-citizens lived below the Federal poverty level, compared to 11.2 percent

of those of us who are native-born Americans.

The millions of workers who come to this country without documents have not

done so on a lark. They have risked paying the ultimate penalty to come to America

and work for sub-minimum wages, in inhumane conditions, just so that their children and their families can have a chance at survival. They are often openly welcomed by businesses, as they are willing to perform tasks that you or I would turn

our noses up at. Indeed, everyone in this room has a better quality of life because

of their presence.

Despite their contributions to our society, non-citizen immigrants are allowed to

live in poverty and are exploited at every possible opportunity. Along with subsistence-level wages, our local Charities agencies all across the country tell us that the

non-citizen immigrant families they serve are subjected to poor housing conditions,

a high level of hazardous working conditions, and a lack of affordable health care.

Most of these injustices can be effectively dealt with if these non-citizen immigrants

were allowed to become legal permanent residents and work legally in this country.

Such a move would allow them to be covered by wage and hour laws.

CONCLUSION

In conclusion, I want to thank this Committee for focusing attention on the growing problem of working families who simply aren’t able to make ends meet. It does

not seem right that families who work hard and play by the rules remain unable

to save money for their children’s college education, to buy their own home, or to

otherwise pursue the American dream, because they are too busy trying to keep the

wolf from the door. For these families, the daily dilemmas they face are ones that

are foreign to most on this Committee: Will I pay the heating bill, or buy clothes

for my children? Will I pay the rent, or fix the car I need to get to work? Do I go

to see a doctor for my nagging illness, when I know I will need that money to buy

food? But as workers at Catholic Charities agencies throughout the country can tell

you, these dilemmas are all too real.

It is our hope that today’s hearing will lead to enactment of proposals that will

address the growing disparity between rich and poor, and give low-income workers

the help they need to not only survive, but to thrive.

FOOTNOTES

1 ‘‘Pathbreaking CBO Study Shows Dramatic Increases in Income Disparities in 1980’s and

1990’s: An Analysis of CBO Data,’’ Isaac Shapiro, Robert Greenstein, and Wendell Primus, Center on Budget and Policy Priorities, Revised May 31, 2001. 2 H.R. 2097 currently has 60 cosponsors, while S. 1000 has 5 cosponsors.

3 ‘‘The Health Care Safety Net: Millions of People Left Uninsured,’’ a report of Families USA,

July 2001 4 ‘‘The Importance of Family-Based Insurance Expansions: New Research Findings about State

Health Reforms,’’ Leighton Ku and Matthew Broaddus, Center on Budget and Policy Priorities,

September 4, 2000. 5 Representatives William J. Coyne, Sander M. Levin, Robert T. Matsui, Michael R. McNulty,

Pete Stark and Karen L. Thurman have cosponsored H.R. 1909; Senators John B. Breaux,

Susan M. Collins, Michael DeWine, Christopher J. Dodd, Bob Graham, James M. Jeffords, John

F. Kerry, Mary L. Landrieu and Blanche L. Lincoln have cosponsored S. 484. 6Senators Mike DeWine, Dianne Feinstein, Bob Graham and Strom Thurmond are cosponsors

of S. 304. There is not yet a companion bill in the House of Representatives. 7There are 48 additional cosponsors of S. 543. There is not yet a companion bill in the House

of Representatives. 8Senators John B. Breaux, Thomas R. Carper, Hillary Rodham Clinton, Christopher J. Dodd,

Bob Graham, Tim Johnson, Herb Kohl, Mary L. Landrieu, Joseph I. Lieberman, Blanche L. Lincoln and John D. Rockefeller IV are cosponsors of S. 685 9Testimony of Vicki Turetsky, Senior Staff Attorney, Center for Law and Social Policy, before

the Subcommittee on Human Resources, Committee on Ways and Means, U.S. House of Representatives, May 18, 2000.

65

10 ‘‘Should EITC Benefits be Enlarged for Families with Three or More Children,’’ Center on

Budget and Policy Priorities, July 10, 2000. 11 ‘‘The Future of Welfare Reform,’’ The Chicago Tribune, July 30, 2001 12 H.R. 1143 has 89 additional cosponsors, while S. 582 has 20 additional cosponsors. 13 H.R. 2142 has 32 cosponsors, while S. 583 has 14 additional cosponsors.

Chairman NUSSLE. Now we will turn to LaVerne Hewlett. The

reason I introduced you as ‘‘Mom’’ is because you may not know

this, but 7 months ago I got a fancy new title here around Congress

called Chairman, and while I am very honored to be the Chairman

of this committee, the most important title I carry around is Dad,

and I will keep that one for a lifetime. In fact, Mrs. Clayton has

designs to maybe not let me be Chairman much more in the next

session, so I may not be able to keep that title much longer——

Mrs. CLAYTON. You found that out.

Chairman NUSSLE. I found that out, yes. But I will keep that

title for quite a while, and it is the reason that I am proud of my

kids and that title, and that is why I introduced you that way. And

you have a lot to tell us. I think this is your first time to testify

before Congress. Please don’t worry about that. We are very anxious to hear what you have to say, and as I said, your whole testimony will be part of the record, but you can tell us what is on your

mind in the time that you have. So welcome, and we are very interested in hearing from you.

Ms. HEWLETT. Thank you.

Chairman NUSSLE. If you could pull the microphone up closer to

you, that way we can hear you.

STATEMENT OF LA VERNE HEWLETT

Ms. HEWLETT. Good afternoon, my name is LaVerne Hewlett. I

appreciate the chance to speak with you. I live in Emmitsburg,

Maryland, which is in Frederick County, the northwestern part of

the State. I am a single parent of a 1-year-old son, Kahlil. I also

have two older children, 18 and 21, who are working and living on

their own in Virginia.

Since September of 2000, I have worked in the kitchen and dining room of Mount St. Mary’s College in Emmitsburg. I work Sunday through Thursday, 11 a.m. to 8:30 p.m., and earn $7 an hour.

I received cash assistance benefits from Maryland between May

and September of last year while I was pregnant, and shortly after

the birth of my son. So far, I haven’t gotten any child support from

my son’s father.

In order to work, I have to pay for child care. The cost of child

care for my son is my largest monthly expense. Approximately 40

percent of my income goes to child care. I pay $500 per month for

child care: $400 for the sitter who watches Kahlil Monday through

Thursday, and $100 for the sitter who watches him on Sunday.

It is very hard to find a babysitter to watch Kahlil on Sunday.

Most sitters are only available Monday through Friday. I do not get

a child care subsidy, because neither of my child’s day care providers is licensed by the State. There are no providers available in my

area, and licensed day care providers who work out of their home

have a 6- to 12-month waiting period. And the only child care center in the community has a 2-year waiting list. I was getting a

$100 a month subsidy from the State to cover Sunday costs with

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a licensed sitter, but because she is no longer working weekends,

I have lost that subsidy.

I appreciated the subsidy I got for weekend care because it really

helped. When people leave government assistance and get jobs, a

child care subsidy can really make a big difference. There are too

few licensed providers, and many parents like myself will have to

go without the subsidy; hence, returning to government assistance.

Something needs to be done to increase the number of licensed

providers, including possibly providing more support and training

to people like myself who would possibly be interested in becoming

providers, helping other mothers and themselves.

