```

[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]

 
   IMPLEMENTATION OF WELFARE REFORM WORK REQUIREMENTS AND TIME LIMITS
=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION
                               __________

                             MARCH 7, 2002
                               __________

                           Serial No. 107-59
                               __________

         Printed for the use of the Committee on Ways and Means

                    U.S. GOVERNMENT PRINTING OFFICE
78-903                       WASHINGTON : 2002
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512-1800  
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001

                      COMMITTEE ON WAYS AND MEANS

                   BILL THOMAS, California, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
E. CLAY SHAW, Jr., Florida           FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut        ROBERT T. MATSUI, California
AMO HOUGHTON, New York               WILLIAM J. COYNE, Pennsylvania
WALLY HERGER, California             SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana               BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               GERALD D. KLECZKA, Wisconsin
JIM NUSSLE, Iowa                     JOHN LEWIS, Georgia
SAM JOHNSON, Texas                   RICHARD E. NEAL, Massachusetts
JENNIFER DUNN, Washington            MICHAEL R. McNULTY, New York
MAC COLLINS, Georgia                 WILLIAM J. JEFFERSON, Louisiana
ROB PORTMAN, Ohio                    JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania           XAVIER BECERRA, California
WES WATKINS, Oklahoma                KAREN L. THURMAN, Florida
J.D. HAYWORTH, Arizona               LLOYD DOGGETT, Texas
JERRY WELLER, Illinois               EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

                     Allison Giles, Chief of Staff
                  Janice Mays, Minority Chief Counsel

                                 ______

                    Subcommittee on Human Resources

                   WALLY HERGER, California, Chairman

NANCY L. JOHNSON, Connecticut        BENJAMIN L. CARDIN, Maryland
WES WATKINS, Oklahoma                FORTNEY PETE STARK, California
SCOTT McINNIS, Colorado              SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  LLOYD DOGGETT, Texas
PHIL ENGLISH, Pennsylvania
RON LEWIS, Kentucky

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.

                            C O N T E N T S

                               Page______
Advisory of February 27, 2002, announcing the hearing............     2

                               WITNESSES

U.S. General Accounting Office, Cynthia M. Fagnoni, Managing 
  Director, Education, Workforce, and Income Security Issues; 
  accompanied by Gale Harris and Katrina Ryan....................     6

                                 ______

American Enterprise Institute, and University of Maryland School 
  of Public Affairs, Douglas J. Besharov.........................    69
Center for Law and Social Policy, Mark H. Greenberg..............    50
Goodwill Industries International, Inc., and Goodwill Industries 
  of the Chesapeake, Marge Thomas................................    35
Lewin Group, Michael E. Fishman..................................    61
Montgomery County Department of Job and Family Services, Dannetta 
  Graves.........................................................    47
Wilkerson, Fatima, Baltimore, MD.................................    39
Wisconsin Department of Workforce Development, Hon. Jennifer 
  Reinert........................................................    41

                       SUBMISSIONS FOR THE RECORD

Abrahamson, Leslie, Westmont, IL, statement......................    85
Alliance for Children & Families, Carmen Delgado Votaw, letter 
  and attachment.................................................    85
American Association of Community Colleges, George R. Boggs, 
  letter.........................................................    97
Center for Women Policy Studies, statement.......................    98
Community Legal Services, Inc., Philadelphia, PA:
    Sharon M. Dietrich, statement................................   100
    Brenda Lynch, statement......................................   106
Friends of Welfare Rights of Washtenaw County, Ypsilanti, MI, Lee 
  A. Booth, letter...............................................   113
National Network to End Domestic Violence, statement.............   114
NETWORK, A National Catholic Social Justice Lobby, Sister Mary 
  Elizabeth Clark, statement.....................................   119
People's Emergency Center, Philadelphia, PA, Gloria Guard, 
  statement......................................................   120
Project IRENE, Springfield, IL, Rose Mary Meyer, letter..........   123
Protestants for the Common Good, Chicago, IL, Nancy Brandt, 
  letter.........................................................   124
Volunteers of America, Alexandria, VA, Ronald H. Field, statement
Women and Poverty Public Education Initiative, Milwaukee, WI, 
  Jean Verber, letter............................................   125
Women Employed, Chicago, IL, Jenny Wittner, statement............   126

   IMPLEMENTATION OF WELFARE REFORM WORK REQUIREMENTS AND TIME LIMITS

                              ----------                              

                        THURSDAY, MARCH 7, 2002

                  House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Human Resources,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice at 9:42 a.m., in 
room B-318 Rayburn House Office Building, Hon. Wally Herger 
[Chairman of the Subcommittee] presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                                CONTACT: (202) 225-1025
FOR IMMEDIATE RELEASE

February 27, 2002

No. HR-11

                      Herger Announces Hearing on

                 Implementation of Welfare Reform Work

                      Requirements and Time Limits

    Congressman Wally Herger (R-CA), Chairman, Subcommittee on Human 
Resources of the Committee on Ways and Means, today announced that the 
Subcommittee will hold a hearing on State implementation of Federal 
welfare work requirements and time limits, which are key features of 
the 1996 welfare reform law. The hearing will take place on Thursday, 
March 7, 2002, in room B-318 Rayburn House Office Building, beginning 
at 9:30 a.m.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. 
Witnesses will include representatives of the U.S. General Accounting 
Office, researchers, and other experts in welfare reform implementation 
issues. However, any individual or organization not scheduled for an 
oral appearance may submit a written statement for consideration by the 
Committee and for inclusion in the printed record of the hearing.

BACKGROUND:

    The Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996 (P.L. 104-193), commonly referred to as the 1996 welfare reform 
law, made dramatic changes in the Federal-State welfare system designed 
to aid low-income American families. The law repealed the former Aid to 
Families with Dependent Children (AFDC) program, and with it the 
individual entitlement to cash welfare benefits. In its place, the 1996 
legislation created a new Temporary Assistance for Needy Families 
(TANF) block grant that provides fixed funding to States to operate 
programs designed to achieve several purposes: (1) provide assistance 
to needy families, (2) end the dependence of needy parents on 
government benefits by promoting job preparation, work, and marriage, 
(3) prevent and reduce the incidence of out-of-wedlock pregnancies, and 
(4) encourage the formation and maintenance of two-parent families.
      
    In exchange for the broad flexibility and fixed funding granted 
States, the 1996 law imposed certain key program requirements, notably 
work requirements and time limits on Federal benefits.
      
    Work Requirements. In order to assist in the conversion of the old 
AFDC program to a program focused on work, the 1996 law required States 
to engage a specific and rising percentage of their welfare caseload in 
work or certain work activities each year; States that fail to satisfy 
this requirement lose Federal funds. States receive ``credits'' toward 
satisfying this work requirement to the degree their caseload declined 
from earlier levels. Given large caseload declines under welfare 
reform, this ``caseload reduction credit'' has sharply reduced the 
effective work requirement in all States, and eliminated it in most 
States. Other factors, including the large and growing share of 
families receiving assistance considered ``child only'' cases and the 
operation of separate State programs not subject to Federal work 
requirements, have further limited the impact of the 1996 law's work 
requirements.
      
    Time Limits. Prior to the 1996 changes, average lifetime stay on 
welfare reached 13 years. The 1996 law sought to reduce such long-term 
dependence on benefits by

establishing a 5 year lifetime limit on receipt of Federal cash welfare 
benefits, with up to 20 percent of a State's caseload exempted for 
hardship in any year. A number of States also have created separate 
States programs to provide continued cash benefits after 5 years for 
families that remain in need of assistance.
      
    In announcing the hearing, Chairman Herger stated: ``Welfare reform 
has been a tremendous success. We've increased work and earnings, 
reduced dependence, and lifted almost three million children from 
poverty. The 1996 law's work requirements and time limits have played 
major roles in this transformation. Still, more can be done. As we 
reauthorize the welfare reform law this year, we will take steps to 
help even more families on welfare better prepare for work and a 
lifetime of independence.''

FOCUS OF THE HEARING:

    This hearing will focus on issues related to the implementation of 
welfare work requirements and time limits in preparation for the 
reauthorization of the TANF program, which expires on September 30, 
2002.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

    Please Note: Due to the change in House mail policy, any person or 
organization wishing to submit a written statement for the printed 
record of the hearing should send it electronically to 
[email protected], along with a fax copy to 
202/225-2610, by the close of business, Thursday, March 21, 2002. Those 
filing written statements who wish to have their statements distributed 
to the press and interested public at the hearing should deliver 200 
copies to the Subcommittee on Human Resources in room B-317 Rayburn 
House Office Building, in an open and searchable package 48 hours 
before the hearing. The U.S. Capitol Police will refuse sealed-packaged 
deliveries to all House Office buildings.

FORMATTING REQUIREMENTS:

    Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
exhibit not in compliance with these guidelines will not be printed, 
but will be maintained in the Committee files for review and use by the 
Committee.
      
    1. Due to the change in House mail policy, all statements and any 
accompanying exhibits for printing must be submitted electronically to 
[email protected], along with a fax copy to 
(202) 225-2610, in Word Perfect or MS Word format and MUST NOT exceed a 
total of 10 pages including attachments. Witnesses are advised that the 
Committee will rely on electronic submissions for printing the official 
hearing record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. Any statements must include a list of all clients, persons, or 
organizations on whose behalf the witness appears. A supplemental sheet 
must accompany each statement listing the name, company, address, 
telephone and fax numbers of each witness.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://waysandmeans.house.gov.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call (202) 225-1721 or (202) 226-3411 TTD/TTY in advance of the event 
(four business days notice is requested). Questions with regard to 
special accommodation needs in general (including availability of 
Committee materials in alternative formats) may be directed to the 
Committee as noted above.

                                

    Chairman Herger. Good morning. This hearing of the Ways and 
Means Human Resources Subcommittee will come to order. Today's 
hearing will provide an important backdrop as we consider key 
features of the nation's welfare reform program, namely work 
requirements and time limits on benefits.
    Welfare reform has been a tremendous success in reducing 
welfare caseload and moving millions of families out of poverty 
through increased work. We know that nearly 3 million children 
have been lifted from poverty since 1996, with the black child 
poverty rate now at a record low. Employment by mothers most 
likely to go on welfare rose by 40 percent between 1995 and 
2000, and welfare caseloads have fallen by 9 million, from 14 
million recipients in 1994 to just 5 million today. These 
changes are without precedent.
    The 1996 law has made phenomenal progress, but there is 
still work to do.
    I know many people will be surprised to learn that we do 
not require every welfare recipient to work or at least prepare 
for work today. In the year 2000, only 34 percent of the 
national caseload was engaged in any of a broad range of work 
activities, including education and training, for at least 30 
hours per week. In some States, that figure is as low as 6 
percent. According to the U.S. Department of Health and Human 
Services' (HHSs) most recent annual report, an astonishing 57.6 
percent of families on welfare are doing nothing to prepare for 
work while receiving benefits. That is just not good enough.
    I congratulate the President for proposing changes that 
will reinforce the pro-work message for many more individuals 
on welfare. Work is the only real path out of poverty, and only 
through helping more people work will we get the rest of the 
job done.
    As we press on with further reforms, there are a number of 
issues we need to understand about how work requirements and 
time limit policies are working in practice. One set of issues 
involves what are called child-only cases. Work requirements 
and time limits do not apply to these cases, which represent 
more than one-third of the current caseload and the share is 
rising.
    Other issues stem from separate State-funded Temporary 
Assistance for Needy Families (TANF) programs that exclude some 
participants from Federal work requirements on time limits. I 
asked the U.S. General Accounting Office (GAO) last year to 
provide us with some information about how these separate State 
programs affect the work participation targets and time limits. 
They will share their findings with us today.
    A final set of issues involves the time limits included in 
the 1996 law. The 1996 law expected families to receive no more 
than 5 years of Federal cash benefits with up to 20 percent of 
the caseload exempted for hardship. The need for this change 
was clear. Prior to 1996, the average lifetime of then-current 
welfare recipients was an incredible 13 years. Welfare had 
become a trap, plain and simple.
    Today, we will review how time limits have worked in 
practice. We will find that the vast majority of parents left 
welfare prior to their clock expiring. For these families, the 
time limit worked as intended to motivate both recipients and 
caseworkers to address family needs quickly and help recipients 
find and keep jobs. In a significant number of other cases, 
including child-only cases and those receiving assistance under 
separate State programs, families effectively have been 
exempted from the time limits altogether.
    Joining us today to provide perspective on how work 
requirements and time limits are applied in practice are 
distinguished researchers from the public and private sectors, 
along with State and local program leaders. We also are joined 
by Marge Thomas of Goodwill Industries and one of Goodwill's 
success stories, Ms. Fatima Wilkerson, to describe how parents 
with special challenges can succeed in the work place. We look 
forward to hearing from all of our witnesses.
    Without objection, each Member will have the opportunity to 
submit their written statement and have it included in the 
record at this point.
    [The opening statement of Chairman Herger follows:]
    Opening Statement of the Hon. Wally Herger, a Representative in 
 Congress from the State of California, and Chairman, Subcommittee on 
                            Human Resources
    Good morning. Today's hearing will provide an important backdrop as 
we consider key features of the nation's welfare reform program, namely 
work requirements and time limits on benefits.
    Welfare reform has been a tremendous success in reducing welfare 
caseloads and moving millions of families out of poverty through 
increased work. We know that nearly 3 million children have been lifted 
from poverty since 1996, with the black child poverty rate now at a 
record low; employment by mothers most likely to go on welfare rose by 
40% between 1995 and 2000; and welfare caseloads have fallen by 9 
million--from 14 million recipients in 1994 to just 5 million today.
    These changes are without precedent. The 1996 law has made 
phenomenal progress, but there's still work to do.
    I know many people will be surprised to learn that we don't require 
every welfare recipient to work or at least prepare for work today. In 
the year 2000, only 34 percent of the national caseload was engaged in 
any of a broad range of work activities including education and 
training for at least 30 hours per week. In some states, that figure is 
as low as 6 percent. According to HHS' most recent annual report, an 
astonishing 57.6 percent of families on welfare are doing nothing to 
prepare for work while receiving benefits.
    That's just not good enough.
    I congratulate the President for proposing changes that will 
reinforce the pro-work message for many more individuals on welfare. 
Work is the only real path out of poverty, and only through helping 
more people work will we get the rest of the job done.
    As we press on with further reforms, there are a number of issues 
we need to understand about how work requirements and time limit 
policies are working in practice.
    One set of issues involves what are called ``child-only'' cases. 
Work requirements and time limits do not apply in these cases--which 
represent more than one-third of the current caseload and the share is 
rising.
    Other issues stem from separate state-funded TANF programs that 
exclude some participants from federal work requirements or time 
limits. I asked the General Accounting Office last year to provide us 
with some information about how these separate state programs affect 
the work participation targets and time limits. They will share their 
findings with us today.
    A final set of issues involves the time limits included in the 1996 
law. The 1996 law expected families to receive no more than 5 years of 
federal cash benefits, with up to 20 percent of the caseload exempted 
for hardship. The need for this change was clear. Prior to 1996 the 
average lifetime of then-current welfare recipients was an incredible 
13 years. Welfare had become a trap, plain and simple.
    Today we will review how time limits have worked in practice. We 
will find that the vast majority of parents left welfare prior to their 
``clock'' expiring. For these families, the time limit worked as 
intended to motivate both recipients and caseworkers to address family 
needs quickly and help recipients find and keep jobs. In a significant 
number of other cases, including child-only cases and those receiving 
assistance under separate state programs, families effectively have 
been exempted from the time limit altogether.
    Joining us today to provide perspective on how work requirements 
and time limits are applied in practice are distinguished researchers 
from the public and private sectors, along with state and local program 
leaders. We also are joined by Marge Thomas of Goodwill Industries and 
one of Goodwill's success stories, Ms. Fatima Wilkerson, to describe 
how parents with special challenges can succeed in the workforce. We 
look forward to hearing from all of our witnesses.
    Mr. Cardin, would you care to make an opening statement?

                                

    Chairman Herger. Mr. Cardin, the Ranking Member is on his 
way, and we will allow him to make a statement when he arrives. 
Again, without further objection, all the written testimony 
will be made a part of the record.
    To start the hearing today, we have Cynthia Fagnoni, 
Managing Director of Education, Work force, and Income Security 
Issues, the U.S. General Accounting Office.
    Ms. Fagnoni.

STATEMENT OF CYNTHIA M. FAGNONI, MANAGING DIRECTOR, EDUCATION, 
WORKFORCE, AND INCOME SECURITY ISSUES, U.S. GENERAL ACCOUNTING 
      OFFICE; ACCOMPANIED BY GALE HARRIS AND KATRINA RYAN

    Ms. Fagnoni. Good morning. Mr. Chairman, I have with me 
today two of my colleagues, Gale Harris and Katrina Ryan, who 
have worked very hard on this testimony that I am going to give 
today.
    Mr. Chairman and Members of the Subcommittee, my colleagues 
and I are pleased to be here today to talk about what we have 
learned from States' implementation of work requirements and 
time limits for welfare families. When the Congress created the 
Temporary Assistance for Needy Families grant, the TANF, in 
1996, it included work requirements and time limits designed to 
focus welfare offices and welfare recipients on finding jobs 
and moving off the welfare rolls.
    To help accomplish this, the law requires that States meet 
Federal mandated participation rates for the percentage of 
welfare recipients in work activities or work or face financial 
penalties. In addition, States must enforce a 60-month lifetime 
limit on families with adults that receive welfare. To receive 
its Federal TANF funds, each State must meet a maintenance of 
effort requirement by spending a specified amount of its own 
funds on welfare and related programs.
    Today, I want to highlight key findings from our review of 
all 50 States and discussions with 12 of those States.
    First, it is important to understand, as you have 
mentioned, that a significant share of welfare cases are 
comprised of children only with no adult receiving welfare. 
Because no adult in these families receives cash assistance 
funded by TANF or State dollars, work requirements and time 
limits do not apply.
    In late 2001, nationwide, about 700,000, or one-third of 
the 2.1 million cash assistance cases funded by Federal or 
State dollars were child-only cases. In some States, the 
primary reason for child-only cases was a non-citizen parent 
not eligible for aid. For example, a large percentage of child-
only cases in Texas had a non-citizen parent. In several other 
States, child-only cases were primarily families where the care 
giver was someone other than the parent.
    The second issue I will discuss today is the flexibility 
States have in implementing the Federal work requirements. When 
welfare reform mandated Federal work participation rates, it 
also included a caseload reduction credit provision. This 
provision specifies that each State's mandated participation 
rate is to be reduced if its welfare caseload declines.
    Because of the dramatic declines in welfare caseloads that 
has occurred since 1996, States have generally faced greatly 
reduced mandated participation rates for their TANF programs. 
For example, in fiscal year 2000, caseload reduction credits 
reduced mandated participation rates to zero in 31 States 
instead of the mandated rate of 40 percent.
    Some State officials told us that because of the work 
participation rates being so low due to caseload reduction 
credits, States have more flexibility in the types of 
activities or services they can provide, for example, substance 
abuse treatment or mental health services, while still meeting 
their Federal work participation rates.
    We found in our previous work that some States included 
recipients in a range of work participation activities that 
extended beyond those that meet Federal work participation 
requirements, particularly to meet the needs of recipients 
considered hard to employ. We also found in our previous report 
on TANF recipients with mental and physical impairments that 
States and counties often exempted individuals they considered 
hard to employ from work requirements.
    Twenty-six States also provided cash assistance to certain 
needy families through State-funded programs, in which case 
Federal work requirements do not apply. States told us they 
used this option because of concerns that some families would 
not be able to participate for the number of hours or in the 
types of activities required to meet Federally mandated rates. 
We also found, however, that when States provided cash 
assistance to which Federal work requirements did not apply, 
they imposed their own. This indicates that States are not 
providing aid through these State programs to circumvent work 
requirements but to minimize the risk of Federal financial 
penalties.
    The third issue I will discuss is time limits. Nationwide, 
States excluded 11 percent of the 1.4 million welfare families 
with an adult from a Federal or State time limit. States 
generally targeted these time limit exclusions on families 
considered hard to employ and on working families not earning 
enough to leave the welfare rolls. For example, 22 States have 
policies in place to exclude working families from time limits. 
Maryland and Illinois told us they stop the clock for working 
families by funding them with State dollars rather than Federal 
TANF funds.
    I would like to end by highlighting some issues related to 
States' implementation experiences. Even though we are 5 years 
into welfare reform, States still have limited experience with 
time limits. At the time we conducted our survey this fall, 22 
States had not had TANF in place long enough for families to 
reach either the Federal or State time limit. Even in those 
States in which families have started to reach their time 
limits, many families have not reached their time limit because 
they have cycled on and off welfare. As a result, only 15 
States have begun to use the Federal 20 percent hardship 
exemption and all these States are applying it to less than 6 
percent of their caseload.
    The State officials we spoke with thought the 20 percent 
extension was adequate now but were less sure about the future. 
For example, Michigan told us it will use the Federal 20 
percent extension for all recipients following the rules of the 
program. If the number of families they want to exclude begins 
to exceed 20 percent, they plan to continue providing 
assistance with State funds.
    In talking with States, we generally found that State 
officials were supportive of work requirements and time limits. 
They also said that flexibility in implementing work 
requirements and time limits was important in allowing them to 
meet the needs of their recipients, such as the hard to employ. 
This flexibility helps to ensure that States can adapt the 
Federal program to meet State and local needs while still 
emphasizing work and the transitional nature of assistance.
    Mr. Chairman, this concludes my prepared statement. We 
would be happy to answer any questions you or other Members may 
have. Thank you.
    [The prepared statement of Ms. Fagnoni follows:]
    Statement of Cynthia M. Fagnoni, Managing Director, Education, 
 Workforce, and Income Security Issues, U.S. General Accounting Office
    Mr. Chairman and Members of the Subcommittee:
    Thank you for inviting me here today to discuss the extent to which 
families receiving cash assistance are excluded from work requirements 
and time limits. The 1996 Personal Responsibility and Work Opportunity 
Reconciliation Act (PRWORA) significantly changed federal welfare 
policy for low-income families with children, building upon and 
expanding state-level reforms. When the Congress created the Temporary 
Assistance for Needy Families block grant (TANF) to replace the 
previous welfare program, it emphasized that the new program was to be 
transitional in nature and focus on moving welfare recipients into 
employment. To this end, states are required to enforce work 
requirements and time limits on most families receiving cash 
assistance. More specifically, states face financial penalties if they 
do not include a minimum percentage of adults receiving cash assistance 
in work or work activities each year, referred to as the mandated 
participation rate requirement. This mandated rate increased each year, 
reaching 50 percent of all families in fiscal year 2002. In addition, 
states are to enforce a 60-month lifetime limit on families with adults 
who receive cash assistance. To receive its TANF block grant, each 
state must also meet a maintenance-of-effort requirement, under which 
it must spend at least a specified amount of its own funds, referred to 
as state maintenance-of-effort funds (MOE).