I have been a bit more fortunate with my rent. I live in a lowincome housing building and only pay $223 per month. Without

that assistance my rent would be $528. With the child care expenses that I have, I would not be able to pay rent. I know of other

parents in my area who are not as fortunate, and I feel real bad

for them. This waiting list with Section 8 is very long. It can be

anywhere from 1 year to 10. I know some areas where it is as high

as 5.

Many landlords are very reluctant to rent to low-income parents

who don’t have a voucher because they are worried their rent won’t

get paid. Then there are others who refuse to rent to voucher holders. Hopefully when my son is 2 or 3 years older, I could like to

move to the city of Frederick where child care facilities and public

transportation is more available.

I would like to also continue my education, preferably in geriatric

care. The cost of housing would be a big barrier, but I am hoping

with this committee’s assistance, that wouldn’t be too much of a

barrier for me. I hope that the programs that provide child care

subsidies, housing assistance, and other programs to support working families not only continue but expand to help the many working parents out there like myself. Thank you.

Chairman NUSSLE. Thank you.

[The prepared statement of LaVerne Hewlett follows:]

PREPARED STATEMENT OF LAVERNE HEWLETT, A SINGLE MOTHER FROM

EMMITSBURG, MD

Good morning. My name is LaVerne Hewlett. I appreciate this chance to speak

with you today. I live in Emmitsburg, Maryland, which is in Frederick County in

the northwest part of the state. I am a single parent of a 1-year old son, Kahlil.

I also have two older children, 18 and 21, who are working and living on their own

in Virginia.

Since September of 2000, I have worked in the kitchen and dining room of Mt.

St. Mary’s College in Emmitsburg. I work Sunday through Thursday, 11 a.m. to

8:30 p.m. and earn $7 an hour. I received cash assistance benefits from Maryland

between May and September of last year while I was pregnant and shortly after

the birth of my son. So far, I haven’t gotten any child support from my son’s father.

In order to work, I have to pay for child care. The cost of child care for my son

is my largest monthly expense. I pay $500 per month for child care; $400 for the

sitter who watches Kahlil Monday through Thursday and $100 for the sitter who

watches him on Sunday. It is very hard to find a babysitter to watch Kahlil on Sunday—most babysitters are only available Monday through Friday.

I do not receive a child care subsidy because neither of my child care providers

is licensed by the state. There are no licensed providers available in my area. Licensed day care providers who work out of their home have a six to twelve month

waiting list, and the only child care center in my community has a 2-year waiting

list. I used to get a $100 per month subsidy from the State to cover the costs of

child care on Sundays because I used to have a weekend babysitter who was liVerDate 11-MAY-2000 14:28 Feb 09, 2002 Jkt 000000 PO 00000 Frm 00070 Fmt 6633 Sfmt 6621 H:\DOCS\HEARINGS\107-16\HBU213.000 HBUDGET1 PsN: HBUDGET1
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censed. She stopped offering weekend care and the new sitter is not licensed, so I

lost that subsidy.

I appreciated the subsidy that I got for my weekend care—it really helped. When

people leave government assistance and get a job, a child care subsidy can make

a big difference, but when there are too few licensed providers, many parents like

myself have to go without the subsidy. Something needs to be done to increase the

number of licensed providers, including providing more financial support and training to people who want to be family day care providers.

I have been more fortunate with my rent. I am in public housing through the Sec- tion 8 housing program and pay $223 per month for rent. Without the Section 8

program, my apartment would cost $528 per month. With the child care expenses

I have, I could not make ends meet on my earnings if I had to pay that full rent.

I feel badly for other parents I know in this community who are paying much higher

rents because the waiting list for Section 8 is also very long. Many landlords are

reluctant to rent to lower-income parents who don’t have a Section 8 voucher because they are worried the rent won’t be paid. Other landlords refuse to accept the

vouchers.

When my son is two or 3 years older, I would like to move to the city of Frederick,

where child care facilities and public transportation are more available. I think I

could get a job there and I would like to continue my education in the area of geriatric care. But the cost of housing could be a big barrier in my being able to make

that move. I hope that the programs that provide child care subsidies, housing assistance and other programs to support working families not only continue, but expand to help the many working parents out there like myself. Thank you for the

opportunity to share this with you today.

Chairman NUSSLE. Our final witness is Robert Rector, who is a

senior research fellow from the Heritage Foundation. Welcome.

STATEMENT OF ROBERT RECTOR

Mr. RECTOR. Thank you for having me here today and giving me

the opportunity to testify. I would like to talk today about welfare

in the budget and its relationship to poverty. In talking about welfare, I will be talking about all means-tested or income-tested programs run by the Federal Government.

The simple fact of the matter, that you would not gather by this

hearing, is that means-tested welfare spending in the United

States is now at a record high. Last year we spent $434 billion on

programs to aid the poor. That is roughly 4 percent of the gross domestic product, and it amounts to around $5,600 for each taxpaying family in the United States. Of that aggregate expenditure,

about half of that goes to the elderly and the disabled and about

half of it goes to families with children.

When we look at the part that goes to families with children,

which is around $200 billion last year, we find that overwhelmingly

this goes to subsidies to single-parent families where there is only

one mother in the home and there is no married father in the

home.

Overall, the welfare system as it affects children in the United

States is predominantly or almost exclusively a subsidy system to

support single parenthood. The welfare system as it affects children

exists predominately or almost totally because of the collapse of

marriage which has occurred since the mid-1960’s. If this collapse

had not occurred, the welfare state as we currently understand it,

as well as most of the social problems we have talked about today,

simply would not exist.

It is important to look at growth of this welfare spending. Since

Lyndon Johnson launched the war on poverty in 1965, the total

amount that we have spent each year aiding the poor, after adjusting for inflation, has increased tenfold. We are spending 10 times

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as much now each year as we did when the war on poverty began.

And that rapid growth in spending has gone on right through the

1990’s. Today, in the year 2000 or 2001, we are spending 60 percent more after adjusting for inflation than we were back in 1990

at the beginning of the decade.

One of the most remarkable things about this continuing growth

of spending is how rarely this huge increase in expenditure and

commitment is acknowledged in any of the public debate. Moreover, welfare spending, according to the President’s submitted and

proposed budget, will continue to grow at a very rapid rate for the

next 5 to 6 years. Under the President’s budget, aggregate spending will rise from some $430 billion this year to $626 billion in the

year 2006. That is a 40 percent increase, an increase of roughly 6

percent per annum, well above the rate of inflation.

According to the President’s budget, our Nation will spend $3.6

trillion on means-tested aid to assist the poor over the next 5 years.

Let me repeat that. According to the President’s proposed budget,

we are going to spend $3.6 trillion, a record amount of expenditure,

aiding the poor over the next 5 years. This amounts to some

$47,000 per taxpaying household in the United States.

I often think when I listen to witnesses before this committee

and other committees, exactly how much is enough? If $47,000 per

taxpaying household in the United States is not enough to assist

the poor, how much do we require? $50,000 per tax paying household, $60,000 or $70,000?

The fact of the matter is that the problem in welfare is not a lack

of spending. The problem is the way that we spend this money and

the fact that this spending encourages dysfunction rather than productive behavior.

Another important way to look at our spending is to compare the

welfare budget in the United States compared to the defense budget. This year, today, we are spending $1.45 on welfare for every

single dollar we spend on defense. According to the President’s

budget, by the year 2006 that ratio will rise to $1.78 for meanstested aid for every $1 spent on defense.

Part of this hearing is a concern for poverty and the effects of

welfare reform, and I would briefly like to just run down those

facts before you today. Since the enactment of welfare reform, welfare dependence, which is shown on this chart nearest to me on the

red line, has declined some 50 percent. Employment of never-married mothers who are the core of the welfare-dependent population

has increased 40 percent. I would recommend to this committee to

look at the research by Dr. June O’Neil, former CBO director, who

shows that the bulk of that increase in employment is the result

of welfare reform and not the economy.

Most importantly, poverty has dropped dramatically. The black

child poverty rate in the United States is now at the lowest point

in our Nation’s history. The poverty rate of children living with single mothers is now at the lowest rate in our Nation’s history, and

the percentage of births that are outside of marriage after rising

steadily for 40 years, has tapered off and now is actually fairly

level. In fact, among black households, the out-of-wedlock birth

rate is actually falling slightly.

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Child poverty in the United States is caused by two main factors:

a lack of work and a lack of marriage. Although you hear about the

working poor family, in fact poverty among families where there is

a full-time, full-year worker is very, very rare.

Although there is work among families with children that are

poor, in general it averages about 1,000 hours per year. They are

either working about half time, or they are not working half of the

year. If you want to decrease poverty in this group, it is very important that you have to increase the amount of work being performed.

Therefore, I think that the policies that we look at in the future

must recognize that the traditional war on poverty which focused

on one-way handouts, predominately to nonworking single mothers,

has been a huge failure. It has increased poverty, increased dependents, and it has crippled the lives of millions of children. We

need to end one-way handouts and increase the work requirements

in the TANF program as well as in food stamps and in public housing.

Secondly and most importantly, we need to dramatically increase

marriage in the United States, and I would simply commend to this

committee the example of one of the excellent programs that exist

in this. It is a little program called PREP. PREP is a very inexpensive program. In over seven different scientific evaluations, PREP,

which requires about 10 hours of training of couples in relationship

skills, has been shown to improve the quality of those relationships

and reduce the divorce rate among those individuals by 50 percent.

I have talked to the originator of this program, and he said that

the program would also be applicable to cohabiting couples or couples who are not yet married, to enable them to improve the relationships between men and women and enter marriage and sustain

strong marriages. There is nothing that we could do to have a

greater impact on poverty in the United States than to take some

tiny fraction of our current welfare spending and allocate it to programs like that, with the intention of raising the marriage rate,

bringing down this huge out-of-wedlock childbearing rate which affects 1 child in 3 in our country. There is nothing better we could

do to reduce poverty, and there is nothing better we could do for

the well-being of the American children, and I hope we will take

that step in the future.

Chairman NUSSLE. Thank you very much.

[The prepared statement of Robert Rector follows:]

PREPARED STATEMENT OF ROBERT RECTOR, SENIOR RESEARCH FELLOW, THE

HERITAGE FOUNDATION

INTRODUCTION

The U.S. welfare system may be defined as the total set of government programs—Federal and state—that are designed explicitly to assist poor and low-income Americans. Nearly all welfare programs are individually means-tested.1

Means-tested programs restrict eligibility for benefits to persons with non-welfare

income below a certain level. Individuals with non-welfare income above a specified

cutoff level may not receive aid. Thus, Food Stamp and Temporary Assistance to

Needy Families (TANF) benefits are means-tested and constitute welfare, but Social

Security benefits are not.

The current welfare system is highly complex, involving six departments: HHS,

Agriculture, HUD, Labor, Treasury, and Education. It is not unusual for a single

poor family to receive benefits from four different departments through as many as

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six or seven overlapping programs. For example, a family might simultaneously receive benefits from: TANF, Medicaid, Food Stamps, Public Housing, WIC, Head

Start, and the social service block grant. It is therefore important to examine welfare holistically. Examination of a single program or department in isolation is invariably misleading. The views that I express in this testimony are my own, and

should not be construed as representing any official position of the Heritage Foundation. In addition, the Heritage Foundation does not endorse or oppose any legislation.

THE COST OF THE WELFARE SYSTEM

The Federal Government currently runs over 70 major interrelated, means-tested

welfare programs, through the six departments mentioned above. State governments

contribute to many Federal programs, and some states operate small independent

programs as well. Most state welfare spending is actually required by the Federal

Government and thus should considered as an adjunct to the Federal system. Therefore, to understand the size of the welfare state, Federal and state spending must

be considered together. (A list of individual welfare programs is provided in Appendix B.)

Total Federal and state spending on welfare programs was $434 billion in FY

2000. Of that total, $313 billion (72 percent) came from Federal funding and $121

billion (28 percent) came from state or local funds. (See Chart 1.)

Welfare spending is so large it is difficult to comprehend. On average, the annual

cost of the welfare system amounts to around $5,600 in taxes from each household

that paid Federal income tax in 2000. Adjusting for inflation, the amount taxpayers

now spend on welfare each year is greater than the value of the entire U.S. Gross

National Product at the beginning of the 20th century.

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The combined Federal and state welfare system now includes cash aid, food, medical aid, housing aid, energy aid, jobs and training, targeted and means-tested education, social services, and urban and community development programs.2 As Table

One shows, in FY2000:

• Medical assistance to low income persons cost $222 billion or 51 percent of total

welfare spending.

• Cash, food and housing aid together cost $167 billion or 38 percent of the total.

• Social Services, training, targeted education, and community development aid

cost around $47 billion or 11 percent of the total.

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RECIPIENTS OF WELFARE SPENDING

As Chart 2 shows, nearly half (46 percent) of total means-tested welfare spending

goes to families with children. Of the welfare spending going to families with children, roughly one quarter goes to married couples with children, while three quarters go to single parents and other broken families. Thus single parent and other

broken families with children receive some 34 percent of aggregate means-tested

aid. Overall families with children received some $200 billion in welfare aid in

FY2000 of which roughly $148 billion went to single parent or other broken families.

The other half (54 percent) of means-tested aid goes mainly to the elderly and the

disabled. Some 19 percent of total welfare spending goes to the elderly, while another 35 percent goes to non-elderly adults; the bulk of these individuals are disabled.

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THE GROWTH OF WELFARE SPENDING

As Chart 3 shows, throughout most of U.S. history welfare spending remained

low. In 1965 when Lyndon Johnson launched the War on Poverty, aggregate welfare

spending was only $8.9 billion. (This would amount to around $42 billion if adjusted

for inflation into today’s dollars.)

Since the beginning of the War on Poverty in 1965, welfare spending has exploded. The rapid growth in welfare costs has continued to the present.

• In constant dollars, welfare spending has risen every year but four since the

beginning of the War on Poverty in 1965;

• As a Nation, we now spend ten times as much on welfare, after adjusting for

inflation, as was spent when Lyndon Johnson launched the War on Poverty. We

spend twice as much as when Ronald Reagan was first elected.

• Cash, food, housing, and energy aid alone are nearly seven times greater today

than in 1965, after adjusting for inflation;

• As a percentage of Gross Domestic Product, welfare spending has grown from

1.2 percent in 1965 to 4.4 percent today.

Some might think that this spending growth merely reflects an increase in the

U.S. population. But, adjusting for inflation, welfare spending per person is now at

the highest level in U.S. history. In constant dollars, it is seven times higher than

at the start of the War on Poverty in the 1960’s.