    Along with these federal requirements, the law allows states 
considerable flexibility to exclude families from work requirements and 
time limits. First, these requirements only apply to families with an 
adult receiving aid, not to cases in which only children receive cash 
assistance. Second, PRWORA specifies that up to 20 percent of families 
receiving assistance may receive extensions to federal time limits. 
Third, states may provide cash assistance not subject to work 
requirements and time limits if they use their state MOE in specified 
ways, such as through a state program other than their TANF program.
    As the Congress considers reauthorization of TANF, you asked us to 
determine and assess the states' implementation of these work 
requirements and time limits. More specifically, you asked us to 
determine (1) the extent of child-only cases among the cash assistance 
caseload funded by federal TANF and state MOE, (2) how states made use 
of work requirement flexibility, (3) the number of families states have 
excluded from time limits, and (4) key issues related to states' 
experiences in applying TANF work requirements and time limits. The 
information we gathered came from site-visits in 4 states, telephone 
interviews with TANF officials in 8 other states, and a survey 
administered to TANF officials in all 50 states and the District of 
Columbia.1 We conducted our work from August 2001 through 
February 2002, in accordance with generally accepted government 
auditing standards.
---------------------------------------------------------------------------
    \1\ We visited California, Illinois, Maryland, and New York and 
conducted telephone interviews with Colorado, Hawaii, Florida, 
Michigan, Massachusetts, Mississippi, Texas, and Wisconsin. The states 
were selected to represent a range of factors, including variation in 
caseload size and in TANF program funding choices. The survey had a 100 
percent response rate, although each state did not respond to all 
questions.
---------------------------------------------------------------------------
    In summary, of the 2.1 million cash assistance cases funded by 
federal TANF or state maintenance-of-effort dollars in the fall of 
2001,2 one-third of these cases, or 700,000, were composed 
of one or more children only. Because no adult in these families 
receives TANF or state MOE funded cash assistance, work requirements 
and time limits do not apply. Regarding work requirements, when PRWORA 
established federally mandated participation rates, it also included a 
``caseload reduction credit'' provision. This provision specifies that 
each state's mandated participation rate is to be reduced if its 
welfare caseload declines. Because of the dramatic declines in welfare 
caseloads that have occurred since 1996, states have generally faced 
greatly reduced mandated participation rates for the TANF programs. For 
example, in fiscal year 2000, caseload reduction credits reduced 
mandated participation rates to 0 in 31 states--instead of the mandated 
rate of 40 percent specified in the law. As a result, states have 
increased flexibility in determining the numbers of adults that are to 
be involved in work or work activities. Regarding time limits, after 
accounting for child-only cases, states excluded 11 percent of the 
remaining 1.4 million families with an adult from federal or state time 
limits. States' experiences with implementing work requirements and 
time limits highlight key issues of interest for the reauthorization of 
TANF provisions, including the relatively limited number of families 
that have reached their time limits so far and the future adequacy of 
the federal 20 percent extension.
---------------------------------------------------------------------------
    \2\ This represents the number of families receiving cash 
assistance during 1 month between October and December of 2001.
---------------------------------------------------------------------------
Background
    PRWORA made sweeping changes to national welfare policy, creating 
TANF and ending the federal entitlement to assistance for eligible 
needy families with children under Aid to Families With Dependent 
Children (AFDC). The Department of Health and Human Services (HHS) 
administers the TANF block grant program, which provides states with up 
to $16.5 billion each year through fiscal year 2002. TANF was designed 
to help needy families reduce their dependence on welfare and move 
toward economic independence. The law also greatly increased the 
discretion states have in the design and operation of their welfare 
programs, allowing states to determine forms of aid and the categories 
of families eligible for aid. TANF establishes time limits and work 
requirements for adults receiving aid and requires states to sustain 75 
to 80 percent of their historic level of welfare spending through a 
maintenance-of-effort requirement. In addition, TANF gives states 
funding flexibility, which allows states to exclude some families from 
federal time limits and work requirements.
TANF Establishes Time Limits and Work Requirements for Adults Receiving 
        Aid
    TANF establishes a 60-month time limit for families receiving aid. 
States have the option of establishing shorter time limits for families 
in their state. A state that does not comply with the TANF time limit 
can be penalized by a 5 percent reduction in its block grant. While the 
intent of TANF is to provide temporary, time-limited aid, federal time 
limits do not apply to all forms of aid or to all families receiving 
aid. First, states are only to count toward the 60-month time limit any 
month in which an individual receives a service or benefit considered 
``assistance,'' which is defined in the TANF regulations as cash or 
other forms of benefits designed to meet a family's ongoing basic 
needs.3 Second, time limits do not apply to the following 
types of cases:
---------------------------------------------------------------------------
    \3\ ``Assistance'' does not include things like nonrecurrent, 
short-term benefits, such as rent deposits or appliance repairs; work 
subsidies; work supports such as child care or transportation subsidies 
for working families; or any other services such as counseling, case 
management, and peer support that do not provide basic income support.
---------------------------------------------------------------------------
    1. Cases in which the adult in the household does not receive cash 
assistance, typically called ``child-only'' cases.4
---------------------------------------------------------------------------
    \4\ HHS has indicated that it would be inconsistent with statutory 
intent for states to simply remove adults from assistance units once 
they reach their 60-month time limit and then continue to use federal 
dollars to pay benefits to the children as a child-only unit. States 
may choose to use their MOE funds to do this.
---------------------------------------------------------------------------
    2. Families that received assistance while living in Indian country 
or an Native Alaskan village where 50 percent of the adults are not 
employed.
    Third, all states have the option to use federal funds to extend 
assistance beyond the federal 60-month limit for reasons of hardship, 
as defined by the state. States can extend assistance for up to 20 
percent of the average monthly number of families receiving assistance 
(``20 percent extension'').5 States can also extend 
assistance for victims of domestic violence through federally approved 
domestic violence waivers.6 Finally, assistance that is 
provided solely through state MOE is not subject to the federal time 
limit.
---------------------------------------------------------------------------
    \5\ In calculating the federal 20 percent extension, child-only 
cases are included in the denominator but not in the numerator. All 
things being equal, the larger the percentage of child-only cases in a 
state's caseload, the greater the number of families with adults whose 
time limit may be extended.
    \6\ States can elect the Family Violence Option allowing states to 
waive any TANF requirement, under certain conditions, for victims of 
domestic violence. If a state elects the Family Violence Option and 
waives the time limits for such recipients and later faces a penalty 
for extensions that exceed the 20 percent cap, the state may qualify 
for a reasonable cause penalty exception.
---------------------------------------------------------------------------
    TANF also establishes work requirements for adults receiving aid. 
After 2 years of assistance, or sooner if the state determines the 
recipient is ready, TANF adults are generally required to be engaged in 
work as defined by the state.7 In addition, TANF establishes 
required work participation rates--a steadily rising specified minimum 
percentage of adult recipients that must participate in federally 
specified work or work-related activities each year.8 States 
were required in federal fiscal year 2002 to meet a work participation 
rate of 50 percent for all TANF families with adult members--referred 
to as the rate for all families. States were also required to meet a 
much higher rate--90 percent--for two-parent families.9 
States must meet these work participation rates to avoid financial 
penalties. While states have generally met the work participation rate 
for all families, many states have faced financial penalties due to 
failure to meet the two-parent required rate in recent years. HHS 
issued penalty notices to 19 states in fiscal year 1997, 14 in fiscal 
year 1998, 9 in fiscal year 1999, and to 7 states in fiscal year 2000.
---------------------------------------------------------------------------
    \7\ States may not penalize parents with children under age 6 for 
not working if child care is not available. States have the flexibility 
to exclude other categories of recipients from work requirements, 
although they cannot remove these individuals from the work 
participation calculation.
    \8\ States may choose to exempt parents with children under age 1 
from calculation in the work participation rate. Work activities that 
count for federal participation rate purposes include employment, work 
experience programs, on-the-job training, community service, providing 
child care for other TANF recipients, job search, and (under certain 
circumstances) education and training.
    \9\ The two-parent work participation rate of 90 percent means that 
each two-parent family must participate in a federally defined work 
activity for an average of at least 35 hours per week and that a 
specified number of hours be attributable to specific work activities. 
A state may have one parent participate for all 35 hours, or both 
parents may share in the work activities. HHS issued penalties for not 
meeting the two-parent work participation rate in fiscal year 2000 to 
Alaska, Arkansas, Minnesota, Mississippi, New Mexico, North Carolina, 
and Wisconsin.
---------------------------------------------------------------------------
    In addition to establishing federal participation rate 
requirements, PRWORA specified that the required rates are to be 
reduced if a state's TANF caseload declines. States are allowed 
caseload reduction credits, which reduce each state's work 
participation requirement by one percentage point for each percentage 
point by which its average monthly caseload falls short of its fiscal 
year 1995 level (for reasons other than eligibility changes).
    In addition, federal time limits and work requirements may not 
apply in some states that were granted federal waivers to AFDC program 
rules in order to conduct demonstration programs to test state reforms.
States May Choose Various State Funding Options for Providing Cash 
        Assistance
    Previously, under AFDC, state funds accounted for 46 percent of 
total federal and state expenditures. Under PRWORA, the law requires 
states to sustain 75 to 80 percent of their historic level of spending 
on welfare through a maintenance-of-effort requirement to receive their 
federal TANF block grant. The federal TANF funds and state MOE funds 
can be considered more like funding streams than a single program and 
states may use their MOE to assist needy families in state programs 
other than their TANF programs. In fact, states have flexibility to 
expend their MOE funds for cash assistance in up to three different 
ways, some of which allow states to exclude some families from time 
limits and work requirements.
           A state may use its state MOE funds in three 
        different ways to provide cash assistance for needy families.
           Commingling: A state can provide TANF cash 
        assistance by commingling its state MOE with federal funds 
        within its TANF program.
           Segregating: A state can provide some TANF cash 
        assistance with state MOE accounted for separately from its 
        federal funds within its TANF program.
           Separating: A state can use its state MOE to provide 
        cash assistance to needy families in any one or more non-TANF 
        state programs, referred to as ``separate state programs.''
    Each state may choose one or more of these options to provide cash 
assistance. In some cases, in this testimony, we refer to the second 
and third options as using ``state-only'' funds when the distinction 
between segregating and separating funds is not necessary. In addition, 
we focus only on cash assistance and not on other forms of aid or 
services, including, for example, child care and transportation, for 
which time limits and work requirements generally do not apply.
    How a state structures its funds determines which TANF rules apply 
to the needy families being served. (See table 1.) When a state 
commingles funds, it must meet all TANF requirements. For example, 
states that commingle all their state MOE with federal funds are only 
able to exclude families from time limits through the 20 percent 
extension, cannot exclude families from counting towards the federal 
work participation rate, and cannot provide assistance to certain 
groups of legal immigrants.

    TABLE 1: APPLICATION OF KEY TANF RESTRICTIONS AND REQUIREMENTS ON STATE MOE FUNDS UNDER THE THREE FUNDING
                                                     OPTIONS
----------------------------------------------------------------------------------------------------------------
 ----------------------------------------------------------------------------------------------------------------
                                                  Application of PRWORA rules by state funding option
----------------------------------------------------------------------------------------------------------------
Key program requirements and           State TANF program with  State TANF program with  State MOE for needy
 restrictions for cash assistance.      federal or commingled    state MOE accounted      families in any non-
                                        funds.                   for separately from      TANF state program
                                                                 federal funds            (referred to as
                                                                 (referred to as          separate state
                                                                 segregated).             program)
Does 60-month time limit apply?        Yes, except for up to    No.....................  No
                                        20 percent of the cash
                                        assistance caseload.
Do work-activities count toward the    Yes....................  Yes a..................  No
 federal work participation rate?
Do restrictions on assistance to       Yes....................  No.....................  No
 immigrants apply? b
----------------------------------------------------------------------------------------------------------------
a With this option, states have the flexibility to serve families they might not otherwise be able to serve in
  TANF, such as certain legal immigrants, but at the same time count their work activities toward meeting the
  federal participation target rate.
b Immigrants arriving in the United States after August 22, 1996, are barred from the receipt of federal TANF
  assistance for a 5-year period.

                              ----------                              

    States may exclude families from time limits by funding their cash 
assistance with state MOE, either through ``segregated funds'' or in 
any non-TANF state programs. More specifically, any month of cash 
assistance funded solely by state MOE funds does not count toward the 
federal 60-month limit and may be provided to families who have reached 
their federal time limit. States may exclude families from federal time 
limits if they
           Stop the clock. States can ``stop the clock'' so 
        that a family's cash assistance does not count towards the 
        federal time limit.
           This is accomplished by funding any month of cash 
        assistance with state-only funds rather than with federal or 
        commingled federal and state dollars. For example, if a state 
        provides monthly cash assistance to working families with 
        state-only funds, those months of assistance do not count 
        toward the federal time limit. Extend the time limit. States 
        can provide cash assistance beyond the 60-month time limit by 
        using state-only funds. A state may extend a family's time 
        limit because it has determined that the adult needs more time 
        to prepare for and find employment.
    Finally, while not required by federal law, states may choose to 
apply time limits on their state-funded assistance. In this case, 
states may also decide to stop the clock or extend time limits for 
certain families.10
---------------------------------------------------------------------------
    \10\ Nineteen states have chosen a time limit shorter than 60 
months as allowed by PRWORA, with the most common limit being 24 
months.
---------------------------------------------------------------------------
    In addition, families provided cash assistance funded by state MOE 
through non-TANF state programs are not subject to federal work 
requirements, though states may choose to impose their own work 
requirements on these families.
One-Third of Families Receiving Cash Assistance Are Child-Only Cases 
        Not Subject to Federal Work Requirements or Time Limits
    States reported that in the fall of 2001, 2.1 million families 
received cash assistance funded with federal TANF or state MOE dollars, 
with about 700,000, or one-third, of these families composed of 
children only. Generally, child-only cases are not subject to work 
requirements or time limits.11 The most common types of 
child-only cases were families in which the
---------------------------------------------------------------------------
    \11\ Connecticut has a small number of state-funded child-only 
cases that are subject to a state-imposed time limit on state-funded 
assistance. The time limit exclusion rules in Connecticut's separate 
state program are the same for both recipient and non recipient 
parents.
---------------------------------------------------------------------------
           caregiver is a nonparent, such as a relative, often 
        a grandparent (40 percent);
           parent is receiving Social Security or Supplemental 
        Security Income and not eligible for TANF (25 percent);
           parent is a noncitizen ineligible for federally 
        funded TANF (23 percent);12 and
---------------------------------------------------------------------------
    \12\ Some households may include parents who are illegal immigrants 
or legal immigrants ineligible for cash assistance in addition to 
children who are citizens and eligible for cash assistance.
---------------------------------------------------------------------------
           parent is subject to sanctions (7 percent). (See 
        figure 1.)13
---------------------------------------------------------------------------
    \13\ States can sanction individuals not complying with TANF 
program requirements by taking away part or all their TANF cash 
benefits and possibly other public benefits as well.
---------------------------------------------------------------------------
    The breakdown of child-only cases varied significantly across 
states, however. For example, child-only cases in which the parent is 
an ineligible noncitizen ranged from 0 percent in ten states to 39 
percent in California and 77 percent in Texas; this variation is likely 
due to the variation in immigrant populations across the states. (For 
more information on each state's child-only caseload, see Appendix I.)

                 Figure 1: Reasons for Child-Only Cases
[GRAPHIC] [TIFF OMITTED] T8903A.001

    Note: States were only able to report on 434,420 of the 700,000 
federally funded child-only cases. Eighteen states had no data on the 
reasons for their child-only cases.
    Source: GAO survey.
                               __________
States Use Flexibility Under PRWORA To Exempt Some Families From 
        Federal Work Requirements
    Reduced federal participation targets--due to declining caseloads 
and the caseload reduction credit--and states' use of their MOE funds 
in non-TANF programs give states considerable flexibility in 
implementing work requirements. (For more information on how states use 
their MOE funds, see Appendix II). Since the implementation of welfare 
reform, states have experienced strong economic growth and welfare 
caseloads have declined dramatically, from 4.4 million in August 1996 
to 2.1 million as of September 2001, marking a 52 percent decline in 
the number of families receiving cash welfare. The work participation 
target rate for every state in fiscal year 2002 is 50 percent for all 
families. However, once the caseload reduction credit is taken into 
account, the target rates can be greatly reduced. For example, as shown 
in table 2, the actual rate for all families reported by HHS for fiscal 
year 2000 was zero in 31 states and less than 25 percent in all but two 
states.

  TABLE 2: FISCAL YEAR 2000 REQUIRED ALL-FAMILY WORK PARTICIPATION RATE
FOR EACH STATE AFTER FACTORING IN CASELOAD REDUCTION CREDIT (STATED RATE
                             WAS 40 PERCENT)
                       [Target Numbers in Percent]
------------------------------------------------------------------------
              State                 Target         State          Target
------------------------------------------------------------------------
Alabama..........................        0  Montana............        0
Alaska...........................       11  Nebraska...........       14
Arizona..........................        0  Nevada.............        0
Arkansas.........................        6  New Hampshire......        0
California.......................        8  New Jersey.........        1
Colorado.........................        0  New Mexico.........       17
Connecticut......................       28  New York...........        5
Delaware.........................        0  North Carolina.....        0
District of Columbia.............       11  North Dakota.......        0
Florida..........................        0  Ohio...............        0
Georgia..........................        0  Oklahoma...........        0
Hawaii...........................       25  Oregon.............        0
Idaho............................        0  Pennsylvania.......        0
Illinois.........................        0  Rhode Island.......       24
Indiana..........................        0  South Carolina.....        0
Iowa.............................        1  South Dakota.......        3
Kansas...........................       17  Tennessee..........        0
Kentucky.........................        0  Texas..............        0
Louisiana........................        0  Utah...............        6
Maine............................        9  Vermont............       40
Maryland.........................        1  Virginia...........        0
Massachusetts....................        0  Washington.........        2
Michigan.........................        0  West Virginia......        0
Minnesota........................        9  Wisconsin..........        0
Mississippi......................        0  Wyoming............        0
Missouri.........................        0
------------------------------------------------------------------------
Source: The Administration for Children and Families, HHS.

                                 ______
                                 
    As a result, states have had increased flexibility in determining 
the numbers of adults that are to be working or preparing for work and 
the types of activities required. For states to count families' 
activities towards the work participation rate, families have to be 
participating in federally approved work activities. In a previous 
report, we found that some states included recipients in a range of 
work and work-preparation activities that extend beyond those that meet 
federal work participation requirements, particularly to meet the needs 
of recipients considered hard to employ.14 Officials in one 
state told us that because the work participation rates are so low due 
to caseload reduction credits, states have more flexibility in the 
types of activities or services provided, for example, substance abuse 
treatment or mental health services, without fear of not meeting their 
federal work participation rates. In other cases, the lower target 
rates give states more flexibility in exempting TANF recipients 
considered hard to employ from meeting work requirements, as we found 
in our report on TANF recipients with mental and physical 
impairments.15
---------------------------------------------------------------------------
    \14\ For more information, see U.S. General Accounting Office, 
Welfare Reform: Moving Hard-to-Employ Recipients into the Workforce, 
GAO-01-368 (Washington, D.C.: Mar. 15, 2001).
    \15\ For more information on TANF and persons with disabilities, 
see our report entitled: U.S. General Accounting Office, Welfare 
Reform: More Coordinated Federal Effort Could Help States and 
Localities Move TANF Recipients With Impairments Toward Employment, 
GAO-02-37 (Washington, D.C.: Oct. 31, 2002).
---------------------------------------------------------------------------
    In addition to the flexibility provided by reduced federal target 
rates, many states have increased work requirement flexibility by using 
state MOE funds to provide cash assistance through non-TANF programs, 
as allowed by PRWORA. Twenty-six states use state MOE funds to provide 
cash assistance through separate state programs, which allows states to 
exclude families from federal work requirements and to serve certain 
immigrants ineligible for federal TANF. Sixteen of these states provide 
cash assistance to two-parent families through these programs. Several 
state officials told us they provide aid in this way to avoid the risk 
of financial penalties for failing to meet the federal two-parent work 
participation rate. State officials told us that two-parent families 
often have as many or more challenges as single parents, making the 
higher target rate for two-parent families difficult to 
meet.16
---------------------------------------------------------------------------
    \16\ The caseload reduction credit would also decrease the 90 
percent work participation requirement for two-parent families; 
however, some states told us that they still moved two-parent families 
into separate state programs because they did not want to rely on 
caseload reductions to avoid a financial penalty.
---------------------------------------------------------------------------
    While states expressed concern about failing to meet the federal 
target rate for two-parent families, all 16 of these states imposed 
their own state work requirements on these families. Thirteen of the 26 
states used state MOE in separate programs to provide cash assistance 
to certain legal immigrants not eligible for federal TANF aid; these 13 
states still apply a state work requirement for these families as well. 
Overall, approximately nine-tenths of the families receiving cash 
assistance in separate state programs are still subject to a state work 
requirement. While states generally imposed work requirements, about 
half of them also have policies in place to exclude families facing 
significant barriers to work from work requirements. For example, 13 
states exclude families with an adult who is disabled and 13 states 
exclude families that care for someone with a disability.
States Excluded 11 Percent of Adult Families From Federal and State 
        Time Limits
    States generally targeted time limit exclusions to families they 
considered hard to employ, families that were working but not earning 
enough to move off of TANF, and families that were cooperating with 
program requirements but had not yet found employment. During fall 
2001,17 states excluded from federal or state time limits 11 
percent of the 1.4 million cash assistance families with adults. The 
number of families excluded from time limits may increase in the future 
because most families have not yet reached their federal or state-
imposed cash assistance time limit.
---------------------------------------------------------------------------
    \17\ In our survey, we asked states to provide us information for 
the most recent month for which they had complete data. Most states 
reported numbers from a month in the first quarter of federal fiscal 
year 2002.
---------------------------------------------------------------------------
Federal 20 Percent Extension and State-Funded Time Limit Exclusion 
        Policies Generally Target Working or Hard-to-Employ Families
    States targeted time limit exclusions to families they considered 
``hard to employ'', families that were working but not earning enough 
to move off of TANF, and families that were cooperating with program 
requirements. The majority of states excluded ``hard-to-employ'' 
families in which the parent had a disability or was caring for a child 
with a disability, families dealing with domestic violence, and 
families with a head of household of advanced age. (See figure 2.) Some 
of these exclusions are granted on a temporary basis (such as for 
disabled recipients pending transfer to the Supplemental Security 
Income program), and others are granted for longer periods of time 
(such as for family heads of advanced age).