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TOTAL COST OF THE WAR ON POVERTY

The financial cost of the War on Poverty has been enormous. Between 1965 and

2000 welfare spending cost taxpayers $8.29 trillion (in constant 2000 dollars). By

contrast, the cost to the United States of fighting World War II was $3.3 trillion

(expressed in 2000 dollars). Thus, the cost of the War on Poverty has been more

than twice the price tag for defeating Germany and Japan in World War II, after

adjusting for inflation.

WELFARE SPENDING IN THE NINETIES

Welfare spending has continued its rapid growth during the last decade. In nominal dollars (unadjusted for inflation), combined Federal and state welfare spending

doubled over the last 10 years. It rose from $215 billion in 1990 to $434 billion in

2000. The average rate of increase was 7.5 percent per year. Part of this spending

increase was due to inflation. But, even after adjusting for inflation, total welfare

spending grew by 61 percent over the decade.

As Chart 3 showed, medical spending (mainly in the Medicaid program) grew

most rapidly during the 1990’s, but welfare cash, food, and housing spending grew

as well. Adjusting for inflation, cash, food and housing assistance is 37 percent higher today than in 1990. However, the growth in these programs has slowed since

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1995, increasing no faster than the rate of inflation. This recent slowdown in spending is, in part, the effect of welfare reforms enacted in mid-nineties.

FUTURE WELFARE SPENDING GROWTH

Under President George W. Bush’s proposed budget, means-tested spending will

grow at a rapid rate. Indeed, the rate of welfare spending growth in the Bush budget is virtually identical to that projected in the last Clinton budget. Projected welfare spending figures from the President’s FY2002 budget are provided in Appendix

A.3 The rapid of growth in welfare spending is illustrated in Chart 4.4

Clearly, President Bush’s budget plan does not require cuts in welfare spending

or even a slowdown in the rate of spending growth. According to the current spending proposals:

• Total Federal welfare spending is projected to grow from $316 billion in 2000

to $450 billion in 2006: an increase of 42 percent. The rate of spending increase is

projected at 6 percent per year.

• Federal spending on cash, food, and housing aid is projected to grow from $142

billion to $174 billion: an increase of 23 percent. The annual rate of spending increase would be 3.6 percent, nearly 50 percent greater than the anticipated rate of

inflation.

• Together, Federal and state welfare spending would rise from around $438 billion in 2000 to $626 billion in 2006.

• Altogether, the United States will spend $3.6 trillion on means-tested welfare

assistance over the next 5 years. This amounts to around $47,000 for each taxpaying household in the U.S.

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WELFARE AND DEFENSE

The rapid projected rate of growth of future welfare spending can be illustrated

by comparing welfare to defense. The President has promised to make defense

spending a priority. Under his budget plan, nominal defense outlays would increase

for the first time in a half decade. Defense spending would rise by 20 percent over

5 years from $301 billion in FY2000 to $362 billion in FY2006.

During the same period, however, welfare spending is scheduled to rise by 42 percent. As Chart 5 shows, the gap between welfare and defense spending will actually

broaden during this period. Currently, the U.S. spends $1.45 on welfare for every

$1.00 spent on national defense; by 2006, we will spend $1.78 on welfare for every

$1.00 on defense.

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EXAGGERATED VIEWS OF POVERTY

Welfare spending advocates often paint very alarming pictures of poverty in the

United States in order to promote even more rapid increases in welfare spending.

To the average voter and the average politician, the term poverty provokes images

of destitution. In reality the typical ‘‘poor’’ person in the U.S. has standard of living

far higher than our normal images and expectations for poverty.

According to the government’s own data, the typical American, defined as poor by

the government, has a refrigerator, a stove, a clothes washer, a car, air conditioning,

a VCR, a microwave, a stereo and a color TV. (Half of the poor own two color TV’s;

a third have telephone answering machines.) By his own report, the typical poor individual is able to obtain medical care for himself and his family; he lives in a home

that is in good repair and is not over-crowded. By his own report, his family is not

hungry and in the last year he had sufficient funds to meet his essential needs.

While this poor individual’s life is certainly far from opulent, it is equally far from

the popular images of poverty conveyed by activists and the press.

WELFARE REFORM AND THE POOR

In 1996, Congress enacted a limited welfare reform; The Aid to Families with Dependent Children (AFDC) program was replaced by the Temporary Assistance to

Needy Families (TANF) program. Critically, a certain portion of AFDC/TANF recipients were required to engage in job search, on the job training, community service

work, or other constructive behaviors as a condition for receiving aid. The effects

of this reform have been dramatic.

• AFDC/TANF caseloads have been cut nearly in half.

• TANF outlays have fallen substantially. (See chart 6.)

• The decline in the TANF caseload has led to a concomitant decline in Food

Stamp enrollments and spending.

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79

While critics predicted the reform would increase child poverty, the exact opposite

has occurred. Once mothers were required to work or undertake constructive activities as a condition of receiving aid they left welfare rapidly.

• Employment of never-married single mothers has increased nearly 50 percent;

• The child poverty rate fell sharply from 20.8 percent in 1995 to 16.3 percent

in 2000.

• The black child poverty rate and the poverty rate for children living with single

mothers are both at the lowest points in U.S. history.

• When non-cash welfare aid such as the Earned Income Tax Credit, Food

Stamps, and public housing are properly counted as income, the child poverty rate

stands at 11 to 12 percent.

In the welfare reform of 1996 all sides came out as winners: taxpayers, society

and children. By requiring welfare mothers to work as a condition of receiving aid,

welfare costs and dependence were reduced. Employment increased and poverty fell.

Moreover, research shows that prolonged welfare dependence itself is harmful to

children; reducing welfare use and having working adults in the home to serve as

role models for children will improve those children’s prospects for success later in

life.

The workfare principles of the 1996 reform should be intensified and expanded.

Work requirements in TANF should be strengthened. Similar work requirements

should be established in the Food Stamp and public housing programs. Finally, beVerDate 11-MAY-2000 14:28 Feb 09, 2002 Jkt 000000 PO 00000 Frm 00083 Fmt 6633 Sfmt 6621 H:\DOCS\HEARINGS\107-16\HBU213.000 HBUDGET1 PsN: HBUDGET1
80

cause the reform has clearly succeeded in cutting welfare use, TANF outlays should

be reduced by 10 percent in future years.

WELFARE SPENDING AND THE COLLAPSE OF MARRIAGE

As noted previously, about half of all means-tested welfare spending is devoted

to families with children. Of this spending on children, around three quarters goes

to single parent families. For example, Chart 7 shows the percent of aid to children

in major welfare programs which flows to single parent families. The single parent

share is generally well above 80 percent.

Clearly, the modern welfare state, as it relates to children is largely a support

system for single parenthood. Indeed, without the collapse of marriage which began

in the mid-1960’s, the part of the welfare state serving children would be almost

non-existent.

The growth of single parent families, fostered by welfare, has had a devastating

effect on our society. Today nearly one third of all American children are born outside marriage. That’s one out-of-wedlock birth every 35 seconds. Of those born inside marriage, a great many will experience their parents’ divorce before they reach

age 18. Over half of children will spend all or part of their childhood in neverformed or broken families.

This collapse of marriage is the principal cause of child poverty and a host of

other social ills. A child raised by a never-married mother is seven times more likely

to live in poverty than a child raised by his biological parents in an intact marriage.

Overall, some 80 percent of child poverty in the U.S. occurs to children from broken

or never-formed families. In addition, children in these families are more likely to

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become involved in crime, to have emotional and behavioral problems, to be physically abused, to fail in school, to abuse drugs, and to end up on welfare as adults.