  Figure 2: Number of States with Exclusions to Federal or State Time 
                   Limits by Recipient Characteristic
[GRAPHIC] [TIFF OMITTED] T8903B.002

    Source: GAO survey.
                                 ______
                                 
    Twenty-two states exclude working families from time limits, either 
through the federal 20 percent extension or by using state-only funds. 
Maryland and Illinois, for example, ``stop the clock'' for working 
families by funding them with state-only dollars. Officials from both 
states told us that their states adopted this policy to reward working 
families for complying with program requirements.
    States that exclude families by using state-only funds use similar 
criteria to those used by states that rely solely on the federal 20 
percent hardship extension. Using the 20 percent extension, states are 
able to extend time limits for a broad range of families, such as 
families cooperating with program requirements or making a ``good faith 
effort'' to find employment. For example, officials from Michigan, a 
state that commingles all of its state funds with federal funds, told 
us that they will use the 20 percent extension for all recipients 
following the rules of the program; if the number of families they want 
to provide and extension to begins to exceed 20 percent, they plan to 
continue providing assistance through state funds. Almost half of the 
states exclude families making a good faith effort to find employment.
While States Had Excluded 11 Percent of Families with Adults from Time 
        Limits as of Fall 2001, This Percentage May Increase as More 
        Families Reach Their Time Limits
    States have excluded from time limits 11 percent of the 
approximately 1.4 million families with adults receiving federal--or 
state-funded cash assistance. (See Appendix III for the percent of 
exclusions by state.) As shown in figure 3, 45 percent of these 
families--mostly in Illinois, Massachusetts, and New York--were 
excluded through states use of state-only funds. An additional 43 
percent of the families were excluded from time limits under federal 
waivers granted to states before welfare reform to conduct 
demonstration programs. Many of these waivers remain in 
effect.18
---------------------------------------------------------------------------
    \18\ Eight states exclude federally funded families from time 
limits because of pre-existing waivers to their welfare programs that 
allow them to exempt federally funded families from the federal time 
limit. These states are Arizona, Hawaii, Indiana, Nebraska, Oregon, 
South Carolina, Tennessee, and Virginia. In addition, Connecticut was 
operating under a waiver through September 2001. As a result, the 
federal clock did not start on federally funded families that were 
exempt from Connecticut's state time limit until October 2001. 
Therefore, Connecticut can extend cash assistance to some of its 
federally funded families well beyond 60 months without using the 
federal 20 percent extension.
---------------------------------------------------------------------------

Figure 3: Percentage of Families with Adults Excluded from Time Limits 
                        and Method of Exclusion
[GRAPHIC] [TIFF OMITTED] T8903C.003

    Note: Exclusions do not total 100% due to incomplete data from 
states. Delaware was unable to provide us with caseload data and is not 
included in this figure.
    Source: GAO survey.

                                 ______
                                 
    Even though states are free to exclude all state-funded families 
from time limits, 64 percent of state-funded families that include 
adults were still subject to a time limit imposed by the state. Twenty-
six of the 33 states with state-only funds apply a state time limit to 
some or all of their state-funded cases. (See Appendix IV for 
additional information on state choices regarding funding and time 
limits.)
    The percentage of the caseload that is excluded from time limits 
may increase, since most families have not reached their time limit. In 
22 states TANF had not been in effect long enough for families to reach 
either the federal or the state time limit by the time we conducted our 
survey.19 Even in those states where it was possible to have 
received 60 months of cash assistance, many families had not reached 
their time limit because they have cycled on and off welfare, slowing 
their accrual of time on assistance. As a result, only 15 states had 
begun to use the federal 20 percent hardship extension, and all of 
these states were applying it to less than 6 percent of their total 
caseload. One state we visited, California, told us it estimated that 
over 100,000 families with adults would reach the federal time limit in 
the next year. California plans to use state-only funds to continue aid 
beyond 60 months to children by removing the adult from the case. 
California also plans to continue aid to families that are making a 
good faith effort to find employment and to families that are hard to 
employ because the adult is aged, disabled, caring for a disabled 
family member, or experiencing domestic violence.
---------------------------------------------------------------------------
    \19\ States responded to our survey using their most recent month 
of data available--generally a month in the first quarter of fiscal 
year 2002 (October through December of 2001).
---------------------------------------------------------------------------
States' Experiences with TANF Highlight Issues for Reauthorization
    States' experiences with implementing TANF time limits and work 
requirements for families receiving cash assistance highlight key 
issues related to reauthorization of TANF provisions. Officials from 
the four states we visited and eight states we interviewed shared their 
views on work requirements and time limits, and the flexibility they 
have to implement them. Some state officials commented on the limited 
extent of states' experiences with time limits, given that many 
families have not yet reached their time limits, as well as their 
inexperience with operating TANF during times of state budget 
pressures. State officials also highlighted their concerns about the 
federal 90 percent work participation requirements for two-parent 
families.
States Support TANF Flexibility, but Some States Have Concerns
    In general, state officials we spoke with were supportive of time 
limits and work requirements. For example, Maryland officials said that 
one advantage of time-limits assistance and work requirements was that 
families understood that the receipt of cash assistance was no longer 
an entitlement, thereby changing the culture of welfare. In addition, 
another Maryland official noted that time limits encourage caseworkers 
to link families, particularly the hard to employ, to the services they 
need to become self-sufficient. States also said that, for the most 
part, flexibility in implementing time limits and work requirements 
were important in allowing them to meet the needs of special 
populations while supporting the federal goal of reducing dependency. 
The flexibility in implementing their own time limits helps to ensure 
that states can adapt the federal program to meet state and local needs 
while still emphasizing the transitional nature of cash assistance 
through time limits.
    While state officials were generally supportive of TANF 
flexibility, officials in almost all of the states we spoke with 
expressed the desire to have more flexibility in counting education and 
training towards the federal work participation rate. Some states 
officials also expressed a desire to count activities such as mental 
health and substance abuse counseling towards the federal work 
participation rate. The states that did not opt for additional 
flexibility through the use of state-only funds expressed two general 
concerns. First, they were uncertain about the consequences of their 
funding flexibility under TANF. A Mississippi TANF official told us 
that the state plans to follow the federal regulations rather than risk 
penalties by establishing its own program rules that could become 
confused with the federal regulations. Second, Colorado state officials 
were concerned about the potential administrative burden that could 
result from creating separate funding or programs that used state-only 
funds.
Changing Economic Conditions May Pose Difficult Choices for States in 
        the Future
    Up until very recently, TANF has been implemented under conditions 
of strong economic growth, with declining cash assistance caseloads and 
the resulting increase in resources available to states to assist 
families. This has fostered increased flexibility in how state 
officials use their federal TANF and state maintenance-of-effort 
dollars. Several states we interviewed now face budget pressures and 
increasing cash assistance caseloads, which could affect the policy 
choices they make about funding mechanisms and time limit exclusions in 
the future. This could affect some states' choices regarding continued 
support for families that take longer to become self-sufficient. 
California state officials noted that its plan to continue aid for all 
children whose parents have reached time limits may pose a future 
financial burden on the state.
States' Experiences with Adequacy of the 20 Percent Federal Extension 
        May Change as More Families Reach Time Limits
    State officials generally thought the 20 percent federal extension 
was adequate now, but were less sure about the future, given that many 
families have not yet reached the 60-month time limit. Given that 
states' experiences with families reaching their time limits is still 
limited, it is important to emphasize that much remains unknown 
nationwide about the numbers, characteristics, and experiences of 
families who have reached or are close to reaching federal time limits 
on assistance. In the past we have recommended that HHS work with state 
officials on this issue to promote research and provide guidance that 
would encourage and enable state officials to identify who has reached 
the 60-month time limit before they are able to work. HHS has taken 
steps to do so.20
---------------------------------------------------------------------------
    \20\ For more information, see GAO-01-368.
---------------------------------------------------------------------------
States Support the Goal of Helping Two-Parent Families Reduce Their 
        Dependency but Would Like More Flexibility in the Federal Two-
        Parent Work Participation Rate
    State officials cited their difficulties in meeting the federal 
work participation target rate for two-parent families and a few 
discussed their solutions--serving two-parent families in separate 
state programs to avoid potential financial penalties. These states 
typically apply their own work requirements and time limits to these 
families, demonstrating the states' expectation that these families 
take steps to reduce dependency in the absence of a federal requirement 
to do so.
    Mr. Chairman, this concludes my prepared statement. I will be happy 
to respond to any questions you or other members of the subcommittee 
may have.
GAO Contacts and Acknowledgments
    For future contacts regarding this testimony, please call Cynthia 
M. Fagnoni at (202) 512-7215 or Gale Harris at (202) 512-7235. 
Individuals making key contributions to this testimony included Sigurd 
Nilsen, Katrina Ryan, Elisabeth Anderson, Kara Kramer, Kim Reniero, and 
Patrick DiBattista.

                    APPENDIX I: STATES' CHILD-ONLY CASELOADS AND REASONS FOR CHILD-ONLY CASES
----------------------------------------------------------------------------------------------------------------
                                                 Percentage of TANF and state MOE child-only cases by reason
                                           ---------------------------------------------------------------------
                                            Percentage
                                             of total     Parent    Parent is  Parent is
                                             caseload   receiving  ineligible   subject   Nonparental    Other
                                              that is       SSI    noncitizen      to      caregivers    reason
                                            child-only                         sanctions
----------------------------------------------------------------------------------------------------------------
Alabama...................................          45  .........  ..........  .........  ...........  .........
Alaska....................................          19         39           6          0          55           0
Arizona...................................          44          0          33          0          63           4
Arkansas..................................          42  .........  ..........  .........  ...........  .........
California................................          34         14          39         16          23           8
Colorado..................................          38         27           0          0          55          17
Connecticut...............................          34         40           5          1          54           0
Delaware..................................  ..........  .........  ..........  .........  ...........
D.C.......................................          19  .........  ..........  .........  ...........  .........
Florida...................................          57  .........  ..........  .........  ...........  .........
Georgia...................................          46          0           0          0         100           0
Hawaii....................................          13  .........  ..........  .........  ...........  .........
Idaho.....................................          42          0           0          0         100           0
Illinois..................................          40         58          10          0          28           4
Indiana...................................          20         42           4         13          41           0
Iowa......................................          25  .........  ..........  .........  ...........  .........
Kansas....................................          33         35           4          5          56           0
Kentucky..................................          44          0           0          0         100           0
Louisiana.................................          45         45           0          0          55           0
Maine.....................................          24  .........  ..........  .........  ...........  .........
Maryland..................................          33         18           1          1          76           5
Massachusetts.............................          37  .........  ..........  .........  ...........  .........
Michigan..................................          32         54           3          3          40           0
Minnesota.................................          21         47          11          0          40           2
Mississippi...............................          45  .........  ..........  .........  ...........  .........
Missouri..................................          25         50           1          0          49           0
Montana...................................          22         37           7          0          56           0
Nebraska..................................          31         64           0          0          36           0
Nevada....................................          31          9          12          0          76           3
New Hampshire.............................          29         30           0          0          51          19
New Jersey................................          34  .........  ..........  .........  ...........  .........
New Mexico................................          15  .........  ..........  .........  ...........  .........
New York..................................          32  .........  ..........  .........  ...........  .........
North Carolina............................          50  .........  ..........  .........  ...........  .........
North Dakota..............................          25         18           0         32          50           0
Ohio......................................          45  .........  ..........  .........  ...........  .........
Oklahoma..................................          44         34           6          0          60           0
Oregon....................................          35         28          25          3          37           7
Pennsylvania..............................          28  .........  ..........  .........  ...........  .........
Rhode Island..............................          18         52          32          0          16           0
South Carolina............................          45         41           1          0          58           0
South Dakota..............................          57         22           0          0          78           0
Tennessee.................................          28         41           0          0          58           0
Texas.....................................          34          0          77          0           0          23
Utah......................................          29         30           0          0          70           0
Vermont...................................          16         56           0          0          44           0
Virginia..................................          27  .........  ..........  .........  ...........  .........
Washington................................          32         28          21          0          48           3
West Virginia.............................          31  .........  ..........  .........  ...........  .........
Wisconsin.................................          61         51           0          0          49           0
Wyoming...................................          73  .........  ..........  .........  ...........  .........
----------------------------------------------------------------------------------------------------------------

                                 ______
                                 

                   APPENDIX II: STATE FUNDING CHOICES

    Most states use some form of state MOE funding to provide cash 
assistance to families. Eighteen states relied solely on federal or 
commingled federal and state funds in their TANF programs to provide 
cash assistance, as shown in figure 4. The other 33 states used at 
least one of the state MOE funding options in addition to commingled 
funds: 7 had segregated state funds; 17 had separate state programs; 9 
had both segregated funds and separate state programs.
Figure 4: Number of States That Use Different Funding Mechanisms to 
        Expend State Funds on Cash Assistance
        [GRAPHIC] [TIFF OMITTED] T8903D.004
        
    Source: GAO survey.

                                 ______
                                 
    States across the nation have opted to use state MOE funds to 
provide cash assistance. (See Table 3.) States with larger caseloads 
are more likely to use segregated funds or separate state programs than 
smaller states; similarly, states with the smallest caseloads are more 
likely to commingle all of their state and federal funds.

                       TABLE 3: FUNDING STREAMS IN ALL STATES AND THE DISTRICT OF COLUMBIA
----------------------------------------------------------------------------------------------------------------
                                                                                         Commingled + segregated
           Commingled funds            Commingled + segregated   Commingled + separate       + separate state
                                             state funds             state programs              programs
----------------------------------------------------------------------------------------------------------------
Alaska...............................  Arizona................  Alabama................  California.
Arkansas.............................  Massachusetts..........  Georgia................  Connecticut.
Colorado.............................  Minnesota..............  Hawaii.................  District of Columbia.
Idaho................................  Nebraska...............  Indiana................  Delaware.
Iowa.................................  Oregon.................  Maine..................  Florida.b
Kansas...............................  Pennsylvania...........  Missouri...............  Illinois.
Kentucky.............................  Washington.............  Montana................  Maryland.
Louisiana............................  .......................  Nevada.................  Rhode Island.
Michigan.............................  .......................  New Jersey.............  Vermont.
Mississippi..........................  .......................  New Mexico.............  .......................
North Carolina a.....................  .......................  New York...............  .......................
North Dakota.........................  .......................  Tennessee..............  .......................
New Hampshire........................  .......................  Texas..................  .......................
Ohio.................................  .......................  Utah...................  .......................
Oklahoma.............................  .......................  Virginia...............  .......................
South Carolina.......................  .......................  Wisconsin..............  .......................
South Dakota.........................  .......................  Wyoming................  .......................
West Virginia........................  .......................  .......................  .......................
----------------------------------------------------------------------------------------------------------------
a North Carolina uses only federal funds to provide cash assistance
b Florida has segregated and separate state programs but no federal/commingled.
Source: GAO survey.

                                 ______
                                 
    Even though two-thirds of the states have opted to use segregated 
funds, separate state programs, or both to provide cash assistance, 
only 11 percent of the total number of families receiving cash 
assistance is funded with these funds.

 APPENDIX III: PERCENTAGE OF TANF OR MOE FAMILIES WITH ADULT RECIPIENTS
        IN EACH STATE NOT SUBJECT TO FEDERAL OR STATE TIME LIMITS
------------------------------------------------------------------------
            State               Percentage       State        Percentage
------------------------------------------------------------------------
Alabama......................            1  Montana........            0
Alaska.......................            0  Nebraska.......           26
Arizona......................           76  Nevada.........            0
Arkansas.....................            0  New Hampshire..            3
California...................            0  New Jersey.....            0
Colorado.....................            0  New Mexico.....            0
Connecticut..................           27  New York.......           28
Delaware.....................          (a)  North Carolina.            0
D.C..........................            2  North Dakota...            0
Florida......................            2  Ohio...........            4
Georgia......................            0  Oklahoma.......            1
Hawaii.......................           27  Oregon.........           97
Idaho........................            0  Pennsylvania...            2
Illinois.....................           34  Rhode Island...            6
Indiana......................            7  South Carolina.           26
Iowa.........................            0  South Dakota...            0
Kansas.......................            1  Tennessee......           29
Kentucky.....................            0  Texas..........            0
Louisiana....................            0  Utah...........            4
Maine........................           25  Vermont........            7
Maryland.....................            9  Virginia.......           54
Massachusetts................           53  Washington.....            0
Michigan.....................            8  West Virginia..            0
Minnesota....................           10  Wisconsin......            0
Mississippi..................            0  Wyoming........            6
Missouri.....................            6    .............
------------------------------------------------------------------------
a Delaware was not able to provide us with data on the families excluded
  from time limits in its caseload.
Source: GAO survey.

                                 ______
                                 

   APPENDIX IV: STATE-BY-STATE INFORMATION ON STATE FUNDING, APPLICATION OF TIME LIMITS, AND USE OF 20 PERCENT
                                                    EXTENSION
----------------------------------------------------------------------------------------------------------------
                                                                         Apply state
                                                           Have state    time limit     Have not
                                                          MOE funds in   to some/all     reached     Were using
                                                           segregated     families    federal and/   20 percent
                         States                           and separate     served       or state    extension at
                                                              state        through     time limit      time of
                                                            programs      state MOE    at time of      survey
                                                                            funds        survey
----------------------------------------------------------------------------------------------------------------
Total...................................................         (33)          (26)          (22)          (15)
Alabama.................................................            X             X   ............            X
Alaska..................................................  ............  ............  ............            X
Arizona.................................................            X   ............  ............  ............
Arkansas................................................  ............  ............  ............  ............
California..............................................            X             X             X   ............
Colorado................................................  ............  ............  ............            X
Connecticut.............................................            X             X   ............            X
Delaware................................................            X             X   ............          (a)
DC......................................................            X   ............            X   ............
Florida.................................................            X             X   ............  ............
Georgia.................................................            X             X   ............  ............
Hawaii..................................................            X             X             X   ............
Idaho...................................................  ............  ............  ............  ............
Illinois................................................            X             X             X   ............
Indiana.................................................            X             X   ............  ............
Iowa....................................................  ............  ............            X   ............
Kansas..................................................  ............  ............  ............            X
Kentucky................................................  ............  ............            X   ............
Louisiana...............................................  ............  ............            X   ............
Maine...................................................            X   ............  ............            X
Maryland................................................            X             X             X   ............
Massachusetts...........................................            X             X   ............  ............
Michigan................................................  ............  ............  ............            X
Minnesota...............................................            X             X   ............            X
Mississippi.............................................  ............  ............  ............            X
Missouri................................................            X             X             X   ............
Montana.................................................            X             X             X   ............
Nebraska................................................            X             X   ............  ............
Nevada..................................................            X             X             X   ............
New Hampshire...........................................  ............  ............  ............            X
New Jersey..............................................            X             X             X   ............
New Mexico..............................................            X             X             X   ............
New York................................................            X   ............            X             X
North Carolina..........................................  ............  ............  ............  ............
North Dakota............................................  ............  ............            X   ............
Ohio....................................................  ............  ............  ............            X
Oklahoma................................................  ............  ............  ............            X
Oregon..................................................            X             X   ............  ............
Pennsylvania............................................            X   ............            X   ............
Rhode Island............................................            X             X             X   ............
South Carolina..........................................  ............  ............  ............  ............
South Dakota............................................  ............  ............            X   ............
Tennessee...............................................            X             X   ............  ............
Texas...................................................            X             X             X   ............
Utah....................................................            X             X   ............            X
Vermont.................................................            X   ............            X   ............
Virginia................................................            X             X   ............  ............
Washington..............................................            X             X             X   ............
West Virginia...........................................  ............  ............            X             X
Wisconsin...............................................            X             X   ............  ............
Wyoming.................................................            X   ............  ............  ............
----------------------------------------------------------------------------------------------------------------
a Delaware was not able to provide data on their use of the federal 20 percent extension.
Source: GAO survey.

                                 ______
                                 
    Related GAO Products
    Welfare Reform: More Coordinated Federal Efforts Could Help States 
and Localities Move TANF Recipients with Impairments Toward Employment. 
GAO-02-37. Washington, D.C.: October 31, 2001.
    Welfare Reform: Challenges in Maintaining a Federal-State Fiscal 
Partnership. GAO-01-828. Washington, D.C.: August 10, 2001.
    Welfare Reform: Moving Hard-to-Employ Recipients Into the 
Workforce. GAO-01-368. Washington, D.C.: March 15, 2001.
    Welfare Reform: Work-Site-Based Activities Can Play an Important 
Role in TANF Programs. GAO/HEHS-00-122. Washington, D.C.: July 28, 
2000.
    Welfare Reform: Improving State Automated Systems Requires 
Coordinated Federal Effort. GAO/HEHS-00-48. Washington, D.C.: April 27, 
2000.
    Welfare Reform: State Sanction Policies and Number of Families 
Affected. GAO/HEHS-00-44. Washington, D.C.: March 31, 2000.
    Welfare Reform: Assessing the Effectiveness of Various Welfare-to-
Work Approaches. GAO/HEHS-99-179. Washington, D.C.: September 7, 1999.
    Welfare Reform: Information on Former Recipients' Status. GAO/HEHS-
99-48. Washington, D.C.: April 28, 1999.
    Welfare Reform: States' Experiences in Providing Employment 
Assistance to TANF Clients. GAO/HEHS-99-22. Washington, D.C.: February 
26, 1999.

                                

    Chairman Herger. Thank you very much, Ms. Fagnoni.
    Maybe at this time, before going into questioning, the 
Ranking Member from Maryland would like to make an opening 
statement.
    Mr. Cardin. Thank you, Mr. Herger. Let me thank the 
Chairman. I apologize for being a little bit late. I had a 
morning meeting in Baltimore and sometimes the commute between 
Baltimore and Washington gets a little bit longer because of 
some of the road construction. If Congress would only 
appropriate the right amount of money for the roads, I could 
get here on time.
    [Laughter.]
    Mr. Cardin. Mr. Chairman, over the last 6 years, the 
percentage of welfare recipients who are working has tripled. 
Furthermore, the percentage of never-married mothers who are 
working has climbed from less than 50 percent to almost 70 
percent. Many of the women in this group have left welfare for 
work.
    Now, obviously, this has been as a result of the TANF 
legislation passed 5 years ago. It has been as a result of a 
growing economy. We have also made work pay by increasing the 
earned income tax credit. All of this has contributed to the 
fact that we have more people working off of the welfare rolls. 
I find that noteworthy, despite the fact that I think most 
States would agree that the Federal work participation 
requirement did not really mean that much because of the credit 
that was available on people coming off of the welfare rolls.
    I make that point, Mr. Chairman, because the States have 
acted responsibly without a Federal mandate on the work 
requirements, effectively. So I think we need to understand 
that the trust that we had in the States 5 years ago was well 
placed.
    As we now look at the next step in welfare reform, I think 
we need to be somewhat cautious about being so prescriptive on 
the work requirements and taking away flexibility from the 
States that it makes it more difficult for the States to really 
carry out the intent of welfare reform.
    So, yes, I believe very strongly in a work requirement and 
a work requirement that is meaningful. In fact, the legislation 
that I filed on behalf of my Democratic colleagues changed the 
credit from the caseload reduction to the employment so that we 
offer positive incentives for finding employment for people 
coming off the welfare rolls. But I just urge us not to be so 
prescriptive and restrictive to the States that they really 
cannot accomplish the purpose of welfare reform.
    I am concerned that some of the requirements that are 
proposed by the President could, in fact, work just the 
reverse. It could encourage the States to go into work there 
rather than into private sector employment, and our objective 
is to get people into private sector employment, not into 
workfare jobs. I am concerned that by the work requirements 
that have been put into the President's proposal that we may 
actually be contrary to the trend we have seen over the last 5 
years of finding private sector employment for the people 
coming off of welfare.
    I think that is also true with the fact that the 
President's budget does not provide any additional funds for 
child care. If we are going to increase the work participation 
rules, then obviously we are going to have to put more 
attention on child care. If, in fact, there are no additional 
resources put on child care, to a certain degree, I think this 
becomes an unfunded mandate on the States and something this 
Committee needs to take a very careful look at.
    So, Mr. Chairman, I look forward to the panel that we have. 
I look forward to our questioning of Ms. Fagnoni and her work 
with the panel that you have brought together so that we can 
come to a meaningful work requirement within the TANF 
reauthorization, one that affords the States the flexibilities 
that they need in order to make sure people not only come off 
the welfare rolls but have meaningful employment and can take 
care of their needs and do not have to live in poverty.
    [The opening statement of Mr. Cardin follows:]
 Opening Statement of the Hon. Benjamin L. Cardin, a Representative in 
                  Congress from the State of Maryland
    Mr. Chairman, over the last six years, the percentage of welfare 
recipients who are working has tripled. Furthermore, the percentage of 
never-married mothers who are working has climbed from less than 50% to 
almost 70%. Many of the women in this group have left welfare for work.
    Obviously the strength of the economy over the last eight years, 
plus the work supports enacted by Congress over the last decade, 
especially the increase in the Earned Income Tax Credit, have 
substantially contributed to this trend. But I believe that welfare 
reform also has played a positive role in raising employment levels. 
Interestingly, States have managed to achieve this progress without 
massive work participation requirements coming from Washington. As we 
have heard before, and will hear again today, the caseload reduction 
credit greatly reduced or eliminated the Federal participation rates 
under TANF for every State.
    This raises a key question. If welfare reform has been successful 
in promoting work without Federal work participation requirements, why 
does the Administration believe that much stricter Federal requirements 
are now central to the continued success of welfare reform?
    I do not have a problem with replacing the current caseload 
reduction credit with an employment credit. In legislation that I 
introduced earlier this year, I proposed just such a change in order to 
reward States for helping people leave welfare for work, rather than 
simply exiting the rolls. However, I am concerned that drastically 
increasing the work participation rates and hours on the States, as 
proposed by the Administration, could actually have a harmful impact on 
the States efforts to move welfare recipients into real jobs.
    Forcing States to focus time, money and effort on enrolling welfare 
recipients in unpaid, short-term work experience programs could 
distract them from their efforts to move welfare recipients into long-
term, wage-paying jobs. For example, States could be forced to cut 
child care assistance for former welfare recipients and the working 
poor in order to pay for the day care costs of participants in workfare 
programs, especially since the Administration's plan does not include a 
single dime of new money for child care.
    Furthermore, research suggests that unpaid work experience programs 
are not particularly beneficial in promoting long-term employment 
compared to other activities. For example, a study conducted by the 
University of Washington found that State's workfare program was less 
effective in boosting future earnings of welfare leavers compared to 
vocational training or even simple job search activities.
    Perhaps that is one of the reasons that so few States have 
implemented workfare programs over the last six years. I do not see any 
reason why the Federal government should demand they do so now.
    Finally, before I conclude, let me say a word about the five-year 
limit on TANF benefits. I believe that time limits send an important 
and necessary message to welfare recipients, namely that they need to 
take responsibility for their lives and attempt to move toward self-
sufficiency.
    But once an individual heeds that call, and they begin working and 
doing everything else we are asking of them, I believe States should 
have the flexibility to provide a wage subsidy to that person with TANF 
funds, without that assistance counting toward the individual's time 
limit. Considering that many welfare recipients may find low-wage, 
less-than-full-time employment, we should not discourage States from 
providing wage supplements to make work pay and to help working 
families escape poverty.
    Thank you.

                                

    Chairman Herger. I thank the Ranking Member for his 
comments. Now we will turn to questions, and the gentlelady 
from Connecticut, Mrs. Johnson, to inquire.
    Mrs. Johnson. Thank you very much for your testimony, Ms. 
Fagnoni. You did move through a lot of very, very important 
information very rapidly, and I do not think any of us realize 
the extent to which the work requirements were not a problem to 
States because they were not being met.
    After all the President's proposal does start out with the 
same 50 percent that is current law. While he phases in higher 
work requirements, in looking just at that 50 percent, what are 
the three or four key things, changes in the law that we would 
need to make in order to really require States to meet that 50 
percent?
    One that comes to mind from your testimony is that we would 
have to say that you cannot move these folks into State 
programs unless those State programs also have work 
requirements. Moving people into State programs that do not 
have work requirements seems to be a significant dodgeball 
move. Is that true or not? Could you give us any sense of 
proportionality in terms of these different actions that end up 
undermining the work requirements so that we can get a better 
picture of what we would have to do to make sure that the work 
requirement currently in the law does hold?
    Ms. Fagnoni. Actually, what we have found is that while 
States use the flexibility given to them in part because of the 
caseload reduction credit, and they did use that flexibility 
to, in some cases, provide assistance to people through State 
funding, that in most cases, the individuals in these programs 
were still subject to State-imposed work requirements. I 
believe the figure is 90 percent.
    The difference, though, is that in the State programs, 
States often will define work activities somewhat more broadly 
than what is allowed for under the Federal participation rate 
rules. So States might include things such as having somebody 
attend substance abuse treatment, something like that, somebody 
who needs that kind of help they feel to help move them into 
the work force. Under the States' program, that might count as 
a work activity. So States have used the flexibility to impose 
their own types of work requirements on most of the people who 
are in the State programs.
    Mrs. Johnson. Are you saying that 90 percent of the State 
programs do have work requirements?
    Ms. Ryan. Ninety percent of the families served with 
separate State programs are subject to a State work 
requirement.
    Mrs. Johnson. And do we count the people in State programs 
that work toward the Federal work requirement?
    Ms. Fagnoni. Not in all cases, that is right, because 
again, the States may be defining this differently than the 
Federal definition.
    Mrs. Johnson. Well, ignoring for a moment the fact that the 
definition may be different, because under the new law that may 
not be such a problem, it would be useful to know that if we 
included the people in State work programs, then are the 
States--how close are the States coming to meeting the current 
50 percent requirement? The idea that they are meeting 5 
percent is very disturbing. On the other hand, if 90 percent of 
the States have people in programs that have work requirements, 
and then we can get into the definitional issue later, but we 
need to know that.
    Ms. Fagnoni. I do not think we have a specific number that 
it would raise the percentage to, but again, these percentages 
are what they are required to meet. It does not necessarily 
mean that they have only done that amount, even through the 
Federal rules.
    In fact, we did a report a couple of years ago where we 
looked at the fact that about 42 percent of TANF recipients on 
the rolls were engaged in some kind of Federal type of work 
activity, work activity as defined under the Federal laws. So 
just because they have a very low actual percentage, they need 
to meet does not mean that States, even under the Federal 
definition, have only met that amount.
    Mrs. Johnson. It would be very helpful in going forward if 
you could look at sort of that last report and this report and 
help us see, under Federal law, how many actually are working, 
meeting the work requirements, and then under those who have 
been moved into State programs----
    Ms. Fagnoni. If we added those in.
    Mrs. Johnson. Because otherwise, it sounds like they are 
just moving them out of sight, out of mind, and that they are 
not part of the same program, and most of the State programs 
are very similar, but because of some of the lack of 
flexibility in our program, they have dealt with them 
differently. I do not know whether you have any statistics that 
would indicate how many of the people in State work programs 
are spending what percentage of their time in drug treatment 
and so on.
    Ms. Fagnoni. No, we do not have that specific information.
    Mrs. Johnson. Thank you.
    Chairman Herger. I thank the gentlelady from Connecticut. 
Now the Ranking Member, Mr. Cardin, from Maryland.
    Mr. Cardin. Thank you, Mr. Chairman.
    Reading over your report, I see that you say that officials 
in almost all States we spoke to expressed the desire to have 
more flexibility in counting education and training toward the 
Federal work participation rate. Can you elaborate any further 
on that? What were the reasons for this? Is this just the fact 
that they want more flexibility in dealing with a Federal 
requirement or did they find that helpful in trying to find 
permanent placements for people who are leaving the welfare 
rolls?
    Ms. Fagnoni. I think one of the issues is there seems to be 
some confusion over what kinds of education might count. It is 
supposed to be education that leads to employment, so there is 
some confusion there, some restrictions on the amount of 
vocational education that can count. And I think what States 
tend to tell us is that they want the flexibility to be able to 
decide, and sometimes on a case-by-case basis, that somebody 
needs some somewhat different package of services that they 
think will move that person into the workforce. States would 
like to have that ability to do that.
    Mr. Cardin. That is totally consistent with what we have 
heard from the National Governors and what we have heard from 
our State legislators who have been here talking about the fact 
that one size does not fit all and that is the real advantage 
of the original TANF bill. But you are right. We have found 
that some States have interpreted Federal law on vocational 
education differently, and they have asked us for some help in 
giving them more flexibility in trying to meet their own 
individual needs.
    One of my concerns is that, if I understand the President's 
proposal, there is a significant additional restriction on 
vocational education in that for the average person on welfare, 
they have to be in an employed position for 24 hours a week 
before they can get into vocational education. Did you have any 
conversations with the States as to how they would feel about 
such a proposal?
    Ms. Fagnoni. At the time we were doing our work, specific 
proposals had not yet been introduced. Certainly, there were 
some general discussions about possible actions that might be 
taken, such as raising the Federal work participation rate, and 
basically what States told us with that was that some States at 
least said they think they could deal with a higher rate if 
they had some more potential flexibility in what might count 
toward that, as a work activity toward that new higher rate.
    Mr. Cardin. And I think that is consistent with what we are 
hearing, as you said, more flexibility. Some States are using 
more intensive vocational education for different types of 
people that could not fit into a 24-hour work week, is that not 
correct? Are they not using some----
    Ms. Ryan. States did not specify that with us. They had 
just mentioned more flexibility in the area of vocational 
education and training, substance abuse treatment and mental 
health treatment, but we did not get into specifics.
    Mr. Cardin. More flexibility with the amount of time, with 
the 1-year restriction? More flexibility with the percentage of 
their caseload that could be in vocational education? More 
flexibility as to what is considered vocational education, or 
all of the above?
    Ms. Fagnoni. I think it would probably be all of the above 
as it relates to the Federal requirement. You came back to the 
discussion with Mrs. Johnson. States with their own State 
funding are already using the flexibility that that provides to 
define work activities a little bit differently than the 
Federal definition.
    Mr. Cardin. That is very helpful. You also mentioned the 
fact that my State of Maryland is instituting wage supplements 
but feel that it is unfair that it counts toward the 5-year 
clock. So instead, what they are doing is using State funds 
only. Does that seem to be occurring more among the States, the 
use of State funds rather than using TANF funds in order to do 
things that are not permitted or that run counter to the 
intentions of the Federal TANF law?
    Ms. Fagnoni. There are certainly States that are using 
State funds under the provisions of TANF to not meet Federal 
requirements but often placing their own types of requirements, 
including time limits. Some States have chosen, including 
Maryland, Illinois is another example, have chosen to use the 
State funding to allow them to, if you will, stop the clock for 
those who are receiving TANF but working. So they are, again, 
using that flexibility provided through the State funding. Some 
States have made that choice, others have not.
    Mr. Cardin. It is interesting, because all the studies that 
we have seen show that wage supplements are positive. It helps. 
It helps people leave welfare and be able to have permanent 
employment and take care of their families, et cetera, and the 
wage supplements are good. As you point out, States have not 
had a problem yet with the 20 percent exemptions generally on 
the 5-year clock but they are concerned in the future that they 
are going to have a problem with the 20 percent meeting the 5-
year clock, and therefore they are reluctant to use the wage 
supplements toward the 5-year clock, and that is one of the 
reasons I think they are asking us to modify that rule.
    Thank you, Mr. Chairman.
    Chairman Herger. Thank you, Mr. Cardin. Would the gentleman 
from Louisiana, Mr. McCrery, wish to inquire?
    Mr. McCrery. Yes. Thank you, Mr. Chairman.
    My colleague from Maryland has spoken in his opening 
statement about his confidence in the States to do the right 
thing when given flexibility. I look forward to working with 
them on the unemployment compensation situation to give them 
the same flexibility.
    Mr. Cardin. Absolutely. We will put it together.
    Mr. McCrery. Ms. Fagnoni, again, tell us what percentage of 
the current TANF caseload is not subject to the work 
requirements.
    Ms. Fagnoni. Well, there are two ways we have presented 
this in the testimony. One has to do with the child-only cases, 
which, because there is no adult in the case, they are exempt 
from both the work requirements and time limits and that is 
about a third of the total caseload.
    The work requirements, what we have is that under the 
separate State programs, the fact that about 90 percent of 
families are still subject to some sort of State-imposed work 
requirement while they may not be subject to the Federal 
requirement. But again, the child-only cases are not subject to 
the work requirement at all.
    Mr. McCrery. Do you have a percentage of the current 
caseload that is not subject to the Federal work requirement?
    Ms. Fagnoni. No, we do not. We do not have that information 
other than for the child-only cases.
    Mr. McCrery. Is it not a fact that of the current 
caseloads, an extremely low percentage of those left because of 
the caseload reduction credit that the States get are not 
subject to the work requirement?
    Ms. Fagnoni. Well, as I pointed out a little bit earlier, 
what the caseload reduction does is specify the rate that the 
States would have to meet to be in compliance, so it is a 
minimum. It does not mean that that is all States are doing, 
and in fact, from a report we did a couple of years ago, about 
42 percent of TANF recipients are engaged in some kind of work 
activity who are receiving TANF. So while the effective rate, 
the minimum is very low, States--and, of course, it varies 
across States--States are having participants, even with the 
Federal funds, participate in work activities.
    Mr. McCrery. So what you are saying, I think, is that under 
the current Federal law, the States would not be required to 
have a large percentage of their caseload working, but, in 
fact, because of State work requirements, there is a higher 
percentage than is required by the Federal law.
    Ms. Fagnoni. Or their own choices about how they are 
dealing with TANF recipients to ensure that they are moving 
into the work force before they hit the 5-year time limit. Many 
of them are having them in work activities even under the 
Federal definition to prepare them for work. So the caseload 
reduction credit and how that affects their rate is not what is 
driving States as much as it is their own decisions about how 
to help people while they are on welfare.
    The other thing that States have told us, just as an aside, 
is they do not always--actually, when they are looking at their 
Federal participation rate, they often are not sure how the 
caseload reduction credit is going to be applied, so in some 
cases, they just have not even thought about that. They were 
too worried that they might miscalculate and be out of 
compliance, so they have gone ahead and tried to meet Federal 
work requirements that they thought might apply to them. So 
they have actually found that reduction credit somewhat 
confusing.
    Mr. McCrery. Mr. Chairman, we do not have with us today 
HHS, but they have a recent report that shows that a very high 
percentage of recipients are not doing anything to prepare for 
work while receiving their benefits. So I think we need to get 
some more testimony on this to clear it up and find out just 
where we are.
    How many States do not have any work requirement?
    Chairman Herger. Excuse me. Secretary Thomas will be before 
us next week, so we will be able to inquire.
    Mr. McCrery. Good. How many States have no work 
requirements for those in separate State programs?
    Ms. Ryan. I think we have found that the majority of States 
have implemented State work requirements in those separate 
State programs.
    Ms. Fagnoni. So that 10 percent are not.
    Ms. Ryan. Of the families.
    Ms. Fagnoni. Of the families would not be subject to a work 
requirement, again, of the families with an adult.
    Mr. McCrery. OK. Just one quick question, Mr. Chairman. As 
the States spend money on separate programs, and they do not 
use the Federal dollars for whatever reason, do those 
expenditures count against their maintenance of effort 
requirement?
    Ms. Fagnoni. Yes, they do. Yes.
    Mr. McCrery. Thank you.
    Chairman Herger. Thank you, Mr. McCrery. Now we will turn 
to the gentleman from Michigan, Mr. Levin, to inquire.
    Mr. Levin. Thank you very much. This has turned out, Mr. 
Chairman, I think to be a useful hearing. I hope that all the 
Members will read and listen to what you say. I sense there is 
a polarization growing in this place about the next step of 
welfare reform that I do not understand.
    Mr. Cardin pointed to a portion in your report where you 
talk about while State officials were generally supportive of 
TANF flexibility, officials in almost all the States we spoke 
with expressed the desire to have more flexibility in carrying 
education and training toward the Federal work participation 
rate. Those of us who supported, especially as we finally 
shaped it, welfare reform believe the States should have some 
flexibility, and the curious thing is now that some of those 
supporters seem to be saying the dictate should come from here 
and I do not really understand that.
    Also, I did not see it in the written testimony, if you 
would read back, if you would, Ms. Fagnoni, what you said about 
States not using caseload reductions. I just got the first part 
of that. I think I got the first four words right, but I am not 
sure.
    Ms. Fagnoni. What we said basically was that because of the 
caseload reduction credit, a number of States, their mandated 
participation rates were, in effect, much lower than one might 
think from just looking at the law, and for 31 States, the 
mandated participation rate was zero once one factored in the 
caseload reduction credit.
    Mr. Levin. And then you said something about the States 
were not using--what did you say about that?
    Ms. Fagnoni. Well, my point was----
    Mr. Levin. Do you remember? Is it in your written 
testimony?
    Ms. Fagnoni. Well, my point was that while this is the 
mandated participation rate, that does not mean that is what 
States have done in fact in terms of placing people in work 
activities, either with the Federal funds or with the State 
funds. What that specifies is what they are mandated to do to, 
at a minimum, to not have a financial penalty.
    Mr. Levin. But I think you then went on to say that the 
States were not using caseload----
    Ms. Fagnoni. Well, what I said was this is not something 
that is given to them in advance. It sort of depends on how the 
caseload declines and some States were worried that they might 
not be sure of what the mandated rate would turn out to be, so 
they tended to not place so much weight on what a caseload 
reduction credit might end up being because of that concern.
    Mr. Levin. I think the main point here is that States are 
using the flexibility by and large to get people to work and 
that even those who are on cash assistance, and substantial 
numbers are in some kind of a work or work-related activity. 
Mr. McCrery talked about an HHS report. Do you know, does the 
HHS collect data on the work participation as defined by 
Federal law or----
    Ms. Fagnoni. Yes.
    Mr. Levin. So when you cite or talk about the HHS report, 
those data are, as I understand it, in terms of the Federal 
definition and not what the States may be doing within their 
own programs. Is that an accurate statement of HHS data?
    Ms. Harris. Their data reporting changed dramatically. I 
think for fiscal year 2000, it is supposed to be the first year 
that they had some information on not just activities that 
count toward the Federal participation rate but a broader set 
of activities, and we have not seen that data yet and you might 
have that data. With the old data reporting system, it was more 
just geared toward those federally counted activities, and I 
think there is new data now on a broader set of activities.
    Mr. Levin. And those data, in terms of State programs, is 
that a comprehensive report from the States? Would that cover 
all of the work or work-related activities as defined by the 
States?
    Ms. Harris. I do not have the details of it.
    Mr. Levin. You are not sure.
    Ms. Harris. I believe that was the intent.
    Mr. Levin. The reason is I think that we need to discuss 
what are the major challenges before us today as we look at 
welfare reform. There has been no discussion here today about 
the average wage of people who move off of welfare into work, 
which according to unemployment data is $2,050 a quarter, about 
$8,000 a year. I think before we get polarized over the issue 
of work requirements, we had better ask ourselves whether an 
objective of welfare reform is to help people move out of 
welfare into work and in a way that they will in a foreseeable 
future be earning enough so that they can feed and educate 
their children and actually snip the dependence that they once 
relied on. Thank you.
    Chairman Herger. I thank the gentleman from Michigan. Now I 
recognize another gentleman from Michigan to inquire, Mr. Camp.
    Mr. Camp. Thank you, Mr. Chairman, and thank you for 
holding this hearing.
    Ms. Fagnoni, I have been listening carefully to your 
testimony, and I think it does get a little bit confusing 
between what the Federal requirements are and what States are 
actually doing. I am interested in kind of your assessment on 
what implication your testimony about exceptions to work 
requirements and time limits has for the President's proposal, 
which would require 24 hours a week of work as opposed to the 
current 30, and then 16 hours of any other activity, which many 
of us would view as strengthening the work requirement. Even 
though it means that we may be expecting more of parents 
receiving cash assistance, would a large portion of the 
caseload not be exposed to those increased requirements given 
the data as you have seen it?
    Ms. Fagnoni. In some cases, it is difficult to exactly know 
what all the interactions might be between what is going on now 
and what a specific proposal might do, but certainly one would 
have to set aside the child-only cases which are--I mean, we 
cite the one-third, but it is a number that has been growing. 
So that portion of the caseload, because there is no adult 
receiving assistance, would be exempt. So that is one piece of 
the story.
    Then there are some other pieces of the story related to, 
you know, some of the States' decisions to serve individuals, 
families with adults through their State funds, either because 
in some cases they were concerned. For example, two-parent 
families, they were concerned they might not be able to meet 
participation rates given what they thought were some of the 
problems that two-parent families faced, or where they felt 
that serving people with State funds might allow them to, 
again, expand the definition of work activities a little bit, 
or their choices in things like stopping the clock when people 
are working and receiving TANF.
    So based on what States were telling us, and again, not 
linked to any specific proposal, but based on what at least 
some of them were telling us, they felt that they could handle 
somewhat higher work participation rate requirements if they 
were given perhaps some more flexibility with how those 
activities might be defined, but we did not get into specifics 
and did not have specific proposals in front of us to talk 
through with them.
    Mr. Camp. And part of that also, the two-parent families, 
would likely be enrolled in separate State programs and----
    Ms. Fagnoni. That is what is being done quite a bit now, 
yes.