Since the collapse of marriage is the predominant cause of child-related welfare

spending, it follows that it will be very difficult to shrink the future welfare state

unless marriage is revitalized. Policies to reduce illegitimacy, reduce divorce and expand and strengthen marriage will prove to be by far the most effective means to:

• reduce dependence;

• cut future welfare costs;

• eradicate child poverty; and,

• improve child well-being.

Tragically, current government policy deliberately ignores or neglects marriage.

For every $1,000 which government currently spends subsidizing single parents,

only one dollar is spent attempting to reduce illegitimacy and strengthen marriage.

Fortunately, President’s Bush’s budget plan does propose a new program to ‘‘promote responsible fatherhood.’’ This proposed program could become the seedbed for

a broad array of new initiatives to strengthen marriage. Still, the money requested

is pitifully small: only $64 million per year. This amounts to roughly one penny for

each one hundred dollars in projected welfare spending. The budget allocation to the

new fatherhood program in FY 2002 should be increased fivefold with the funds diverted from TANF outlays. Beyond FY 2000 some 5 to 10 percent of Federal TANF

funding should be devoted to pro-marriage activities.

CONCLUSION

When Lyndon Johnson launched the War on Poverty he did not envision an endless growth of welfare spending and dependence. If Johnson returned today to see

the size of the current welfare state he would be deeply shocked.

President Johnson’s focus was on giving the poor a ‘‘hand up’’ not a ‘‘hand out.’’

In his first speech announcing the War on Poverty, Johnson stated, ‘‘the war on poverty is not a struggle simply to support people, to make them dependent on the generosity of others.’’ Instead, the plan was to give the poor the behavioral skills and

values necessary to escape from both poverty and dependence. Johnson sought to

address the ‘‘the causes, not just the consequences of poverty.’’

Today, President Johnson’s original vision has been all but abandoned. We now

have a clear expectation that the number of persons receiving welfare aid should

be enlarged each year, and that the benefits they receive should be expanded. This

expectation is clearly reflected in the future spending projections in Appendix A.

Any failure to increase the numbers of individuals dependent on government and

the benefits they get is regarded as mean spirited.

Yet the expansion of the conventional welfare system is destructive. More than

twenty years ago, then President Jimmy Carter stated, ‘‘the welfare system is antiwork, anti-family, inequitable in its treatment of the poor and wasteful of the taxpayers’ dollars.’’ President Carter was correct, yet today little has changed except

that the welfare system has become vastly larger and more expensive.

This expansion of welfare spending has harmed rather than helped the poor. Instead of serving as a short-term ladder to help individuals climb out of the culture

of poverty, welfare has broadened and deepened the culture of self-destruction and

trapped untold millions in it.

Rather than increasing conventional welfare spending year after year, we should

change the foundations of the welfare system. Policy makers should embrace three

basic goals.

1. We should seek to limit the future growth of aggregate means-tested welfare

spending to the rate of inflation or slower.

2. We should require all able-bodied welfare recipients to perform community

service work as a condition of receiving aid along the lines of the TANF program

operating in Wisconsin.

3. We should support programs which foster and sustain marriage rather than

subsidizing single parenthood. In addition, we should reduce the anti-marriage penalties implicit in the welfare system.

These three goals are synergistic. They will operate in harmony and reinforce

each other. In the long run, it will be difficult to control welfare spending merely

by cutting funding. Rather, if we change the behaviors of potential recipients we will

reduce the need for future aid. As the need for aid diminishes, spending growth will

slow and then decline, and the well being of the poor and society as a whole will

rise.

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FOOTNOTES

1 A very small number of the programs listed in Appendix B are targeted to low income communities rather than low income individuals. While such programs are not formally means-tested, they should be considered part of the overall welfare system. Only a small fraction of aggregate welfare spending is provided through such programs. 2 Appendix B provides a list of the major Federal and state welfare programs covered in this

testimony. 3Projected outlay figures taken from Office of Management and Budget, Budget of the United

States Government: Fiscal Year 2002, (Washington, D.C.: U.S. Government Printing Office,

2002). Table 22-2, pp.180-190. 4The outlay figures in Appendix A are less detailed than the past spending figures used in

Table 1. This accounts for small discrepancies between the FY2000 figures in Table 1and Appendix A. These minor differences do not appreciably affect the overall analysis.

Chairman NUSSLE. Ms. Clayton.

Mrs. CLAYTON. I want to thank the witnesses, all of them, for

their testimony and the supplemental information that they gave.

Ms. Daly, in your report, ‘‘Welfare: How Do We Define Success?’’

you have an interesting chapter, stating welfare successes ended

up in your soup kitchens. From what I gather, it refers to the increased number of people who have to beg for food over the weekend.

Are there other recommendations that would encourage work

and still encourage people to move from welfare to work, but not

have them end up other than what you have indicated. You indicated an increase in minimum wage, and an increase in public

housing. We support that, but I think there are some issues on food

stamps that I didn’t hear, that I would like for the record.

Ms. DALY. Thank you very much, Mrs. Clayton. Those recommendations are in our written report. The report that you are

referring to and that you have held up was published by Network,

a Catholic social justice lobby with which we are associated, and

my name is on the back of it. That is why you may have thought—

because I was praising to the skies that wonderful report.

We certainly share with Network our concerns, and, yes, we are

seeing the welfare reform success stories in our soup kitchens and

shelters and food programs, because people can’t earn enough to

pay the babysitter and the rent and buy food. And what always is

last is food, because if you don’t pay the rent, you get evicted; and

if you don’t pay the babysitter, you can’t go to work. So people

come and ask for emergency food.

We don’t think that is a solution. We are not asking the government to give us more funding for emergency food for the poor. We

are asking for the poor to have enough resources to go to the supermarket like the rest of us.

Our first recommendation would be to require the States to do

something which is now only an option, which would be to allow

people when they are leaving welfare to automatically get their

food stamps benefits for a full year. When a mother goes to work,

she can’t take a day off every 3 months to sit in the welfare department and reapply for food stamp benefits. She can’t take another

day off from work, to go sit in the Medicaid office and reapply for

Medicaid every 3 months.

That is how the system works in most States, because the Federal Government wants to make sure that the States don’t give $1

in food stamps or pay for one immunization for a child that they

don’t have the paperwork for in the records. It is really not a quesVerDate 11-MAY-2000 14:28 Feb 09, 2002 Jkt 000000 PO 00000 Frm 00086 Fmt 6633 Sfmt 6602 H:\DOCS\HEARINGS\107-16\HBU213.000 HBUDGET1 PsN: HBUDGET1
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tion of establishing eligibility. It is more making sure all the paperwork records are there.

So if the Federal Government would allow the States to just let

people have their benefits for a full year when they go from welfare

to work, we would see a lot fewer people showing up in our soup

kitchens who are working every day.

Mrs. CLAYTON. I also want to thank Ms. LaVerne Hewlett for her

statement describing how she is hopeful in the future to be more

independent and to improve her education. Also detailing how the

system is supporting her to work, and noting the whole issue of

having trained licensed day care being a critical issue. It is almost

like the housing piece. If you don’t have people licensed and providing services for contract, having State dollars or Federal dollars to

enable one to purchase it, won’t matter.