    Mr. Camp. In looking at this data, you mentioned that 11 
percent of the caseload is not subject to time limits, but only 
11 percent of that group is using the Federal hardship 
exemption. So am I understanding that about 1 percent of the 
caseload, total caseload, currently uses the Federal hardship 
exemption?
    Ms. Ryan. Of the adult caseload, that is correct.
    Mr. Camp. The adult caseload.
    Ms. Ryan. But, obviously, the time limits have not been in 
place, or some States, 5 years is just beginning to hit. So a 
lot of States have not even begun to use the Federal 20 percent 
extension.
    Mr. Camp. I see also that on page 22, Oregon and Arizona 
stand out as exempting a significant portion of their 
caseloads. How have these States been able to avoid imposing 
time limits almost of any kind?
    Ms. Ryan. Through waivers. Oregon has a waiver in place 
that exempts anyone if they are participating in a self-
sufficiency activity, so that is all underneath waivers that 
were implemented before the Personal Responsibility and Work 
Opportunity Reconciliation Act (PRWORA) was passed.
    Mr. Camp. I also want to bring attention to a Congressional 
Budget Office (CBO) view on child care funds. In 1996, they 
estimated that if States continued to spend, they would be 
underfunded by about $13.1 billion, and, of course, that did 
not happen. We ended up having a surplus in TANF, contrary to 
CBO's predictions. I think part of the difficulty in projecting 
this is not really understanding what the caseload dynamic is 
going to be in the future. Do you have any way of telling us or 
predicting that?
    Ms. Fagnoni. We do not have a way of predicting that. We 
can tell you that for the national data that are available 
through HHS, which lags somewhat, it is through September, I 
think it was about 28 States that were experiencing some 
relatively modest increase in their TANF caseloads. But the 
national caseload was still declining by a modest amount.
    We actually have work currently underway for Mr. Cardin 
where we are collecting more up-to-date information on 
caseloads from 25 States and that will take us through 
December, which may give us a better idea of whether caseloads 
might be creeping up a little bit. But again, even that does 
not necessarily tell us what the future will look like, given 
economic conditions.
    Mr. Camp. But there is nothing to say that the additional 
16 hours in any other activity, which might include training, 
might actually cause another dramatic drop in welfare 
caseloads. There is nothing to say that might not happen.
    Ms. Fagnoni. Yes. I think it would be really difficult to 
predict because of a lot of interactions that might occur 
related to the availability of jobs and things like that. For 
much of welfare reform, there are a lot of jobs in the private 
sector that were pretty readily available for people.
    Mr. Camp. I see my time has expired. Thank you, Mr. 
Chairman.
    Chairman Herger. Thank you, Mr. Camp. Now the gentleman 
from Pennsylvania, Mr. English, is recognized.
    Mr. English. I thank you, Mr. Chairman, and Ms. Fagnoni, it 
is great to have you before us again.
    Ms. Fagnoni. Thank you.
    Mr. English. Your testimony shows that 23 percent of child-
only cases involve ineligible non-citizen parents receiving 
benefits for their eligible citizen children. What about in 
separate State programs? Do we know what proportion of the 
families being served are non-citizens?
    Ms. Fagnoni. We do know that 13 States have chosen to 
provide assistance to immigrants who are ineligible for the 
Federal funding, to provide them with assistance, and in all 13 
States, they do apply work requirements to these individuals.
    Mr. English. Do we know how many parents in child-only 
cases or separate State programs are actually illegal aliens?
    Ms. Fagnoni. We have had a discussion about that. It is 
most likely that the child-only cases, the illegal alien is 
likely to show up there because that individual would not be 
eligible for assistance, either really probably through the 
Federal or State programs. I think what the States are doing is 
providing assistance to people who are here legally but who, 
because of the Federal requirements, are not eligible for TANF 
for some period of time.
    Mr. English. You also note in your testimony, on page 13, 
that States impose work requirements on non-citizens----
    Ms. Fagnoni. Right.
    Mr. English. And that has been reiterated here, and that 
would be through a separate State program using only State 
funds. What about in cases where Federal assistance is provided 
to citizen children of non-citizen or illegal alien parents? 
Can there be any work requirements on these families receiving 
Federal assistance?
    Ms. Fagnoni. If the individual is here legally, then I 
think that could be the group of people who are being served 
through the separate State programs. If somebody is here 
illegally, then they are not going to be eligible for 
assistance and, therefore, not having work requirements imposed 
on them. In fact, it is illegal for them to be here, and it is 
illegal for them to work here. It is an issue that has been 
problematic for policy makers for a number of years, where you 
have a mixed household where some of the people and often the 
children are actually citizens while their parents may be 
illegal aliens.
    Mr. English. Are there any recommendations out there for 
how we could close the loop and subject non-citizen families to 
work requirements or time limits?
    Ms. Fagnoni. Certainly, where the immigrant is here 
legally, States have taken that approach in some cases by not 
just providing them assistance but by imposing the work 
requirement.
    Mr. English. Which States?
    Ms. Fagnoni. There were 13 States.
    Ms. Ryan. I know California and Maryland are a couple of 
them. I can get you the other ones.
    Mr. Cardin. Would the gentleman yield for one moment?
    Mr. English. Certainly.
    Mr. Cardin. It seems to me that, and I am looking at Texas 
where a large percentage of the child-only caseload is where 
the parent is an ineligible non-citizen, if we gave the States 
the flexibility under TANF to cover legal immigrants and then 
they cover these cases, would there then not be a work 
requirement on the parent?
    Ms. Fagnoni. There would, although it is not likely unless 
there were a decision to also provide assistance to illegal 
aliens. What we do not know is what portion of that percentage 
represents illegal alien heads of households.
    Mr. English. Reclaiming my time, I guess this is reiterated 
in the last question, but have there been any proposals put 
forward that you are aware of that speak directly to this?
    Ms. Fagnoni. I think it has been more problematic with the 
illegal alien population because the root problem really is 
they are not supposed to be here in the first place, and so 
there have really not been any proposals that have gone 
anywhere that really address that issue. I think with people 
who are here legally, if they receive some kind of assistance, 
then I think there could be work requirements imposed.
    Mr. English. Thank you, Mr. Chairman. I yield back the 
balance----
    Mr. Cardin. Would the gentleman yield? I think you have 
another 30 seconds. Would you yield?
    Mr. English. Yes.
    Mr. Cardin. I want to clarify one point, if you would.
    Mr. English. Sure.
    Mr. Cardin. That is, if we gave the States the rights to 
cover legal immigrants as a discretion and they then covered 
these child-only cases where there is a legal immigrant as a 
parent, would not then the Federal work requirement apply if 
the States so choose to cover that family?
    Ms. Fagnoni. It would no longer be a child-only case. It 
would then be a case with an adult in it and then they would 
have to make the decision what kind of work requirements to 
impose, that is right.
    Mr. English. And in that case, we would be fundamentally 
changing our policy toward welfare for non-citizens?
    Ms. Fagnoni. That is right.
    Mr. English. Thank you, and I yield back the balance of my 
time.
    Chairman Herger. I thank the gentleman from Pennsylvania. 
Now the gentleman from Kentucky, Mr. Lewis, is recognized to 
inquire.
    Mr. Lewis. Thank you, Mr. Chairman.
    Ms. Fagnoni, on page 14 of your testimony, you illustrate 
that of the 11 percent of the caseload not subject to time 
limits, only 11.2 percent of that group has been categorized as 
a hardship exemption. Is it right that only 1 percent of the 
caseload is currently using this exemption?
    Ms. Fagnoni. That is correct, and that is, we think, 
primarily because while this TANF program has been in place at 
the Federal level for 5 years, the time limits are just 
beginning to come into play, and so in a lot of cases, States 
really do not have a very good handle on what proportion of 
their caseload might end up reaching this 5-year time limit and 
what they might need in terms of some kind of hardship 
extension.
    Mr. Lewis. That is all, Mr. Chairman. Thank you.
    Chairman Herger. Thank you. Ms. Fagnoni, how is the number 
in separate State programs expected to change over time, 
especially as more families reach Federal time limits? I 
understand that New York and California, comprising about one-
third of the national caseload, are among the States that 
provide State benefits after a family has received Federal 
benefits for 5 years, and in these and other States with such 
policies from the families' perspective, is there an effective 
5-year limit on their welfare checks?
    Ms. Fagnoni. You are correct that some States at this point 
have said they have made the decision to extend benefits to 
individuals who remain on welfare even after the 5 years. Some 
States have told us, though, including California, that they 
might need to reconsider how much they are able to support 
based on State budgetary considerations and concerns. So there 
are States that do intend or are starting to extend benefits 
through their State programs, even after people reach the 5-
year time limit, that is correct.
    Chairman Herger. I want to thank our witnesses. Thank you 
very much, Ms. Fagnoni, for your good testimony.
    Ms. Fagnoni. Thank you, Mr. Herger.
    Chairman Herger. I would like to call up our second panel. 
This morning, we will be hearing from Marge Thomas, Chief 
Executive Officer, Goodwill Industries of the Chesapeake, 
Baltimore, Maryland, accompanied by Fatima Wilkerson, 
Baltimore, Maryland; the Honorable Jennifer Reinert, Secretary, 
Wisconsin Department of Workforce Development, Madison, 
Wisconsin; Dannetta Graves, Director, Montgomery County 
Department of Job and Family Services, Dayton, Ohio; Mark 
Greenberg, Senior Staff Attorney, Center for Law and Social 
Policy; Michael Fishman, Lewin Group, Falls Church, Virginia; 
Douglas Besharov, Professor, University of Maryland School of 
Public Affairs, College Park, Maryland, and Resident Scholar, 
Public Policy Research, American Enterprise Institute.
    We will begin this panel with testimony from Marge Thomas, 
Chief Executive Officer of Goodwill Industries of the 
Chesapeake, Baltimore, Maryland, who is accompanied by Fatima 
Wilkerson of Baltimore, Maryland. A key focus of their 
testimony will be serving TANF recipients with barriers to 
employment.
    At this time, I would like to insert into the record a 
recent study by the Urban Institute that shows that despite 
what seems to be commonly accepted belief that the welfare 
caseloads have gotten harder and harder to serve as the easiest 
cases have left for work, the caseload is generally the same as 
it was a few years ago. On page 30 of the report, the author 
notes that, ``Contrary to conventional wisdom, our results did 
not indicate that adults on TANF in 1999 were significantly 
more disadvantaged than those on welfare in 1997.''
    [The material follows:]

    The majority of adults on TANF reported significant barriers to 
employment. However, contrary to conventional wisdom, our results did 
not indicate that adults on TANF in 1999 were significantly more 
disadvantaged than those on welfare in 1997. While the data suggested 
somewhat poorer health status for the 1999 cohort of TANF recipients 
compared with the 1997 cohort, the differences were not statistically 
significant. Education levels and caregiving responsibilities also did 
not differ significantly. Of course, our results reflect a time period 
when TANF was just getting underway (1997) and one after TANF policy 
had evolved further (1999). While caseloads were dropping rapidly 
during our two periods of observation, it may be that adults on TANF in 
1997 and 1999 were more disadvantaged than those on welfare prior to 
1997.
    The clearest difference between the two cohorts of TANF recipients 
was increased work activity, especially paid work, among 1999 TANF 
recipients. While still at a relatively low level, paid work among 
those with multiple barriers to employment increased fourfold (from 5 
percent in 1997 to 20 percent in 1999). These results clearly indicate 
the influence of a very strong economy coupled with states' strong 
``work first'' programs that try to move recipients into paid jobs as 
quickly as possible.
    Welfare cycling continued to characterize the TANF population. Some 
left but came back on, and new entrants comprised the same percentage 
of TANF adults in 1999 as in 1997. Our results highlight the continuing 
needs of a group of disadvantaged single mothers with low education 
levels and high levels of mental and physical health problems. The fact 
that one-third of new entrants were caring for an infant (compared with 
1 in 5 cyclers and about 1 in 16 stayers)
    [The study is being retained in the Committee files.]

                                

    Chairman Herger. With that, I turn to Ms. Thomas for your 
testimony. Ms. Thomas.

 STATEMENT OF MARGE THOMAS, CHIEF EXECUTIVE OFFICER, GOODWILL 
 INDUSTRIES OF THE CHESAPEAKE, BALTIMORE, MARYLAND, AND CHAIR, 
     PUBLIC POLICY COMMITTEE, BOARD OF DIRECTORS, GOODWILL 
                 INDUSTRIES INTERNATIONAL, INC.

    Ms. Thomas. Thank you. Good morning, Chairman Herger, other 
Members of the Human Resources Subcommittee. I am Marge Thomas. 
I am the President of Goodwill Industries of the Chesapeake, 
which is located in Baltimore, Maryland. I am also representing 
today Goodwill Industries International. I chair the Public 
Policy Committee for the Board of Directors for Goodwill 
Industries, International, so I am also wearing that hat today.
    Goodwill Industries International currently consists of 177 
Goodwills who are operating throughout the United States. We 
are celebrating 100-year anniversary this year as a movement. 
Since 1902, we have had the experience of working with people 
who have multiple barriers to employment. I come to you 
speaking on behalf of all 177 Members.
    In the year 2000, Goodwill Industries served 150,000 TANF 
recipients. We have served over 450,000 since 1996. Getting a 
little bit closer to home and talking specifically about our 
own Goodwill, Goodwill Industries of the Chesapeake operates in 
the Baltimore metropolitan area and the entire Eastern Shore. 
We have experience working with people with a variety of 
barriers, from folks who are crab pickers in the summertime and 
do not have jobs in the winter to individuals who are living in 
the inner city of Baltimore.
    We operate 17 stores and 21 donation centers, which provide 
a great deal of employment to individuals, some of whom could 
not work if it were not for Goodwill Industries. We also 
operate nine custodial and mailroom contracts, primarily with 
the Federal and State governments. Those programs are used 
specifically for people with multiple or severe disabilities. 
In those programs, we also have been able to employ some 
individuals coming off of TANF who are not disabled in the 
support positions.
    In addition to all of that, we operate 15 career centers 
located throughout our territory. This past year, we served 
over 4,000 people in a variety of different training programs. 
We placed 1,140 into competitive employment outside of 
Goodwill.
    We operate a temporary employment agency. I was interested 
in reading in some of the studies that have been referred to 
during the proceedings today that a number of people who have 
been on TANF are actually accessing jobs through temporary 
employment. That is precisely why we started a temporary 
agency. Many of our recipients were not able to go directly 
into regular full-time employment because they lacked any work 
experience. By starting our temporary agency, we were able to 
put them out into temporary jobs. Many of the employers would 
then hire them into permanent positions as a result of their 
temporary work. This past year, we placed 399 people into 
temporary jobs, and of that, 75 were hired into full-time 
employment.
    We target a variety of populations. We have a significant 
problem with high school dropouts in the City of Baltimore, so 
we certainly are serving that population. We work, obviously, 
with people who are preparing to leave welfare or who have left 
welfare. We also are operating programs with ex-offenders who 
have been released or are still incarcerated. That population 
also comprises a large number of people in the City of 
Baltimore.
    We are finding more frequently that TANF recipients coming 
to us have been incarcerated or had experience with the 
judicial system. This creates yet another barrier to their 
employment. Additionally, we are working with a lot of people 
who have been involved in substance abuse. That is probably one 
of the largest number of individuals we serve as we move 
further and further along in the reduction of welfare.
    What it takes a person to leave and stay off of welfare 
obviously gets significantly complicated as we add on all these 
different barriers. In our 100-year history, we have worked 
with people with disabilities. Again, that adds still another 
barrier if these individuals coming off of welfare have 
disabilities or have children with disabilities.
    We operate a variety of programs. I want to highlight just 
a couple of things that we have found are absolutely critical 
in not just getting people off of welfare and but them off. 
Primarily this has to do with services after they are in jobs. 
Folks who are entering the job market are almost always 
entering at low wages. In order to help them to move up in the 
job market, we must do follow-up work. I would strongly 
encourage funding for post-employment support be part of 
whatever is considered for TANF reauthorization.
    Finally, putting on my hat for Goodwill Industries 
International, we have been holding a series of forums across 
the country called Consensus to Build the 21st Century. We will 
soon have results available from all of these communities. 
Issues raised include the difficulty of working with multiple 
funding streams and the variety of requirements resulting from 
legislation to serve people in need. More coordination is 
critical. We will be happy to share more information from our 
consensus meetings as it becomes available.
    I would like now to introduce somebody who I think you all 
need to hear far more than you need to meet any of the rest of 
us. That is Fatima Wilkerson and Fatima will tell you her story 
and how she successfully did use the TANF legislation to gain 
employment and a new life.
    [The prepared statement of Ms. Thomas follows:]
Statement of Marge Thomas, Chief Executive Officer, Goodwill Industries 
   of the Chesapeake, Baltimore, Maryland, and Chair, Public Policy 
           Committee, Goodwill Industries International, Inc.
    Good Morning Chairman Herger and members of the Human Resources 
Subcommittee, I am Marge Thomas, CEO of Goodwill Industries of the 
Chesapeake, located in Baltimore, Maryland. In addition, I currently 
serve as the chairwoman of Goodwill Industries International's Public 
Policy committee. I would like to thank you for inviting me and 
Goodwill at large here today to speak on the issue of helping TANF 
recipients with multiple barriers enter and stay in the job market.
    I am here representing my particular Goodwill, as well as all of 
the Goodwills in the United States, a group comprised of 177 local 
entities that are autonomous, community-based, non-profit corporations 
that provide career services and job training for people with barriers 
to employment.
    Over its 100 year history, Goodwill has maintained a strong 
commitment to serving people with barriers to employment, providing the 
assistance and training necessary to enable these individuals to be 
engaged and effective members of our nation's labor force. Since our 
beginning in serving immigrant populations in Boston in 1902, through 
decades of work with persons with disabilities, to our current 
expansion of services to a broad range of individuals, Goodwill 
continues to back up its belief in the power of work for all people 
with quality service provision.
    For the context of today's testimony, it is significant to note 
that since 1996, Goodwill collectively has served through pre--and post 
employment services, job training, soft skills training, and job search 
assistance over 450,000 TANF individuals and in 2000 alone, served over 
150,000 TANF recipients.
    Today, I am here to speak to you about the work Goodwill Industries 
of the Chesapeake is doing to move welfare recipients into stable 
employment.
    Goodwill Industries of the Chesapeake serves the Baltimore 
Metropolitan area and the Eastern Shore of Maryland. Our retail network 
comprising 17 stores and 21 donation centers help to generate revenue 
for our employment services. We also have 9 custodial and mailroom 
contracts with federal agencies and the State of Maryland. These 
contracts allow us to employ 194 persons, 145 of whom are persons with 
severe disabilities. We are especially proud of our long-standing, 15 
year + contract with the Social Security Administration.
    Additionally, we operate 15 career centers where we prepare people 
for employment. In 2001, these career centers and our family support 
center provided services to 4,110 people. The staff at the Goodwill of 
the Chesapeake helped 1,140 people to obtain employment with employee 
benefits and career advancement opportunities. We operate a temporary 
employment agency, Goodwill Staffing Services that in 2001 helped 399 
people to gain valuable paid work experience. Of the 399 individuals, 
75 were hired permanently following their temporary employment.
    All of the people we serve have one or more barriers to employment 
and we help them find and stay in good jobs. By design, we have 
targeted employment readiness programs for high school dropouts, for 
persons who need to leave welfare for employment, and for ex-offenders 
leaving prison and returning to Baltimore. I also want to stress how 
important it is to consider the special efforts that must be made to 
assist TANF recipients who are involved with the criminal justice 
system. We currently serve people who are in recovery from substance 
abuse, who are homeless, and those with severe disabilities.
    I would like to give the subcommittee a brief idea of what it takes 
to help a person to leave and stay off welfare. To do this work, we 
take our clients through a number of steps that include:
    1. Intake and assessment work that consists of determining a 
person's literacy and math abilities, interests and aptitudes, and need 
for services such as childcare and transportation.
    2. Three or more weeks of job-readiness training to fully prepare 
job-seekers for employment focusing on the ``soft skills'' of how to 
accept supervision, what it means to give value to your employer, 
arriving at work on time and getting along with co-workers. For some of 
the people we serve, three months of occupational skills training is 
necessary to close a ``skills gap,'' especially the basic computer 
skills many employers expect their employees to have.
    3. A period of subsidized employment, usually three months, is 
often required for welfare recipients who have had little or no paid 
work experience. Often employers will hire these individuals 
permanently following a period of subsidized employment.
    4. Transition into unsubsidized employment and follow-up support 
services is the most critical step in the work we do. Goodwill job 
placement staff also work closely with the more than 400 employers we 
place clients with and frequently makes visits to the workplace to get 
progress reports.
    5. On-going case management support is also an essential service we 
provide to persons who have left welfare for work. Goodwill staff helps 
when benefits are mistakenly cut off. They provide support and guidance 
in the evenings and weekends to help clients cope with the multiple 
changes that they are experiencing as full-time employees.
    These are a few of the many activities we undertake to help place 
and keep people in jobs.
    I am accompanied by Ms. Fatima Wilkerson, who graciously agreed to 
take time off from work to join me today. She has benefited from the 
services I have described to you. Ms. Wilkerson will share with you her 
experiences of being served by Goodwill and her successful efforts to 
get and keep employment with job advancement potential.
    We are particularly pleased that Goodwill has been very involved 
with welfare reform and will continue to be in the future. Over the 
last six months, Goodwill has been engaged in a yearlong public policy 
initiative, Consensus to Build the 21st Century Workforce. This 
initiative is an effort to understand the needs of our members and the 
communities they serve in developing and advancing the workforce needed 
in this new millennium.
    Our goal is to help communities create effective programs and 
systems that help individuals with barriers to work gain access to 
skills, jobs and successful careers. We convened 13 grassroots meetings 
in medium and large cities as well as rural communities across the 
country. One of those meetings, I'm happy to share with you, was held 
in Baltimore.
    At these meetings, Goodwill brought together leaders from business 
and government, service providers and other stakeholder communities to 
elicit information on the effectiveness and efficiency of the myriad of 
federal, state and local workforce development programs targeted to 
individuals with low wages, low skills and/or other barriers to 
successful entry into the workforce. Building on the results of these 
meetings, Goodwill is working with Congress, the Administration and the 
full Goodwill community to ensure better coordination and even more 
successful workforce programs now and in the future.
    As part of the Consensus initiative, we are hosting an 
international forum this April in Austin, Texas, focusing on inclusion 
of the hardest to serve in the 21st century global 
workforce. This meeting will bring together CEOs, directors and 
managers from local Goodwills, non-profit organizations and foreign 
leaders. We will focus on lessons learned from serving those with 
multiple barriers, particularly in the U.S., United Kingdom, Hungary, 
the Netherlands, Ireland, Canada, Latin America and Mexico. We are 
particularly excited about what we can both learn from our 
international neighbors as well as share to help those with barriers 
find and keep a job.
    Before I close, I would like to say that Goodwill is very pleased 
to be asked to comment on TANF and to be part of the ongoing discussion 
concerning reauthorization. As we have learned through our Consensus 
initiative, flexibility is key to eliminating the confusion among 
workforce programs and rules governing those programs. We have also 
learned that:
           There are too many issues and too little 
        collaboration among programs and organizations with the same 
        mission;
           The existing infrastructure is debilitating, not 
        facilitating;
           There is a call for leveraging our commitment to 
        workforce development now because time is of the essence; and
           There is a strong desire for a more coordinated 
        system.
    Therefore, we are particularly happy with the President's proposed 
``super waiver'' which is a good first step in providing a more 
cohesive solution in communities to help people with multiple barriers 
to acquire and maintain employment. We at Goodwill are very happy to 
make ourselves available for further technical assistance in the effort 
to help as many welfare recipients find and maintain careers and excel 
in the workplace as possible.
    Chairman and members of the Subcommittee, I am now happy to address 
any questions that you may have concerning my testimony.

                                

       STATEMENT OF FATIMA WILKERSON, BALTIMORE, MARYLAND

    Ms. Wilkerson. Good morning. Good morning, Chairman and 
Members of the Subcommittee. My name is Fatima Wilkerson, and I 
currently receive support services through Goodwill Industries 
through the Work Matters program.
    When I was 16, I became pregnant with my first child, and I 
was faced with a multitude of barriers before he was even born. 
I was a high school dropout. I had no work experience or job 
skills training and my son's father was shot in the head and 
partially paralyzed and so I had to single-handedly support my 
son.
    When I was 17, I became employed working the night shift as 
a housekeeper, from 11:00 at night to 7:30 in the morning. Even 
though I had became employed, I was faced with new barriers in 
finding child care and finding transportation. I also had the 
burden of taking care of my two younger brothers, 12 and 6, 
because both my mother and father were incarcerated. It became 
too much for me, and I ended up eventually quitting my job.
    I began to receive benefits from the Department of Social 
Services (DSS) when I was 18. I was put into a GED, General 
Education Development, training course, where I eventually 
received my high school diploma. Receiving my high school 
diploma was a very strong point in my life. It made me realize 
that I could achieve goals, but I had no idea, no direction of 
what those goals were, and how I would attribute them to me.
    Being referred to Goodwill due to the Office of Employment 
and Development was a changing point in my life. I was given 
the support and assistance I needed to overcome my barriers. I 
received assistance in transportation and with finding day 
care, and I received assistance in maintaining a stable 
household after constant problems with my landlord. I was given 
work experience and skills training through subsidized 
employment from Goodwill, and I was awarded the Better 
Opportunities Through Online Education scholarship from 
Goodwill, which allowed me to attend the University of Maryland 
University College.
    Goodwill is responsible for finding my current employer, 
the MCS Group, and I was referred by Goodwill to the East 
Harbor Village, which helped me open an individual development 
account which will put me on the path to home ownership.
    Goodwill helped me to assess where I was in life and 
connect it to where I eventually want to be. Goodwill never 
sheltered me from my problems. Instead, Goodwill and its staff 
provided me with the support and assistance I needed to face 
those problems without being sidetracked from my aspirations of 
independence.
    Moving from welfare to work was a very hard transition. I 
was faced with problems during my subsidized employment from 
DSS, being cut totally off of my cash benefits and still having 
to face paying rent and maintaining my child and paying gas and 
electric and just buying food and maintaining a household. My 
transition from welfare to work is still in progress. However, 
I am more than convinced that the services that I received at 
Goodwill thus far have brought me to the level of independence 
that I have achieved today, and if the Subcommittee would 
contribute a little bit more time and effort and money, then I 
know that I will be able to move forward and become even more 
independent from the system and be more of a success.
    Thank you for your time.
    [The prepared statement of Ms. Wilkerson follows:]
           Statement of Fatima Wilkerson, Baltimore, Maryland
    Good Morning Chairman and Human Resources subcommittee.
    My name is Fatima Wilkerson and I currently receive support 
services through the Goodwill industries work matters program.
    When I was 16 I became pregnant with my first child. Before my son 
was even born I was faced with a multitude of barriers that would 
prevent me from being able to support my child on my own. I was a high 
school drop out, I had no job skills or training and my son's father 
had been shot in the head and partially paralyzed leaving me to single-
handedly support my child.
    I turned 17 and was able to find work as a housekeeper from 11 
o'clock at night to 7:30 in the morning. As I tried to make advances 
without the help of Social Services, new problems like daycare and 
transportation began to arise. I also had the burden of caring for my 
12 and 6 year old little brothers due to the incarceration of both my 
mother and father. These crippling circumstances soon became too 
overwhelming for me and I eventually quit my job.
    I began to receive benefits from social services at 18. After a few 
months of receiving benefits, I was enrolled into a GED training course 
and eventually received my high school diploma. Receiving my diploma 
helped me to realize that I could achieve goals with effort, 
perseverance and patience. However, I had no idea what those goals 
were. I had received my High School diploma, but had no idea what to do 
with that diploma.
    Being referred to Goodwill through the Office of Employment and 
Development was a changing point in my life. I was given the support 
and assistance I needed to overcome my barriers. I received assistance 
in transportation and with finding daycare. I received assistance in 
maintaining stable housing after constant problems with my landlord.
    I was given work experience and skills training through subsidized 
employment from Goodwill, and I was awarded the Better Opportunities 
Through Online Education scholarship from Goodwill, which allows me to 
attend the University of Maryland University College.
    Goodwill is responsible for finding my current employer, The MCS 
Group, Inc., and I referred by Goodwill to I.D.A., a program which 
gives assistance that will put me on the path of home ownership.
    Goodwill helped me to assess where I was in life and connect that 
to where I eventually want to be. Goodwill never sheltered me from my 
problems instead, Goodwill and its staff provided me with the support 
and assistance I needed to face those problems without being side-
tracked from my aspirations of independence.
    My transition from welfare to work is still in process. However, I 
am more than convinced that the services that I received at Goodwill 
thus far have brought me to the level of independence that I have 
achieved today.
    Thank You For Your Time.

                                

    Chairman Herger. Thank you, Ms. Wilkerson. You did an 
outstanding job. I know everybody joins me and all the Members 
here in congratulating you and commending you on a job very 
well done----
    Ms. Wilkerson. Thank you.
    Chairman Herger. And for being the role model that you have 
become, as well. So thank you very much.
    [Applause.]
    Chairman Herger. With that, we do have a vote on the floor, 
and we will recess and return immediately following the vote.
    [Recess.]
    Chairman Herger. The hearing will reconvene. Ms. Reinert, I 
apologize for the interruption, but with that, we will open it 
up to your testimony. Thank you for being with us.

 STATEMENT OF THE HON. JENNIFER REINERT, SECRETARY, WISCONSIN 
    DEPARTMENT OF WORKFORCE DEVELOPMENT, MADISON, WISCONSIN

    Ms. Reinert. Thank you. Chairman Herger, Ranking Member 
Cardin, and Members of the Subcommittee, thank you for inviting 
me here today to give Wisconsin's perspective on how TANF 
reauthorization can move the nation forward in our welfare 
reform efforts.
    I would venture to say that everyone in this room and the 
State legislators and Governors of all 50 States share the same 
set of goals, a reduced need for government assistance, full 
employment, and healthy, self-sufficient families. The 1996 
Personal Responsibility and Work Opportunities Reconciliation 
Act gave us the tools to work toward those shared goals, and we 
have seen remarkable success as a result.
    The lessons learned in the past 5\1/2\ years of 
administering the TANF programs have added tremendously to our 
base of knowledge. Some of our strategies for achieving desired 
outcomes have changed as a result. But the basic program 
elements are still there.
    The success of Wisconsin's TANF program, called Wisconsin 
Works, or W-2, stems from its work focus philosophy, its wide 
range of work training opportunities and work support, and its 
flexibility, all targeted at empowering parents to achieve 
personal responsibility for the welfare of their families.
    President Bush's reauthorization proposal retains the 
welfare-to-work philosophy so fundamental to our reform efforts 
and leaves the funding levels and distribution formula 
unchanged. These are critical to helping States move to the 
next level of welfare reform. His proposal also introduces new 
program elements that will serve to enhance States' efforts. 
For example, a program integration waiver brings new 
opportunities for States to break down the silos separating our 
work programs for the betterment of our service delivery system 
as a whole, and the philosophy of full engagement is one of the 
cornerstones of the W-2 program, which has been in place since 
implementation.
    Raising the bar on work participation will make a 
significant difference. States must, however, retain the 
ability to decide what activities are most appropriate on a 
case-by-case basis.
    Given the time constraints, I am going to highlight five 
key elements of W-2 that we believe have contributed to the 
program's success. First, community partnerships. Wisconsin's 
geographic diversity, ranging from small rural communities to 
urban industrialized cities, calls for unique approaches that 
match the need of participants with the local employment 
conditions. To accomplish this, partnerships have developed 
amongst W-2 providers, community-based organizations, and 
employers, enabling communities to develop innovative solutions 
and communicate on a much broader scale.
    Many of our W-2 participants have multiple problems in 
their lives and require a network of supporting guidance from 
outside sources, and this need for support carries over into 
the workplace. In response, employers are providing mentoring 
relationships, specialized training, release time for education 
that helps parents to balance the needs of their family and 
work. Business brings invaluable resources to the program. 
Their participation is critical to program success and 
sustaining a healthy community.
    The second element is outcome-driven performance standards 
for local W-2 providers. A set of 15 performance standards deal 
with such measures as successful attachment to the work force, 
educational activities attainment, and increased earnings. Our 
performance standards impact on W-2 agencies' contract dollars 
and future eligibility to be granted a W-2 contract. The 
competitive process to select the best and most enthusiastic 
providers and then to hold them accountable is essential to W-2 
and performance standards are what drives this process.
    The third element is retention and advancement. The initial 
focus of W-2 was helping people get jobs. The focus is also now 
on helping participants keep their jobs and advance in their 
jobs. Training, education, skill development, all enhance 
employment stability and advance to higher-wage jobs.
    The fourth element is integration of work force programs. 
In the past, the focus was on referring to W-2 participants as 
former Aid to Families with Dependent Children (AFDC) 
recipients. That is being reframed. We are looking now at 
Wisconsin workers versus former welfare recipients. We have 
merged two major divisions within the Department of Work force 
Development, enabling us to look at all of our work force 
programs as a spectrum of services with a goal of promoting 
upward mobility and lifelong learning for all of Wisconsin's 
work force.
    The fifth, the last and the most important, is full 
engagement. We engage everyone in work-related activities from 
day one with no exceptions. Time limits, work participation, 
and work requirements are important components to keep both 
participants and case managers fully engaged.
    In conclusion, TANF reauthorization is an opportunity for 
Congress to further strengthen families through work. PRWORA's 
success thus far is based on flexibility provided by Congress, 
not in spite of it, and State and local innovations are driving 
factors. It is difficult for researchers to study and quantify 
our success because of the multiplicity of strategies across 
States has created a program that looks a lot like a patchwork 
quilt, but we owe it to our children and families to stay on 
this path where meeting individual needs are at the very center 
of every individual decision. Thank you.
    [The prepared statement of Ms. Reinert follows:]
Statement of the Hon. Jennifer Reinert, Secretary, Wisconsin Department 
              of Workforce Development, Madison, Wisconsin
Introduction

    Chairman Herger, Ranking Member Cardin and members of the 
Subcommittee, thank you for inviting me here today to give Wisconsin's 
perspective on how TANF reauthorization can move the nation forward in 
our welfare reform efforts.
    I venture to say that everyone of us in this room, and the 
legislatures and Governors of all 50 states share the same set of 
goals--a reduced need for government assistance, full employment and 
healthy, self-sufficient families.
    The 1996 Personal Responsibility and Work Opportunities 
Reconciliation Act gave us the tools to work toward those shared goals 
and we've seen remarkable success as a result. The lessons learned in 
the past 5\1/2\ years of administering the TANF program have added 
measurably to our base of knowledge. Some of our strategies for 
achieving desired outcomes have changed as a result. But the basic 
program elements are still there. The success of Wisconsin's TANF 
program, called Wisconsin Works or W-2, stems from its work-focused 
philosophy, its wide range of work-training opportunities and work 
support, and its flexibility--all targeted at empowering parents to 
achieve personal responsibility for the welfare of their families.
    President Bush's reauthorization proposal retains the welfare-to 
work philosophy so fundamental to our reform efforts and leaves the 
funding levels and distribution formula unchanged. These are critical 
to helping states move to the next juncture of welfare reform. His 
proposal also introduces new program elements that will serve to 
enhance states' efforts. For example, the Program Integration Waiver 
brings new opportunities for states to break down the silos separating 
our work programs for the betterment of our service delivery system as 
a whole. And the philosophy of full-engagement is one of the 
cornerstones of the W-2 program which has been in place since 
implementation. Raising the bar on work participation will make a 
significant difference as long as states can retain the ability to 
decide what activities are most appropriate on a case-by-case basis.
W-2 Overview

    The W-2 program is open to all of Wisconsin's low-income families 
including non-custodial parents with income under 115 percent of the 
Federal Poverty Level. Once eligible, other sources of income such as 
receipt of child support, do not lower the individual's grant. The 
eligibility and job service provider functions are combined to allow 
the participants to develop a close relationship with one primary case 
manager. All adult W-2 participants are required to work to the very 
best of their ability. Like work, W-2 payments are based on 
participation, not on the number of children in the family. Each hour 
the individual fails to participate without good cause, the payment is 
reduced by the minimum wage of $5.15.
    W-2 is a multi-level program we call our ladder of employment. 
There are four rungs on this ladder including:
    Unsubsidized Employment: Applicants who are ready for an 
unsubsidized job do not receive a cash grant, but do receive supportive 
services and case management to help them find or maintain employment.
    Trial Jobs: Employer receives a subsidy to provide on-the-job 
training to the participant. The participant receives regular 
employment wages and may be hired permanently by the employer upon 
successful completion of the trial job.
    Community Service Job: Participants receive $673 per month in 
exchange for work training and educational activities.
    W-2 Transitions: Participants with more severe barriers to work 
receive $628 per month in exchange for participation in appropriate 
activities that move the participant towards employment.
    What has Wisconsin accomplished with the flexibility granted to us 
under TANF?
    We are able to tailor employment services to the needs of the 
individual. States' continued flexibility here is most critical because 
no two families have the same set of service needs. W-2's unique 
approach combines education with a progression of subsidized work 
training placements, allowing participants to get the type of training 
they are most in need of. Everyone is required to participate to the 
extent his or her abilities allow. Parents who are found to have more 
severe barriers such as substance abuse, physical or mental health 
issues or domestic violence, are offered a legitimate opportunity to 
address their needs through counseling, treatment, or vocational 
rehabilitation.
    Let's take a case example from Wisconsin: This is a 35-year old 
woman living in an urban area of Wisconsin. She struggles with both 
physical and psychological issues including a back problem that is 
aggravated by obesity, post traumatic stress syndrome, depression and 
panic attacks. She continues on medication for depression, pain, blood 
pressure, and muscle relaxants. While the W-2 agency is assisting her 
in an appeal for SSI benefits, they also continue to work with her on 
activities that may help her someday become self-sufficient. Activities 
include:

           basic education studies--12 hours per week with a 
        goal of completing her General Equivalency Diploma;
           Physical therapy, Dr's and dietitian appointments--
        24 hours per week;
           Mental Health Counseling--2 hours per week;
           Support groups for pain management and grief--1 hour 
        per week;

The next steps for the agency and this participant are a vocational 
evaluation and assessment and exploration of career goals when physical 
and mental health symptoms are under control. You see can see by this 
example, how critical it is for agencies to have discretion in 
determining what activities are most appropriate.
    Once participants are employed, cash benefits end, but employment 
supports continue. Child care subsidies, family health care coverage, 
transportation assistance, Job Access Loans and case management provide 
working participants with a network of support services that help them 
stabilize and prosper in their new work environment. Through case 
management, case workers help newly hired participants think through 
their work related needs and develop a plan for such things as back-up 
child care arrangements, money management and reliable transportation.
    We are engaging the whole community. Wisconsin's geographic 
diversity--ranging from small rural communities to urban, 
industrialized cities--calls for unique approaches that match the needs 
of participants with the local employment conditions. To accomplish 
this, partnerships have developed amongst W-2 providers, community 
based organizations, and employers, enabling communities to develop 
innovative solutions and communicate on a much broader level about 
problems that impact on their participants.
    Many of our W-2 participants have multiple problems in their lives 
that require a network of support and guidance from outside sources. 
And this need for support carries over into the work place. In 
response, employers are providing mentoring relationships, specialized 
training, and job retention services that help these parents learn to 
balance the needs of their family and work. Business brings invaluable 
resources to the program in the form of employment opportunity, 
leadership, vision and financial support. Their participation is 
critical to sustaining a healthy community.
    We have revolutionized how we do business with our local W-2 
providers through out-come driven performance standards. A set of 15 
performance standards deals with such measures as successful attachment 
to the workforce, educational activities attainment and increased 
earnings. Our Performance Standards impact on W-2 agencies' contract 
dollars and future eligibility to be granted a W-2 contract.
    The competitive process to select the best and most enthusiastic 
providers is essential to W-2 and Performance Standards are what drives 
this process. How did we come to rely so heavily on this strategy? We 
took a step back and analyzed what administrative requirements were 
making the greatest impact on our program. In the end, we came to 
realize that if we tell agencies what outcomes we expect for our 
participants, they will find the means to make it happen. The 
flexibility and empowerment strategies combined with these performance 
standards and accountability are what made welfare reform such a 
success in Wisconsin.
    We've invested in initiatives that not only support parent's entry 
into the workforce, but also more broadly help them work toward their 
career and life aspirations:

        Workforce Attachment and Advancement: offers services designed 
        to promote upward mobility for low-income working families and 
        non-custodial parents. WAA provides job retention and training 
        services, which are essential to improving employment stability 
        and advancement to higher wage levels.
        Literacy Initiative: established workplace and family literacy 
        programs for low-income families to provide job-specific 
        literacy and vocabulary skills to adults in the workplace; and 
        provide child and family tutoring to improve the literacy 
        skills of individual family members.

    We have merged two major Divisions within the Department of 
Workforce Development enabling us to look at all of our workforce 
programs as a spectrum of services with the goal of promoting upward 
mobility and lifelong learning for all of Wisconsin's workforce. While 
W-2 is the stepping stone into the workforce for parents with barriers 
to employment, the program by itself may not raise someone out of 
poverty. But the service delivery system in which W-2 participants are 
served extends work supports and training opportunities to individuals 
at income levels well above the poverty level.
Time Limits

    Wisconsin views the 60 month time limits as an important means of 
motivation for both the participants and the case managers. The 
philosophy is quite simple: Time limits stress mutual responsibility. 
Government provides support and services designed to promote employment 
while, in return, participants are expected to prepare for and enter 
employment. Therefore, from the moment participants begin participating 
in W-2, they are urged to increase their work skills through work 
activities and education and training and enter the workforce as soon 
as possible, thus saving months of eligibility for future use.
    Although the time limit provisions under TANF prompted states to 
develop their own tougher state-specific time limit provisions, 
Wisconsin is different in that it allows up to 60-months of lifetime 
eligibility for W-2 benefits, but it limits the amount of time a person 
can participate in each W-2 subsidized employment positions to just 24-
months. This is meant to encourage moving up the ``W-2 ladder'' towards 
self-sufficiency without abruptly ending benefits. Based on the 
Department's analysis of current TANF law and regulations, Wisconsin's 
estimated caseload that will go beyond 60 months can continue to be 
funded using TANF, and will stay well under the 20% for a significant 
period of time.
Implementation of Time Limit Policies and Procedures

    As we developed our policies and procedures and implemented time 
limits, we found a number of consistencies across our W-2 caseload:

           Although participants may be aware of time limits, 
        they do not understand the specific details of the policy.
           The topic of time limits was neither at the 
        forefront of participant's minds nor a factor in influencing 
        their actions.
           Participant's time limited benefits as one-time 
        deadline without considering whether they will have to return 
        to cash assistance or not.

    Wisconsin developed policies and procedures to address these 
consistencies. Frequent explanation of time limits and the details of 
the policy, beginning with application and continuing throughout a 
participant's time on W-2, assists them in understanding the detail of 
the policies. Our FEPs (Financial and Employment Planners) must 
continually assist participants in sorting through the day-to-day 
complexities they may experience and create short-term strategies for 
helping them--using the reinforcements the law and policy have given 
them. And, the FEPs must assist participants in exploring other 
resources the participant may be able to use and explain the need to 
save for the future in case of emergencies such as labor market 
downturn.
    In addition, because we were not the first state to reach time 
limits, we looked to other states for their experiences. What we 
observed is that a number of states turned to a multitude of exemptions 
and extensions that allowed thousands of cases to continue receiving 
assistance despite the end of the time limit. As a result, the 
participants and the local agencies cannot take time limits seriously. 
This was an approach Wisconsin did not want to mirror. Based on other 
states' experiences, Wisconsin found that:

           Blanket exemptions or extensions lessen the sense of 
        urgency time limits place on recipients, case workers and 
        service providers;
           Under some circumstances, allowing cases additional 
        time on cash assistance is a step backward into a trap that 
        leaves these harder-to-serve cases dependent upon cash 
        assistance, just as we experienced under AFDC;
           Allowing wholesale extensions to state-imposed time 
        limits fails to prepare participants for the 60-month TANF time 
        limit;

    From the start, Wisconsin saw the need to prepare our administering 
agencies for the impacts of time-limits by ensuring that they were 
providing up-front, intensive case management. However, we recognized 
that even with encouragement and application of appropriate policies, 
not everyone would be successful in finding employment prior to 
reaching the time limits. For that reason, Wisconsin allows for 
extensions on a case-by-case basis to the time limits to give 
participants additional time in obtaining the skills, education and 
training and other supports they need. When determining if a W-2 
participant is appropriate for an extension, considerations include 
prior cooperation with work requirements; inability to work due to 
incapacitation; caring for other incapacitated family members; 
significant limitations to employment, such as low achievement ability; 
and inability to find work due to local labor market conditions.
Thoughts on Time Limits for TANF Reauthorization

    TANF reauthorization should retain time limits as they currently 
exist for the following reasons:

          1. We need to continue to infuse a sense of URGENCY: by 
        nature, people procrastinate.
          2. Forging an attachment to the workforce takes time. The 
        longer a work history you have--the more likely you can hold 
        onto the job you have or get another one when times are tough.
          3. Our employees who run the program need to help people 
        quickly--because their clients need the income now. Staff need 
        the push of a time limit as much as our participants do.
          4. Employers need workers today not tomorrow, and the job 
        that's there for our participant today may be filled with 
        someone else tomorrow.