So, Mr. Chairman, I think that is something we need to work on

to find out how we encourage more institutions to support licensing

for daycare and also encourage community colleges to train individuals who are interested in going into that area. So I appreciate you

highlighting the struggle. Even when there are dollars, you cannot

utilize those dollars, if there is a lack infrastructure particularly in

rural areas. I come from rural America and I know the difference

between having available institutions and services for health or

day care and not having them in rural areas, so I appreciate that.

I did not hear you say that you received any food assistance. Was

that an oversight on your part? Do you receive food stamps?

Ms. HEWLETT. Yes, I do receive food stamps.

Mrs. CLAYTON. So you are eligible for food stamps and you are

receiving food stamps?

Ms. HEWLETT. Yeah. Unfortunately it is not enough to carry

over. I only receive $10 per month.

Mrs. CLAYTON. Ten dollars per month?

Ms. HEWLETT. Correct. And when you look at the grand scale of

things, $10 can’t buy anything.

Mrs. CLAYTON. I agree. We have to do something. There is an

amendment to a bill that says it should be at least $25. We think

it is insulting that you have to pass the bar before you can do—

I saw these lawyers smiling at each other. Either that says something about us or it says something about food stamps.

I do know the application process is very difficult. Ms. Daly, I

think lawyers saying nothing is as difficult as passing the bar. But

$10, whatever it is for a struggle for $10 is difficult. I agree that

$10 doesn’t pay very much, and we are trying to work on that in

another bill. The agriculture bill did not attempt to raise the minimum benefit. The independent bill from Representative Walsh and

myself says it at least ought to be 25. And usually what you are

eligible for is based on your income. And it is my understanding

that you made $7 an hour; right?

Ms. HEWLETT. Right.

Mrs. CLAYTON.There are some deductions out there that allow

eligibility, and part of that deduction is child care and health care.

So I am not suggesting that you are not receiving what you should,

but it does seem a little puzzling that if there is full recognition

of your situation, you should be getting more than $10. I am not

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caseworker, but it seems as though all of your deductions haven’t

been accounted for if that is the case.

Again, I thank all the panelists, and my time has expired. Thank

you, Mr. Chairman.

Chairman NUSSLE. Of course, in order for her to find out if she

is eligible for more, we have got a whole ream of paperwork we

have to have her fill out in order to find that out.

Mrs. CLAYTON. Whether she is eligible for $5 more or not; that

is the problem.

Chairman NUSSLE. Just to get another 5 bucks. Mr. Moran.

Mr. MORAN. Do you want to——

Chairman NUSSLE. Sure. The first thing I want to ask or suggest

is that—particularly this is true of the testimony by Mr. Rector. It

is clear from your testimony, the historical perspective that you

give—and as I stated at the outset of the hearing, because the

Budget Committee is in the unfortunate—fortunate but unfortunate at times to have to deal with the big numbers and the big picture and the priorities of how this is all balanced, it is clear from

your testimony that we spend a lot of money on these programs.

In fact, I have a statistic in front of me that says—and again statistics aren’t giving you the help you need at this moment, but the

statistics are $8.5 trillion since the war on poverty started in 1965.

So we are putting money into it, as you said.

The Bush budget, even though there are many who suggest it

doesn’t go as far as maybe it could, or should, or whatever, to suggest that $3.6 trillion isn’t a chunk of change is missing the point.

I think the perspective you are adding to this is important to this.

If the question then becomes if that is not enough, A, how much

is; and then, B, if we are spending that much, why is it we still

have people who are still locked into programs and don’t seem to

be escaping?

So I guess it is both. A, what is enough, if that is not enough?

And more importantly, B, if that is enough, why then does it seem

not to be working as well as it could? I just throw that out.

Mr. RECTOR. That is a very good point, Congressman, and I think

the committee is in a very fortunate position, in the sense that you

are almost the only committee that would look at the aggregate

amount of money we are spending to aid poor people.

The Federal Government has over 70 major programs, meanstested programs, targeted toward poor and low-income people. And

each committee has a few of these programs and they often will operate with visors, as if those programs were the only ones going on.

We can also play games where in any 1 year, one of those programs, for example, the social service block grant program—which

we heard a lot about today—for a short period of time, may be cut.

Then we will talk a lot about that cut, we won’t talk about other

programs, earned income tax credit or Medicaid, that have been expanding at astronomical rates during the same period. The reality

is that all of these programs are basically addressing the same population, most of whom will be getting benefits from four or five or

six, seven programs at one time, coming out of different congressional committees. It is very important to understand the system,

to look at all those programs altogether.

85

Now, the question how could we spend $8-1/2 trillion on the war

on poverty, for which you could buy almost the entire industrial

and business infrastructure of the United States for that amount

of money, and still have all of the problems that we hear about

today?

I believe the answer to that is that the conventional war on poverty programs basically rewarded two things. They rewarded nonwork and they rewarded nonmarriage. They achieved tremendous

increases in both of those things, thereby resulting in huge

amounts of poverty and much larger populations in need of aid that

then generated additional spending. So you were essentially

digging your own hole. The more money you put into those programs, the less marriage you had, the less work you had, the more

children in need of aid that were created, and therefore you spent

more money.

Now, with welfare reform and the creation of TANF in 1996, we

partially turned the corner on that. We need to recognize that half

of the women on TANF today are not being required to do anything

to become self-sufficient. There are no meaningful work requirements in the food stamp program, no meaningful work requirements in the public housing programs. One-way handouts that we

have had in the past don’t work.

I have been in this field for a long time. I have really been doing

this now for about 20 years, and I have sat before this committee

and other committees dozens and dozens of times over that time

period, and in every one of those hearings there will always be

someone that I respect from the other side of political spectrum

who would say, if we could just spend this amount more, just this

amount more, then everything is going to get better, the light at

the end of the tunnel will come.

Well, the reality is that when you look at this over the historical

perspective, we did spend that amount more. Every single year the

spending goes up, and over a period of a decade, the last decade,

we are now spending 60 percent more than when Bill Clinton came

into office in the early nineties. We always do spend that extra

amount. Yet somehow the social problems that are supposed to be

solved actually get worse, not better. And the reason for that is

that we are spending this money in a wrong way. We need to spend

the money in such a way as to promote marriage and promote

work, and in that task we have just barely begun. We have just

barely scratched the surface.

Ms. DALY. Mr. Nussle, could I comment? As Mr. Rector pointed

out at the beginning of his testimony, you have to take all of these

numbers on spending on the poor and divide by half, because half

of the spending, as he points out, is for elderly and disabled people.

Most of those people are in nursing homes and are not going to be

able to work ever again. Most of them were not poor until they got

very old and very sick and used up all of their income and assets

to pay for nursing home care. So first of all, divide the big $8 billion number in half.

Secondly, the war on poverty. Robert Rector’s spending total

starts with the war on poverty. The war on poverty began in 1965,

35 years ago. The children who were in Head Start in the late

1960’s are now teachers and nurses and bus drivers, legislative asVerDate 11-MAY-2000 14:28 Feb 09, 2002 Jkt 000000 PO 00000 Frm 00089 Fmt 6633 Sfmt 6602 H:\DOCS\HEARINGS\107-16\HBU213.000 HBUDGET1 PsN: HBUDGET1
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sistants here on Capitol Hill, and members of State legislatures

around the country. I have met Head Start graduates all over the

place.

We have invested in similar programs for people for 35 years. It

is like the defense budget. You know, when Secretary Rumsfeld

comes in and says we have to spend money this year, that will not

mean we won’t have to spend on defense in later years. There is

always going to be a need to defend the United States. There is always going to be a need to take care of the people who are poor

at that point.