          5. Our children need parents who are working role models 
        TODAY. Researchers Wolfe and Haveman followed 1,700 families 
        for 21 years--discovered: incidences of a child dropping out of 
        school dropped by one-half when the parent worked full-time.

    And finally,

          6. A lifetime limit encourages people to treat government 
        income assistance like an insurance policy or a savings 
        account. Used sparingly, and as a last resource.
Child-Only Caseload

    Our child-only caseload is stable and consists of children of SSI 
recipients and Kinship Care cases. In these cases, the parent of the 
child is either unable to work due to a disability or not caring for 
the child due to child welfare concerns. Both of these programs are run 
by the Wisconsin Department of Health and Family Services--this is 
particularly critical for the Kinship Care cases. It ensures that child 
welfare interventions and family reunification efforts can be made as 
necessary.
Where do we go from here?

    In Wisconsin, we are extending our efforts at serving the more 
severely barriered segment of the caseload. The W-2 program is built on 
the premise that everyone is capable of doing some form of work and 
there is a place for everyone in the program who is willing to 
participate to their ability. Given that premise, Wisconsin was careful 
to build in features that ensure those individuals with more barriers 
to employment will not fall through the cracks: the extension policies 
I mentioned earlier for both the 24-month and 60-month time limits; 
formal assessments are required for all W-2 participants placed in the 
lowest rung of the W-2 program; and flexibility in participation 
requirements which allow for services such as mental health counseling, 
AODA treatment, or domestic abuse services. We have a number of new 
initiatives underway that will serve to enhance our understanding of 
what strategies are most successful with this population. Among other 
things, we are contracting with the University of Wisconsin-Milwaukee 
to design a screening tool for multiple barriers and we recently 
implemented a performance standard that bases W-2 contract dollars on 
appropriate assessment of participants.
Conclusion

    TANF Reauthorization is an opportunity for Congress to further 
strengthen families through work. But in doing so, Congress must keep 
in mind the very real differences, not just across states, but from one 
community to the next:

           Rural communities vary drastically in their makeup 
        of human service resources, transportation services, and safe, 
        affordable housing when compared with Urban areas of a state; 
        and
           Pockets of high unemployment are a reality in most 
        states. These communities need special consideration for 
        programs that attract new businesses and retraining of 
        workers--an effort that requires a long-term planning approach;

    PRWORA's success thus far is based on the flexibility provided by 
Congress, not in spite of it. And state and local innovation are 
driving factors. It is difficult for researchers to study and quantify 
our successes because the multiplicity of strategies across states has 
created a program that looks like a patchwork quilt. But we owe it to 
our children to stay on this path where meeting individuals needs are 
paramount to meeting the needs of the system that serves them.
    Thank you.

                                

    Chairman Herger. Thank you very much, Ms. Reinert, and 
particularly for the great example that your State has set in 
this area.
    Now, we have the great pleasure of turning to our next 
witness, Ms. Dannetta Graves, Director, Montgomery County 
Department of Job and Family Services, Dayton, Ohio.
    Ms. Graves.

   STATEMENT OF DANNETTA GRAVES, DIRECTOR, MONTGOMERY COUNTY 
      DEPARTMENT OF JOB AND FAMILY SERVICES, DAYTON, OHIO

    Ms. Graves. Thank you. To the honorable Members of the 
Human Resources Subcommittee of the House Committee on Ways and 
Means and Representative Wally Herger, Chairman, I am here 
today to briefly discuss from a local perspective the 
implemented program strategies and the necessary flexibility 
and resources for the effective administration of work 
requirements and time limits under the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996.
    Ohio welfare reform legislation, in response to PRWORA, not 
only challenged counties to implement programs and strategies 
that would assist families to reach and maintain their maximum 
level of economic self-sufficiency, but also limited their 
receipt of TANF cash assistance to 36 months. The family is 
ineligible for 24 consecutive months before eligibility for 
cash assistance can be reconsidered for an additional 24 
months.
    The flexibility provided by Congress in PRWORA allowed 
Ohio's legislature to give counties two programs under which 
TANF assistance to families is provided, Ohio Works First, the 
cash assistance program, and the Prevention, Retention, and 
Contingency program. While Ohio's work requirements, self-
sufficiency contracts between recipients and the county 
department, sanctions for those who fail without good cause to 
fulfill their obligation, and their time limits played a role 
in our reform of the welfare system, it was the PRC program 
that allowed us to achieve the level of success we continue to 
enjoy, despite the current economic slowdown.
    Montgomery County in July 1992 had 41,450 individuals, 
nearly 15,000 families, receiving cash assistance at an average 
cost of $4.58 million per month. Today, this number is 11,448 
individuals, which is 5,128 families, and $1.67 million per 
month.
    This reduction is a direct result of Montgomery County's 
heavy emphasis on work and work preparation, investment in our 
Nationally recognized job center, which has some 48 partner 
agencies in it, a PRC program that focuses on providing people 
with the help they need to stay off public assistance, and our 
ability to involve the community and faith-based organizations, 
along with public agencies throughout the PRC-funded contracts 
to provide a myriad of programs to adults and youth. Many of 
these programs and services are targeted in Montgomery County's 
poorest neighborhoods and academic-deficient school districts.
    The programs are designed to achieve the following: Improve 
a families' opportunity to obtain and retain employment, 
promote youth academic success and career exploration and 
development, connect families to resources that enhance career 
advancement and earnings potential, reduce out-of-wedlock 
pregnancies, promote family formation, provide mentoring for 
families and youth, reduce substance abuse, increase general 
education attainment and knowledge of community resources, 
promote payment and receipt of child support, promote the 
opportunities for homeownership, reduce school dropout rates, 
and reduce family violence.
    Montgomery County in July 1999 was faced with 1,370 
families reaching the 36-month time limit in the first 3 months 
beginning October 1 of 2000. The need was clear. We had to 
implement a strategy that would significantly reduce the number 
of families who would face time limits and provide follow-up 
activities to those who actually did. In Ohio, each county had 
to establish the hardship criteria for extension of cash 
benefits.
    The agency established the outreach unit, which provides 
intensive treatment to all families who have reached receipt of 
20 months of cash assistance. This treatment includes home 
visits and assessments of the family situation to determine the 
barriers to self-sufficiency and provide access to the 
resources to address or relieve them. The intense treatment 
provided greater insight to the dynamics that prevent the 
realization of productive potential and growth. It also 
directed our efforts to seek other, more permanent resources, 
such as Supplemental Security Income (SSI) and Social Security 
disability, as well as other interventions to improve the 
family's stability and chances of achieving self-sufficiency.
    This strategy resulted in only 170 families that actually 
faced time limits in the first 3 months beginning in October of 
2000. The family situations discovered from the intensive 
efforts of the outreach unit, along with community forums with 
various stakeholders, established the hardship criteria. Once 
the criteria was applied, only 37 families had to face cash 
assistance termination in the first 3 months of the time limit. 
Also attached to my testimony, is information on these 
statistics so you can see where we are today.
    TANF reauthorization proposed by the President, in general, 
has strong support from those of us who are responsible for its 
local administration. However, increasing required work hours 
from 30 to 40 hours per week will dramatically increase the 
cost of child care. Adopting the work first philosophy means 
you must provide quality child care at the level necessary to 
achieve your goal. Limiting a State's ability to transfer TANF 
funding to the social service block grant from 10 percent to 
4.25 percent will severely impact some of our more innovative 
and effective programs to move families out of poverty.
    Maintaining an enhanced TANF flexibility will be an ongoing 
theme from all who come before you. It is that flexibility that 
allows us to assist families that are on cash assistance as 
well as those who recently left the rolls and those poor 
families who do not receive or have not received cash 
assistance.
    Remember, welfare reform is not just getting an adult 
member of the family a job. That is just the beginning. It is 
making sure that the children receive quality child care, 
after-school academic and cultural enrichment services, and 
career preparation. It is the availability of retention and 
advancement services to ensure employment now and in the 
future. Finally, it is the involvement of our community and 
faith-based organizations to enhance the efforts of our public 
agencies to improve the quality of life in our communities.
    [The prepared statement of Ms. Graves follows:]
Statement of Danetta Graves, Director, Montgomery County Department of 
                 Job and Family Services, Dayton, Ohio
    Good Morning:
    To the Honorable members of the Human Resource Subcommittee of the 
House Committee on Ways and Means; Rep. Wally Herger, Chairman.
    My name is Dannetta Graves and I am the director of the Montgomery 
County Department of Job and Family Services, Dayton, Ohio.
    I am here today to briefly discuss from a local perspective, the 
implemented programs, strategies, and necessary flexibility and 
resources for the effective administration of the work requirements and 
time limits under the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (PRWORA). Ohio's Welfare Reform legislation, 
in response to PRWORA, not only challenged counties to implement 
programs and strategies that would assist families to reach and 
maintain their maximum level of economic self-sufficiency, but also 
limited their receipt of TANF cash assistance to 36 months. The family 
is ineligible for 24 consecutive months before eligibility for cash 
assistance can be reconsidered for up to 24 additional months.
    The flexibility provided by Congress in PRWORA allowed the Ohio 
legislature to give counties two (2) programs under which TANF 
assistance to families is provided: Ohio Works First (OWF), the cash 
assistance program, and the Prevention, Retention, and Contingency 
(PRC) program. While Ohio's work requirements, Self-Sufficiency 
Contracts between the recipients and the county department, sanctions 
for those who failed without good cause to fulfill their obligations 
and time limits played a role in our reform of the welfare system, it 
was the PRC program that allowed us to achieve the level of success 
that we continue to enjoy despite the current economic slow-down.
    Montgomery County in July of 1992 had 41,450 individuals (nearly 
15,000 families) receiving cash assistance at an average cost of $4.58 
million per month. Today that number is 11,448 individuals (5,128 
families) at $1.67 million per month. This reduction is a direct result 
of Montgomery County's heavy emphasis on work and work preparation, 
investment in our nationally recognized Job Center (One-Stop Career 
Center with 48 partner agencies), a PRC program that focuses on 
providing people with the help they need to stay off public assistance, 
and our ability to involve Community and Faith-Based organizations 
along with public agencies through PRC funded contracts to provide a 
myriad of programs for adults and youth. Many of these programs and 
services were targeted in Montgomery County's poorest neighborhoods and 
academic deficient school districts. The program services are designed 
to achieve the following:
           Improve a family's opportunity to obtain and retain 
        employment
           Promote youth academic success, career exploration 
        and development
           Connect families to resources that enhance career 
        advancement and earnings potential
           Reduce out-of-wedlock pregnancies
           Promote family formation
           Provide mentoring for families and youth
           Reduce substance abuse
           Increase general educational attainment and 
        knowledge of community resources
           Promote the payment/receipt of child support
           Promote the opportunities for home ownership
           Reduce school drop-out rates
           Reduce family violence
    Montgomery County in July of 1999 was faced with 1,370 families 
reaching their 36 month time limit in the first three months beginning 
October 1, 2000. The need was clear. We had to implement a strategy 
that would significantly reduce the number of families who would face 
time limits and provide follow-up activities to those who actually did. 
In Ohio, each county had to establish the Hardship Criteria for 
extension of cash benefits. The Agency established the Outreach Unit 
which provides intensive treatment to all families who have reached 
receipt of 20 months of cash assistance. This treatment includes home 
visits and assessment of the family's situation to determine the 
barriers to self-sufficiency and provide access to resources to address 
or relieve them.
    This intense treatment provided greater insight to the dynamics 
that prevent the realization of productive potential and growth. It 
also directed our efforts to seek other more permanent resources (i.e., 
SSI and SSA disability) as well as other interventions to improve 
family stability and the chances of achieving self-sufficiency. This 
strategy resulted in only 170 families that actually faced time-limits 
in the first three (3) months beginning in October 2000. The family 
situations discovered from the intensive efforts of the Outreach Unit 
along with community forums with various stakeholder groups established 
the Hardship Criteria for extended benefits. Once the criteria was 
applied, only 37 families had their cash assistance actually terminated 
in the first three (3) months under time limits. Once again, PRC funded 
programs are used in the intensive efforts to reduce the number of 
families that face losing eligibility for cash benefits.
    TANF Reauthorization proposed by the President in general has 
strong support by those of us who are responsible for its local 
administration. However, increasing the required work hours from 30 to 
40 hours per week will dramatically increase the cost of chid care. 
Adopting the ``Work First'' philosophy means you must provide quality 
child care at the level necessary to achieve your goal. Limiting a 
state's ability to transfer TANF funding to the Social Service Block 
Grant from 10% to 4.25% will severely impact some of our more 
innovative and effective programs to move families out of poverty. 
Maintaining and enhancing TANF flexibility will be an ongoing theme of 
all who come before you. It is that flexibility that allows us to 
assist families that are on cash assistance as well as those who 
recently left the rolls and those poor families who do not receive cash 
assistance.
    Remember, Welfare Reform is not just getting the adult members of 
the family a job--that's just the beginning. It's making sure that 
children receive quality child care, after school academic and cultural 
enrichment services, and career preparation. It's the availability of 
retention and advancement services to ensure employment now and in the 
future. Finally, it's the involvement of our Community and Faith-Based 
organizations to enhance the efforts of our public agencies to improve 
the quality of life in our communities.
    [Attachments are being retained in the Committee files.]

                                

    Chairman Herger. Thank you very much, Ms. Graves. Now, we 
will hear from Mr. Mark Greenberg, Senior Staff Attorney, 
Center for Law and Social Policy. Mr. Greenberg?

 STATEMENT OF MARK H. GREENBERG, SENIOR STAFF ATTORNEY, CENTER 
                   FOR LAW AND SOCIAL POLICY

    Mr. Greenberg. Thank you. Mr. Herger and Members of the 
Committee, I appreciate being asked to testify today and 
appreciate your continuing interest in welfare reform.
    As we look ahead to reauthorization of the 1996 law, I 
think it is important to step back and acknowledge what an 
extraordinary shift there has been in the basic direction and 
orientation of State programs in recent years. This shift began 
well before the 1996 law, but was clearly accelerated by the 
1996 law. It has had the effect of fundamentally reorienting 
State welfare programs as programs that see their goals as 
helping to link families with employment. There are sometimes 
controversies about how States go about doing it and the best 
ways to do it, but I think there has been a broad-based shift 
across the country toward this basic orientation.
    A number of features of the 1996 law, not just the 
participation rates, contributed to this reorientation. The 
fixed funding contributed, both by telling States they had a 
limited amount of funding to use and at the same time that when 
their caseloads went down, that they would be able to redirect 
it to an array of other activities, including a whole set of 
activities to support low-income working families.
    The time limits likely contributed to the reorientation. 
The provisions of the law that involved engagement and work 
within a 2-year period contributed. The increased funding for 
child care contributed. The increased availability of health 
care outside the welfare system contributed. In short, a whole 
set of things contributed to a fundamental reorientation of how 
States saw what they were trying to do.
    Over the last number of years, we have seen an 
unprecedented caseload decline and we know from a lot of 
research that most of the families that have left assistance 
have entered into employment. At the same time, we know that 
often that employment is not stable, often that employment is 
low-wage, without basic benefits.
    As States and others now focus on the next directions for 
welfare reform, a lot of the conversation involves the families 
still receiving assistance, and there is a very strong sense 
that many of those families have multiple barriers to 
employment. While these barriers may not prevent work, the do 
call for different strategies.
    I am aware of the Urban Institute research and the GAO 
research on this topic, and I can only tell you that if you 
talk to State and local administrators, they will readily 
describe to you the extent of multiple barriers that they are 
now seeing and trying to figure out now to address.
    At the same time, there is enormous interest in trying to 
address the issue of how to help people find better jobs. Part 
of it is a conversation about what should happen while families 
are receiving assistance. Part of it is focused on what should 
happen to provide supports after families receive assistance. 
And there is a conversation about how to try to ensure that 
those families who do enter work are able to meet their health 
care needs and their child care needs and make ends meet.
    I have been struck over the course of the morning at the 
extent of focus on things like child-only cases and separate 
State programs. I can tell you that I know of no State in the 
country that is interested in trying to find ways to structure 
programs where people who are able to work can avoid work 
obligations. That is not the focus of the State efforts.
    There was clearly a significant number of States that did 
move two-parent families into separate State programs. They did 
so because they looked at the Federal participation 
requirements, they saw a 90-percent rate, and they recognized 
that if they helped two-parent families in their TANF programs, 
they would face serious risk of Federal penalties. That is why 
they did it. But politically, fiscally, conceptually, they have 
no interest in running programs where people are provided 
indefinite assistance without being expected to work.
    I do think that there is a serious data issue in trying to 
have a better picture of the extent of engagement in work-
related activities. From Federal participation data, we have 
good information about the numbers of families who are engaged 
in activities enough to count toward Federal participation 
rates. We do not have good information about what families are 
doing that does not count toward participation rates, because 
States are free to report that information on a voluntary basis 
but are not required to report it. A number of States clearly 
do not. We can state with confidence that at least 40 percent 
are engaged in activities. We know that the numbers are surely 
higher than that, but we do not have good information as to 
what those are.
    As you look ahead to reauthorization, it surely makes sense 
to get rid of a caseload reduction credit, because it simply 
rewards caseload reduction without regard to employment. It 
makes sense to put the focus on employment, and to have a 
measure of people leaving due to employment.
    It makes sense to broaden the countable activities to give 
States broader flexibility. I think it makes sense to provide 
additional funding to States so they expand the use of 
subsidized work programs, not on an indiscriminate basis, but 
for targeted use for families with serious employment barriers. 
And, it makes sense for States to have the flexibility to 
provide ongoing help to low-income working families without 
having to face Federal time limits restricting the ability to 
help those who go to work.
    I hope that these themes can be explored in the continuing 
discussion of reauthorization. Thank you.
    [The prepared statement of Mr. Greenberg follows:]
 Statement of Mark H. Greenberg, Senior Staff Attorney, Center for Law 
                           and Social Policy
    Mr. Chairman and Members of the Subcommittee:
    Thank you for inviting me to testify. I am a Senior Staff Attorney 
at the Center for Law and Social Policy (CLASP). CLASP is a nonprofit 
organization engaged in research, analysis, technical assistance and 
advocacy on a range of issues affecting low-income families. Since 
1996, we have closely followed research and data relating to 
implementation of Personal Responsibility and Work Opportunity 
Reconciliation Act. In addition, we often talk and visit with state 
officials, administrators, program providers, and individuals directly 
affected by the implementation of welfare reform efforts.\1\
---------------------------------------------------------------------------
    \1\ This testimony reflects ongoing collaborative work with a 
number of CLASP colleagues, including Steve Savner, Julie Strawn, 
Rutledge Hutson, and Hedieh Rahmanou.
---------------------------------------------------------------------------
    Today's hearing focuses on implementation of work requirements and 
time limits in state programs under the 1996 law. In the next few 
minutes, I'll briefly discuss the requirements of the law, experience 
since 1996, and potential issues for reauthorization. While I'll focus 
on the specific details of the law, my principal points are:
           Since 1996, the nation has seen an unprecedented 
        increase in employment among welfare recipients and, more 
        generally, among low-income single parent families.
           Work-related provisions, time limits, and other 
        features of TANF made important contributions, but have not 
        been the only factors, in this employment growth.
           The 1996 law set broad directions, but allowed 
        states enormous flexibility in the structuring their programs, 
        and states have used that flexibility to take a range of 
        approaches, but all focusing on expanding work among low-income 
        families.
           While work has increased, there are at least three 
        work-related concerns that need to be addressed in 
        reauthorization: how to increase employment among those 
        families with the most serious barriers; how to help families 
        get better jobs; and how to ensure that low-earning families 
        receive needed health care and child care assistance and have 
        enough income to make ends meet.
           To address these concerns, Congress should:
                   broaden states' abilities to count a range 
                of activities toward participation rates, so that 
                states can develop individualized plans that are most 
                effective in helping families enter sustainable 
                employment;
                   end restrictions on states' ability to use 
                vocational training as a strategy for helping parents 
                attain access to better jobs;
                   eliminate the TANF caseload reduction 
                credit, which currently rewards states for any caseload 
                reduction, whether or not it is due to employment; 
                instead, establish a structure under which states are 
                rewarded based on families leaving assistance due to 
                employment, with greater emphasis on higher-paying 
                jobs;
                   provide additional dedicated funding to 
                encourage states to implement transitional jobs 
                programs for TANF recipients and other low-income 
                individuals with serious employment barriers;
                   improve access to public benefits for low-
                earning families, expand child care funding, and allow 
                states to use federal TANF funds to provide ongoing 
                help to low-earning working families without that help 
                being subject to TANF time limits.
           The Administration's proposal would raise TANF 
        participation rates, require 40 hours of participation to fully 
        count toward participation rates, and limit the activities that 
        could count toward the first 24 hours of participation to a set 
        of ``direct work'' activities. Unfortunately, this approach 
        would significantly restrict state flexibility, compel states 
        to adopt models that do not reflect their best judgments about 
        how to structure programs, and pressure states to adopt 
        approaches that are not consistent with key research findings 
        about the most effective welfare-to-work programs. Moreover, 
        any proposal that envisions significant increases in numbers 
        and hours of participants needs to carefully consider and 
        adequately address the program and child care costs that would 
        necessarily arise in meeting such requirements.
Employment Outcomes Under TANF
    The 1996 welfare law sought to emphasize work in a number of ways: 
by giving states fixed funding that would remain constant as caseloads 
fell, expanding child care funding, imposing time limits on federally-
funded assistance, ending entitlements to assistance, ensuring that 
low-income families could receive Medicaid without participating in 
welfare, encouraging a ``work first'' philosophy, requiring that 
families must be ``engaged in work'' as defined by states within 24 
months, and by providing that states would face federal penalties 
unless they met annual work participation rates. At this hearing, much 
of the focus will be on participation rate rules. While it is valuable 
to review states' experience with participation rates, it is also 
important to appreciate that participation rates have only been one 
aspect of an overall effort to reorient welfare systems and promote and 
support work.
    All available evidence points to a dramatic increase in employment 
among low-income single mothers in recent years. In announcing its 
welfare reform proposal, the Administration reported that after a 
decade in which the annual employment rate for single mothers hovered 
around 58%, the rate had increased every year through 2000, and reached 
over 73% of mothers heading families in 2000. Moreover, employment 
rates for never-married mothers increased from under 46% in 1995 to 
nearly 66% in 2000, an increase of over 40% in just five years. The 
Administration observed: ``These employment increases by single mothers 
and former welfare mothers are unprecedented. By 2000, the percentage 
of single mothers with a job reached an all-time high.'' \2\
---------------------------------------------------------------------------
    \2\ Working Toward Independence, pp. 6-7.