The people that we spent money on for the last 35 years, most

of them are no longer poor and are now productive, but there are

new people who need help. There is the baby born yesterday that

we can’t turn our backs on, even if we wish parents were married.

We can’t turn our backs on them.

When you just look at the families with children, at the half of

the poverty spending that is on them, a very high percentage of

that is on health care, and the reason is, as Ms. Edelman pointed

out, that we are the only industrialized country in the world that

doesn’t have a universal health care system. So we have to have

a separate health care system for low-income people, especially for

children.

So most of the kind of spending we spend on the poor is not really to raise incomes above poverty or to help them get jobs. Most

of the spending is survival spending. Survival spending in hospitals, in nursing homes, in long-term care facilities and in programs like the Head Start program and day care, which are very

good investments.

Chairman NUSSLE. Mr. Moran?

Mr. MORAN. Thank you, Chairman Nussle.

First of all, I appreciate the fact that Mr. Rector has been involved in the social welfare area for as long as you have, but I don’t

appreciate the fact that much of your analysis is, I think, deliberately misleading. And the most obvious example of that is Medicaid.

You know, from the tone of your testimony, you are suggesting—

you keep using handouts and so on. In fact, the fastest-growing

area of the Medicaid program is actually the elderly in long-term

care facilities, and the fastest component of that is middle-class

families who have found a way to spend down to get their parent,

the grandparent or the family into long-term care facilities. No one

is arguing that the reality is that.

The money that we have spent on very low-income families has

reduced in its annual rate of growth, and, in fact, with the—as a

result of the budget resolution that we just passed, is going to be

reduced much more substantially. It is the entitlement programs of

Social Security and Medicare, the vast majority of which actually

goes to the middle class that comprises the—most of the social

spending for the next 10 years.

The other problem I have with it is just the mean-spiritedness

of the context in which your testimony was given. The principal recipients of the programs that you take to task are children who are

suffering for the accident of their birth. They are not the single

mothers. Most of the medical assistance, Medicaid, when it does go

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to the very poor, other than the elderly, is going to children. And

likewise with food stamps. Most of the food stamp expenditures are

actually for the children, although you can obviously find abuses in

every program. The most abused program is actually tax collections

on the part of the very wealthy. Although I know that would not

be consistent with your ultimate objective of the Heritage Foundation, I bring that up.

I am going to—since I obviously have somewhat dismissed your

testimony, Mr. Rector, because of the mindset in which it is given

or the mean-spiritedness. I just find it really unsavory and unfortunate.

I want to give Ms. Daly both some credit for your testimony and

your commitment to improving things, but also some criticism, substantial criticism, as far as I am concerned, and that is in your outline of what needs to be done to address this problem. Nowhere is

there reference to family planning, and much of the problem that

we have in terms of families on welfare, single mothers—because

I think there is a legitimate point to be made that if you have only

got one adult in the household, that adult has to be primarily occupied with raising the children. So most families don’t work very

well. It is an extraordinary effort to make a family work if you

don’t have at least one adult in the work force and one adult to

focus primarily on the children. When one adult has to do it all,

you are asking for an enormous effort.

The Catholic Church—and I would only say this because I am a

Catholic—is part of the problem, and it is in not supporting family

planning. The principal reason why young mothers are not married

is because the father of the child is not an appropriate husband or

real father. I should say the biological father of the child is not appropriate for fatherhood or to—to be a responsible spouse. We have

got to empower more women, more consistently, to make even more

of a dent in these charts by much greater emphasis upon family

planning, and I would like you to address that, if you would, Ms.

Daly.

Ms. DALY. Well, Mr. Moran, as you know, there has not been any

difficulty for the advocates of family planning to get steady increases for those programs through the Congress, but what there

has been a problem with is getting steady increases in programs

for housing production and day care and other kinds of health care

issues.

The subject of this hearing is the problems of the working poor,

so my testimony focused not on people who are still on welfare,

which is mainly what Mr. Rector talked about, but on the vast majority of low-income families in this country who are not on welfare

now. Many have never been on welfare, but can’t make ends meet,

as the title of the hearing states.

I could tell you about some programs that Catholic Charities

runs that are helping biological fathers to be real fathers. In Chicago, in New Jersey, in Virginia, all over the country we have programs that help young mothers be reconciled with their own families so that they can get emotional and psychological and practical

support from them; and also to get to know and work with the parents of the biological father where that is appropriate—when the

man has not been abusive or taken advantage of a young woman—

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so that the young baby growing up has two parents and two sets

of grandparents. And that helps financially, but it also wraps a

family around that child for its whole life, and nothing is more important, as Mr. Rector pointed out.

Now, we might wish that the couple had married before they had

a child, but people who come to our agencies are not coming to us

for family planning, so we can’t tell you much about that. They

come to us for help with day care, with jobs, with getting better

jobs, and with being able to take care of the children that they already have. So I can only come here and testify from my own

knowledge and the experience of my agencies about the major problems of low-income people who work.

Mr. MORAN. That was a very good response, incidentally. Nice

job.

May I ask another question? Jim, apparently I am not holding

up a lot of people here. But President Clinton signed an executive

order—it must have been 1998, I think, maybe early 1999—with

regard to housing. Basically, it changed the eligibility that had existed up until then for dependent girls in a public housing household to be able to achieve eligibility for public housing or Section

8 by virtue of having a child. I understand his reasoning that you

didn’t want to encourage, you know, the cycle of poverty and so on

and forth, but unfortunately one of the statistics that is most compelling and upsetting is that the age of the biological father increases almost in direct proportion to the youth of the mother. In

other words, the older the father, the younger the mother, up to a

point, and then it stands merged about 18, 19.

The biological fathers, in many cases, were the stepfathers or

boyfriends of the mothers. That was what too often happens. So it

becomes untenable for the mother to stay in the house—for the

teenage mother to stay in the house. Even though that executive

order was signed, there was really no alternative, and so we have

been pushing for things like second-chance homes, which have

worked, and which—the Borromeo Housing I know Arlington is

doing. We have got a little grant for them, but it is tough. And of

course in the Arlington diocese, we have no support from the

Catholic Church. Even though they have tremendous resources,

they are doing virtually nothing.

Ms. DALY. You might want to check out Christ House.

Mr. MORAN. Oh, Christ House is wonderful.

Ms. DALY. Christ House is funded almost entirely by the Diocese

of Arlington, by the Catholic Church.

Mr. MORAN. I understand. I am very familiar with Christ House,

Ms. Daly, and they are doing wonderful things, but those are volunteers in the larger community. In terms of the Archdiocese support, it is minimal, particularly for helping young women. And

what I am getting at is I wonder if in light of that executive order,

if it is isn’t time to look again at the maternity homes that are not

dissimilar from the second-chance home concept, where young girls

can go into a cooperative living facility, have adult supervisors, but

share babysitting, get some education, some training and live in a

more secure and much more nurturing environment. The Catholic

Church used to provide a number of those. It does virtually nothing

89

now, I don’t think, in that area, and I am wondering whether you

think that might be something we should look further at?

Ms. DALY. Well, I have to agree with you that that would be a

good thing to have more second-chance homes and more maternity

homes. I have to disagree with you that we don’t do it anymore.

Catholic Charities agencies all over the country run second-chance

homes and maternity homes and group apartment living that is supervised so that when the 16-year-old mother is 17 or 18, and she

doesn’t have to live in a congregate setting anymore, she can have

a little apartment, she is still getting some supervision and help.

I could not agree with you more that government needs to do

more to fund those second-chance homes. It is very clear that they

are effective in reducing the second pregnancies if the girl only has

one baby so far; that girls who live in those homes are more likely

to finish high school, get training, get jobs and do well as mothers.

I think they are often more likely also to reconcile with their own

families and the father and the father’s family and create a family

around the baby.

I have to tell you that the major source of money for programs

like that in this country is the social service block grant, and I

have to keep up with my novena here and hope that you all will

work to restore funding for the social service block grant. If this

committee wants to see more second-chance homes for mothers,

that would be one way to make sure it happens.

On the executive order, I think the President did the right thing.

I think girls under 18 have no business living by themselves in

public housing projects or anyplace else with little babies; that they

are going to be preyed upon by unscrupulous people, they will not

have the help they need, they are emotionally isolated. It just

makes no sense for that to be the solution.

Mr. MORAN. Ms. Daly, I agree with you on virtually everything

that you said in response except, while it doesn’t make any sense,

there are some households where neither does it make any sense

to leave a young child in the same household where the boyfriend

or the stepfather is still living there who was responsible for the

impregnation, and I think there needs to be someplace where girls

end up in that situation can go, not in their own living unit, I

agree, but a more nurturing, secure environment.

And with regard to the Federal Government needing to do more,

I agree, but it is not going to do any more than it is doing now.

In fact, it will do less, unless there is sufficient advocacy on the

part of groups like Catholic Charities, those who have political influence, as your organization does. And the direction and the gapfilling and the capacity-building is also going to have to take place,

I think, in the nonprofit sectors before you see major programs implemented at the Federal level.

Ms. DALY. Mr. Moran, before you came in, I was pointing out

that certainly I would agree with you that we shouldn’t leave the

young pregnant girl in the household where she has been abused

by the stepfather or the boyfriend of her mother. On the other

hand, we shouldn’t leave him there to abuse anybody else either.

He should be arrested and prosecuted, and I think, all around the

country we are beginning to see a lot more district attorneys being

willing to take that avenue; that it is not just a question that welVerDate 11-MAY-2000 14:28 Feb 09, 2002 Jkt 000000 PO 00000 Frm 00093 Fmt 6633 Sfmt 6602 H:\DOCS\HEARINGS\107-16\HBU213.000 HBUDGET1 PsN: HBUDGET1
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fare programs deal with this. The legal system has to protect young

women and young men.

Mr. MORAN. I agree.

Mr. RECTOR. If I could make a couple of points that relate to this.

Although we do need to be concerned about these young teenage

moms, I think it is important for us to understand that when we

look at the one-third of all births at occur outside marriage, very

few of those occur to women under age 18. Only about 14 percent

of total out-of-wedlock child-bearing is occurring to girls that are

under 18 and are in high schools. The overwhelming bulk of those

out-of-wedlock births are occurring to young adult women age 19

to, say, 23. When you look at the data there, it doesn’t really suggest that a lack of family planning or a lack of understanding of

contraception is the real issue. In fact, in about half of these cases

of these young adult women, she is actually cohabiting with the father at the time of birth, but the relationship will fall apart in

about a year and a half after the birth.

What is really happening here is not a lack of contraception. It

is a crisis in the relationships between young adult men and

women, and that is why the marriages are not forming. That is

why that man is going to leave that house. There is going to be yet

another boyfriend who comes in in a few years. There is going to

be a fracture in that relationship. There is going to be another boyfriend who comes in and this situation of sequential cohabitation,

it the main breeding grounds for poverty. Moreover, virtually all of

the serious child abuse in the country is occurring in this type of

situation where you have got a boyfriend with several young kids

in the household who are not his biological children.

We ought to look very carefully at this young girl and her boyfriend, who by the time she is in her 20’s, is not a lot older than

she is. They are cohabiting together, but they are not married. The

government the supporting them, is paying for the birth through

Medicaid, yet in virtually no State in the United States do we hand

that couple even a single brochure to tell them about the value of

marriage, let alone offering them counseling and support that

might help them to improve the quality of their relationship.

Also, I would say in all respect that even if you throw the medical growth out—and my testimony did indicate very clearly that

the medical component of the welfare state is growing the most

rapidly, but even if you throw Medical care out, cash, food and

housing, after adjusting for inflation, increased by 37 percent in the

last decade. We are spending a lot of money. The question is, are

we spending it in the right way, in a way that truly helps, or in

a way that hurts?

I am—and I am sorry that you felt that my remarks were meanspirited, but I would also remind you that many people in Congress

called the welfare reform of 1996 mean-spirited. I spent my entire

adult career trying to assist poor people, and I think the true judge

of mean-spiritedness is in the consequences of the policies. I

worked a lot on welfare reform. I worked on promarriage and

prowork policies for several decades, and I would put those policies

in the terms of their consequences up against any traditional welfare program from the past, and I think we would win in that debate hands down every day of the week.

91

Mr. MORAN. Well, you are going to have to—you have elicited a

response, Mr. Rector, and, first of all, I won’t argue with the 37

percent increase over a decade, although I know some points could

be made to clarify the meaning of that, but that averages out to

3.7 percent on an annual basis. That is one-third of the average

medical cost increase for the last approximately—well, for many of

those years in the last decade. In no year did medical costs not go

up substantially more than 3.7 percent. Housing costs went up considerably more than 3.7 percent, and in many of those last 10

years. They certainly did in the last 2 years. Rental costs have escalated dramatically, particularly in the urban areas where much

of the Section 8 is taking place. I don’t know about food. I don’t

have any figures on food, but I think when you put the 3.7 percent

on an annual basis in context, it is not as dramatic as it might appear to be.

I don’t want to find even more opportunities for you and Ms.

Daly to reach agreement in opposing what I am suggesting, but

the——

Mr. RECTOR. It is not too frequent, so——

Mr. MORAN. The only point that you wanted to emphasize was

that principal recipients of these programs that we are talking

about are the children who are suffering for the accident of their

birth, and when you talk about the family situations not working

consistently, among affluent, well-educated spouses the principal

reason for divorce is financial difficulties, and when you are living

in poverty, it oftentimes becomes an untenable situation.

Now, I don’t think the government can come in and undo that,

but I do think much of the family breakup is a function of not having sufficient resources to become in any way self-sufficient, blaming it on one spouse or the other, the constant frustration, the constant hurt in not being able to provide for your family. Those families that I do know who do live in poverty, I think that is the one

single problem that makes it awfully difficult to stay together, the

lack of capability to provide adequately for your family.

I think we are talking about some issues that go far beyond the

scope of the Budget Committee, but I am glad the Budget Committee hazarded them today, and I thank you, Mr. Chairman, for the

hearing.

Chairman NUSSLE. Thank you, Mr. Moran.

With that, we have come to a conclusion. Where is Khalil today?

Is he here? All right. Well, I was wondering if maybe—what your

child care situation was for today. I was going to say, we are going

to have to worry about your babysitter if this goes much longer.

You are fine back there? OK. Well, I am glad you were able to come

today.

I thank all of our witnesses for a very interesting hearing. I

know that this subject will be discussed many different ways, many

different times in the future. It needs to be. I appreciate all of you

coming and spending time with us today, and with that, the hearing is adjourned.

[Whereupon, at 1:43 p.m., the committee was adjourned.]

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