---------------------------------------------------------------------------
    TANF played an important role in this employment growth, though it 
is probably impossible to isolate TANF's independent role. The growth 
in employment of low-income single mothers with young children began 
between 1992 and 1993. During the 1990s, a set of factors contributed 
to this employment growth: the strong national economy, the expansion 
of the Earned Income Tax Credit, increased availability of child care 
subsidies, expansion of health coverage for children, the minimum wage 
increase, and improved child support enforcement. There seems to be a 
consensus among researchers that welfare reform efforts played an 
important role, with the effects more pronounced in latter years.\3\ 
Other factors occurring at the same time all pushed in the same 
direction, and we don't know how the same policies would have worked in 
a different economy, or how one component would have worked without the 
others.
---------------------------------------------------------------------------
    \3\ Rebecca M. Blank, Declining Caseloads/Increased Work: What Can 
We Conclude About the Effects of Welfare Reform?,'' FRBNY Economic 
Policy Review, (New York: Federal Reserve Bank of New York, September 
2001), Available online: www.newyorkfed.org/maghome/econ--pol/2001/
801rbla.pdf
---------------------------------------------------------------------------
    The ``TANF effect'' involved both additional requirements and 
federal block grant funds that became available because of caseload 
declines. Since funding levels were generally set to reflect welfare 
caseloads from the early-mid 1990s, and caseloads began falling in 
1994, states were able to redirect funds previously spent on cash 
assistance to employment-related services, among other activities. 
Notably, by FY 2000, nearly $4 billion in TANF funds was being 
committed to child care, much of it directed to expanding child care 
for low-earning working families outside the welfare system. States 
also committed freed-up funds to expanding transportation assistance; 
state earned income tax credits, nonrecurrent-short term benefits, 
employment retention and advancement initiatives, and other 
expenditures to help low-earning working families.
Challenges in the next stage of welfare reform
    As states, researchers, and others have reviewed TANF's record, 
there has been little dispute about states' strong emphasis on work. 
Rather, work-related concerns have often centered in three key areas:
           how to help families with the most serious 
        employment barriers enter employment;
           how to help families get better jobs; and
           how to help families entering employment receive 
        needed health care and child care assistance and have enough 
        income to make ends meet.
    First, families still receiving assistance often have serious and 
multiple barriers to employment. A General Accounting Office study 
found that 44% of TANF recipients had at least one physical or mental 
impairment.\4\ Estimates of the prevalence of substance abuse among 
TANF recipients range from 6% to 27%.\5\ Two studies found that about a 
quarter of TANF recipients have a child with an illness, disability or 
emotional problem.\6\ Estimates of recent or current domestic violence 
are generally in 20-30% range--while estimates of lifetime experience 
of domestic violence tend to be in the 50-60% range.\7\ In 1999, about 
44% of adult TANF recipients lacked a high school diploma or GED.\8\ 
Studies in three states suggest that between a fifth and a third of 
parents receiving TANF have learning disabilities.\9\ Limited English 
proficiency is also a problem in many places; for example, in Los 
Angeles County, 41% of the TANF caseload had limited English 
proficiency.\10\ The existence of barriers doesn't preclude work, but 
multiple barriers make it more difficult.
---------------------------------------------------------------------------
    \4\ U.S. General Accounting Office, Welfare Reform: More 
Coordinated Federal Effort Could Help States and Localities Move TANF 
Recipients With Impairments Toward Employmen t, GAO-02-37, (Washington, 
DC, October 31, 2001), 3. Available online: http://www.gao.gov
    \5\ Amanda Barusch, Mary Jane Taylor, and Soleman Abu-Bader, 
Understanding Families with Multiple Barriers to Self Sufficiency, 
(Salt Lake City: University of Utah, Social Research Institute, 1999), 
21; Sandra K. Danziger, Ariel Kalil, and Nathaniel J. Anderson, ``Human 
Capital, Physical Health, and Mental Health of Welfare Recipients: Co-
occurrence and Correlates,'' Journal of Social Issue s, Vol. 56, (4), 
(Malden, MA: Blackwell Publishers, 2000), 635-654; Rukmalie Jayakody, 
Sheldon Danziger, and Harold Pollak, ``Welfare Reform, Substance Use 
and Mental Health,'' Journal of Health Politics, Policy and Law, Vol. 
25(4), (Durham, NC: Duke University Press, 2000); Gretchen Kirby & 
Jacquelyn Anderson, Addressing Substance Abuse Problems Among TANF 
Recipients: A Guide for Program Administrators, Final Report, 
(Washington, DC: Mathematica Policy Research Inc., July 2000).
    \6\ Heidi Goldberg, Improving TANF Program Outcomes for Families 
with Barriers to Employment, (Washington DC: The Center on Budget and 
Policy Priorities, January 2002) available online at http://
www.cbpp.org.
    \7\ Richard M. Tolman and Jody Raphael, ``A Review of Research on 
Welfare and Domestic Violence,'' Journal of Social Issue s, Vol. 56(4), 
(Malden, MA: Blackwell Publishers, 2000), 655-82.
    \8\ Sheila R. Zedlewski and Donald Alderson, Before and After 
Reform: How Have Families on Welfare Changed?, (Washington, DC: The 
Urban Institute, April 2001), available online at: http://
newfederalism.urban.org/html/series__b/b32/b32.html
    \9\ Heidi Goldberg, Improving TANF Program Outcomes for Families 
with Barriers to Employment, (Washington DC: The Center on Budget and 
Policy Priorities, January 2002) available online at http://
www.cbpp.org.
    \10\ Heidi Goldberg, Improving TANF Program Outcomes for Families 
with Barriers to Employment, (Washington DC: The Center on Budget and 
Policy Priorities, January 2002) available online at http://
www.cbpp.org
---------------------------------------------------------------------------
    Second, while employment growth has been dramatic, much of the 
employment has been in low-wage jobs. For working adults receiving 
assistance, earnings averaged $597.97 per month in FY 99.\11\ According 
to the Urban Institute's Nation Survey of America's Families, median 
wages for recent welfare leavers in 1999 were $7.15 an hour.\12\ State 
studies typically report wages in that range. A CLASP review of more 
than 30 recent leavers studies found that median wages ranged from 
$6.00 to $8.47 an hour, while median first quarter earnings ranged from 
$1,884 to $3,416, with most states showing median quarterly earnings of 
$2,000 to $2,500.\13\ In CLASP's review, five states reported average 
annual earnings for leavers continuously employed since leaving, and in 
no case did the average earnings exceed the poverty guideline for a 
family of three. Moreover, while there is some earnings growth over 
time, earnings remain low for most of the affected families. CLASP's 
review found that in most states, earnings in the fourth quarter after 
exit grew by only a few hundred dollars above first quarter earnings.
---------------------------------------------------------------------------
    \11\ U.S. Department of Health and Human Services, 
``Characteristics and Financial Circumstances of TANF Recipients, 
Fiscal Year 1999,'' Available online: http://www.acf.dhhs.gov/programs/
opre/characteristics/fy99/analysis.htm
    \12\ Pamela Loprest, How Are Families That Left Welfare Doing? A 
Comparison of Early and Recent Welfare Leavers, (Washington, DC: The 
Urban Institute, April 2001), 3. Available online: http://
newfederalism.urban.org/pdf/anf__b36.pdf
    \13\ Elise Richer, Steve Savner, and Mark Greenberg, Frequently 
Asked Questions about Working Welfare Leavers, (Washington, DC: Center 
for Law and Social Policy, November 2001).
---------------------------------------------------------------------------
    Third, the fact that those entering employment often have low 
earnings underscores the importance of access to ``work supports''--
Food Stamps, Medicaid, child care assistance, and child support 
services--as a strategy for helping families in low-wage jobs meet 
basic needs. However, participation in Food Stamps and Medicaid sharply 
declines after families leave assistance, most working leavers do not 
receive child care assistance, and most leavers do not receive child 
support. And, under current law, if a state uses TANF funds to provide 
ongoing help to a low-earning working family, that assistance counts 
toward the federal five-year time limit. Thus, one key set of issues 
for reauthorization concerns how to improve access to work support 
programs for low-earning working families.
TANF participations rates: background
    The 1996 law has two separate participation rates: an overall rate 
and a separately calculated two-parent rate. States risk penalties if 
they do not satisfy these requirements. To count toward a participation 
rate, an individual must participate in a federally ``countable 
activity'' for a specified number of hours each week. The overall rates 
increased from 25% in 1997 to 50% in 2002, and two-parent rates 
increased from 75% to 90%; however, under a provision known as the 
caseload reduction credit, a state's actual rates can be adjusted 
downward if the state's caseload has fallen since 1995 for reasons 
other than changes in eligibility rules, and as a result, states have 
typically had effective rates far below the listed ones.
    To count toward the overall rate, single-parent families with 
children under age six must be engaged in countable activities for at 
least 20 hours a week; all other families must be engaged for at least 
30 hours a week. Generally, a state can count hours in paid or unpaid 
work, job search and job readiness (for up to six weeks) and vocational 
training (for up to a year for part of the caseload) toward the first 
20 hours of activity, and a broader list toward required hours in 
excess of 20.\14\
---------------------------------------------------------------------------
    \14\ More precisely, under current law, to count toward the all-
families rate, at least 20 hours per week must be attributable to:
     Unsubsidized or subsidized employment;
     Work experience and community service programs, i.e., work 
without wages in return for receiving the welfare grant;
     On-the-job training;
     Provision of child care services to an individual who is 
participating in a community service program;
     Vocational educational training for up to 12 months, 
provided that no more than 30% of those counting toward a state's 
participation rate may do by being engaged in vocational educational 
training or by being teen parents engaged in school completion;
     Job search and job readiness assistance for up to 6 weeks 
(or twelve weeks in periods of high unemployment).
    In addition, teen parents can count toward the participation rates 
by being engaged in school completion or education directly related to 
employment, but such activities are counted within the 30% cap 
described above.
      For the all-families rate, hours in excess of 20 may be counted 
when an individual participates in:
     Job skills training directly related to employment;
     Education directly related to employment, for a recipient 
who has not received a high school diploma or a certificate of high 
school equivalency; or
     Satisfactory attendance at secondary school or in a course 
of study leading to a certificate of general equivalence, for a 
recipient who has not completed secondary school or received such a 
certificate.
---------------------------------------------------------------------------
    In FY 2000, every state met its overall participation rate 
requirement.\15\ The national overall participation rate was 34%. Every 
state qualified for a caseload reduction credit, and most states had 
adjusted required rates of 10% or less. At the same time, most states 
exceeded their adjusted required rates by thirty percentage points or 
more.
---------------------------------------------------------------------------
    \15\ Vermont's participation level was not determined, because the 
state asserted it was not subject to the participation rate 
requirements until the expiration of its waiver.
---------------------------------------------------------------------------
    The most common activity counting toward satisfying participation 
requirements was participation in unsubsidized employment: In FY 2000, 
two-thirds (66%) of those counting toward participation rates did so 
through unsubsidized employment, followed by job search (11.7%); work 
experience (10.6%); vocational educational training (10.5%); community 
service (6.4%), with the remainder in other countable activities. At 
the same time, states varied significantly in their approaches. For 
example, in five states (Montana, Wisconsin, South Dakota, West 
Virginia, and Wyoming) more than half of countable participants were 
engaged in work experience or community service. But, in most states, 
less than 10% of those counting toward participation rates were in such 
activities, and in five states (Minnesota, Michigan, Indiana, 
Connecticut, and Iowa) less than 1% were engaged. Similarly, states 
also took very different approaches to using vocational educational 
training in their programs, with nine states reporting over 20% of 
those counting toward participation rates in vocational educational 
training, while thirteen states reported less than 5%.
    A state's participation rate is not a measure of the extent of 
``engagement'' among families, because it counts the number of persons 
who participated in a federally-specified set of activities for a 
specified number of hours during the month. States can voluntarily 
choose to report additional participation in other activities, and some 
states elect to do so. From that reporting, one can determine that at 
least 40% of TANF adults were engaged in state-reported activities each 
month. The actual figure would surely be higher if all states were 
reporting engagement in state-approved activities, but from current 
reporting, one cannot determine the actual numbers engaged, or what 
they were engaged in, or what share were engaged over a period of 
months.
    Similarly, the participation rate is not a measure of state success 
in job placements or of the quality of job entries. In fact, in some 
circumstances, a state might find that rapid job entries translate to a 
lower participation rate, particularly if entering employment means 
immediate or rapid loss of assistance. Some states have clearly sought 
to maximize participation in federally-specified activities, and others 
have adopted different approaches, but from available data, it is not 
possible to determine whether one approach has had stronger impacts in 
increasing employment.
    For two-parent families, the 1996 law established participation 
rates escalating from 75% to 90%. A number of states made judgments 
that it would be impossible to reach a 90% rate, and that they would 
face federal penalties if they assisted two-parent families in their 
TANF programs. As a result, in FY 2000, seventeen states did not assist 
two-parent families in their TANF programs; instead, HHS indicates that 
fourteen states designed ``separate state programs,'' using maintenance 
of effort funds, and assisted all or some of the state's two-parent 
families in these separate programs. Generally, the goal of these 
programs was not to avoid work requirements for two-parent families, 
but rather to be able to assist them, impose work requirements, and 
provide needed work-related services without subjecting the state to 
risk of federal penalties. And, the participation rate in separate 
state programs--43.1%--was close to the national average participation 
rate of 48.9% in TANF-funded two-parent families. Nationally, only two 
states (Illinois and Rhode Island) reported reaching a 90% 
participation rate for two-parent families.
TANF Participation Rates: Recommendations
    A threshold question is whether there could be a better approach to 
measuring employment outcomes than the current participation rate 
structure. The 1996 law provided for high performance bonuses, and 
bonuses were awarded in 1999 and 2000 for state outcomes relating to 
job entries, earnings gains, and employment retention. Some 
administrators have expressed concern that participation rates only 
measure ``process,'' and that it would be better to have an option to 
be measured by employment outcomes. There are a number of difficult 
questions about how to design such a system, but in reauthorization, 
Congress might consider building in sufficient flexibility to allow 
states to elect to be accountable for a set of outcome measures in lieu 
of participation rates.
    Assuming a basic participation rate structure, though, we recommend 
four key changes for reauthorization:
    First, Congress should replace the caseload reduction credit with a 
credit that reflects families leaving assistance due to employment. The 
caseload reduction credit has rewarded caseload reduction whether or 
not it translated to employment. It should be replaced with a measure 
that actually focuses on whether leavers are employed, and gives states 
more credit for families entering sustainable employment at higher 
wages.
    Second, the separate two-parent participation rates should be 
eliminated, so that states need not fear that they will risk federal 
penalties by assisting two-parent families in their TANF programs.
    Third, the law's restriction on counting vocational educational 
training should be removed. In the TANF structure, a state has no 
incentive to allow participation in training unless the state believes 
that the training will help an individual enter employment or get a 
better job. The state should be free to make that choice.
    Fourth, states should be allowed to have broader discretion to 
count ``barrier removal activities'' toward participation rates. As 
states have begun working with families with multiple barriers (e.g., 
health, mental health, disability, substance abuse, domestic violence, 
lack of English language proficiency), they have typically been unable 
to count involvement in individualized, barrier removal activities 
toward the rates. Again, a state has no incentive to allow or pay for 
such activities unless the state believes it will be an effective means 
to help a family move toward employment.
    H.R. 3625, introduced by Reps. Cardin, Stark, Levin, McDermott, and 
Doggett, reflects a number of constructive provisions in its approach 
to participation rates. The bill would eliminate the caseload reduction 
credit, and substitute an employment credit; eliminate the 30% cap on 
vocational training and allow such training to count toward 
participation rates for up to 24 months; and allow barrier removal 
activities to count toward participation rates for up to six months.
    Finally, Congress should make available additional funding, on an 
optional basis, for states to expand the use of transitional jobs. 
Since 1997, several states (including Washington, Pennsylvania, and 
Minnesota) and more than 30 cities have established transitional jobs 
programs to help increase employment and earnings of TANF recipients 
who have been unable to find stable, unsubsidized employment. Such 
programs generally combine wage-paying jobs with skill development 
activities and related support services. Over 30 programs responding to 
a CLASP survey reported promising results, but transitional jobs are 
typically not used in state TANF programs, in part because they are 
more expensive than other alternatives. While we do not recommend 
requiring states to adopt such programs, we do recommend providing 
additional funding to encourage their replication and expansion.
Participation Rates: The Administration's Approach
    The Administration has proposed an extensive set of new 
requirements, and the full details are not yet available. However, key 
provisions would:

           Increase the monthly participation rate from 50% to 
        70% by 2007, while phasing out the caseload reduction credit.
           Increase weekly participation requirement from 20 
        hours for single parents with children under 6 and 30 hours for 
        other parents to 40 hours for all families with children age 1 
        or older.
           Provide that in meeting the 40-hour requirement, at 
        least 24 hours must be in ``direct'' work activities--
        unsubsidized or subsidized employment, supervised work 
        experience or community service programs, on-the-job training 
        and school completion for teen parents. Vocational training and 
        barrier removal activities would generally not be countable 
        toward the first 24 hours each week. For up to 3 months in a 24 
        month period, states could count participation in short-term 
        substance abuse treatment, rehabilitation, and work-related 
        training toward meeting the 24-hour direct work requirement.

    In addition, states could count individuals who leave TANF due to 
employment for up to three months, and could exclude families from the 
participation rate calculation for the first month of assistance.
    We share the Administration's goals of increasing engagement of 
families with the most serious barriers, and of helping families enter 
sustainable employment and advance to better jobs. At the same time, we 
have three principal concerns about the Administration's specific 
proposal, and an additional concern about potential costs.
    First, the proposal is significantly more prescriptive and 
restrictive than current law. The combination of increasing effective 
rates, raising hourly requirements, and limiting the activities that 
can count toward the first 24 hours of engagement would allow states 
far less flexibility in structuring activities than they currently 
have. For example, a state may now count full-time engagement in 
vocational training for up to 12 months (subject to a limit on the 
total number countable), but under the proposal, no more than 3 months 
of full-time engagement in vocational training would be allowable. 
States may now count engagement in job search for up to six weeks a 
year, while under the proposal, any counting of job search would 
compete with any other activity that a state wanted to count toward the 
``flexible'' three-month allowance. States can now choose whether to 
require more than 20 hours of participation for single parents of 
children under age 6, while under this proposal, they would be required 
to establish 40-hour participation plans for such families with 
children age 1 and older.
    Second, the proposal does not reflect the best judgment of most 
states about how to structure their programs. The Administration's 
approach reflects a particular program model, and any state is free to 
adopt that model under the current TANF structure, but states have 
generally not elected to do so. In structuring their TANF programs, 
some states have placed strong emphasis on job search programs aimed at 
connecting families with employment as rapidly as possible. Some have 
greatly liberalized their policies to broaden support to families who 
enter low-wage jobs. Most states significantly reduced the role of 
education and training in their programs (at least in part due to 
federal participation rate rules), but education and training remains a 
significant component in some states. Generally, most states have made 
only limited use of unpaid work experience and community service 
programs, and even more limited use of subsidized employment and on-
the-job training. No state reports that participants averaged 40 hours 
of engagement a week. At least in part, this is because a parent 
employed for forty hours a week will not be eligible for continuing 
TANF assistance in most states. Rather, in FY 2000, states reported an 
average of 29 hours a week for those reported participating in one or 
more work-related activities.
    One of the strongest themes in state experience has been concern 
about imposing one-size-fits all rules. For some recipients in some 
circumstances, a well-structured work experience program may be an 
entirely appropriate activity that can help the individual move toward 
unsubsidized employment. But, for an individual with substantial recent 
work experience, it may be wholly inappropriate. And, some individuals 
with multiple barriers may be able to move into a structured work 
activity within three months, but one would be hard-pressed to say that 
that would be true for all individuals at all times. And, some training 
programs can be completed in three months, but the federal government 
is ill-suited to say that three months is right and four months is 
wrong.
    Finally, the Administration's proposed approach is not what would 
be suggested from the welfare-to-work research. The best evidence from 
two decades of evaluations of welfare-work strategies is that the most 
effective approaches are ``mixed strategy'' programs. Such programs 
provide a range of services, such as job search, life skills, work-
focused basic education, and occupational training. The most successful 
site by far in National Evaluation of Welfare-to-Work Strategies 
(NEWWS)--Portland, Oregon--stressed moving individuals into the 
workforce quickly but emphasized finding good jobs and allowed the 
first activity for each person to vary depending on skills, work 
history, and other factors.\16\ Portland not only increased overall 
employment and earnings by much more than the other ten sites but also 
helped people stay employed longer and increase their earnings 
more.\17\ More generally, programs achieving the biggest and longest-
lasting impacts on employment and earnings have consistently been those 
using a mix of services, and have not have had large work experience 
components.
---------------------------------------------------------------------------
    \16\ Freedman, Stephen, Daniel Friedlander, Gayle Hamilton, JoAnn 
Rock, Marisa Mitchell, Jodi Nudelman, Amanda Schweder, and Laura 
Storto. 2000. Evaluating Alternative Welfare-to-Work Approaches: Two-
Year Impacts for Eleven Programs. Washington, DC: U.S. Department of 
Health and Human Services and U.S. Department of Education.
    \17\ National Evaluation of Welfare to Work Strategies: Four-Year 
Impacts of Ten Programs on Employment Stability and Earnings Growth,'' 
Stephen Freedman, Manpower Demonstration Research Corporation, December 
2000.
---------------------------------------------------------------------------
    Moreover, programs that have raised wages typically provided 
substantial access to job training. While many moved into jobs quickly 
in Portland, some received adult education and vocational training for 
a year or more, attaining occupational certificates that enabled them 
to qualify for higher paying jobs.\18\ The NEWWS evaluation, and 
earlier research on the Center for Employment Training, suggest that 
access to occupational training, especially for those without a high 
school diploma or GED, may be a key to helping recipients find higher 
paying jobs. The three NEWWS sites that most increased hourly pay for 
nongraduates--Columbus, Detroit, and Portland--also boosted 
participation in postsecondary education or occupational training. 
Nongraduates in Portland were four times more likely to receive a trade 
license or certificate than those not in the program. Other programs, 
such as Alameda County GAIN and Baltimore Options, have used training 
to increase wages for high school graduates.\19\
---------------------------------------------------------------------------
    \18\ Scrivener, Susan, Gayle Hamilton, Mary Farrell, Stephen 
Freedman, Daniel Friedlander, Marisa Mitchell, Jodi Nudelman, and 
Christine Schwartz. 1998. The National Evaluation of Welfare-to-Work 
Strategies: Implementation, Participation Patterns, Costs, and Two-Year 
Impacts of the Portland (Oregon) Welfare-to-Work Program. Washington, 
DC: U.S. Department of Health and Human Services and U.S. Department of 
Education.
    \19\ Strawn, Julie, and Karin Martinson. 2000. Steady Work and 
Better Jobs: How to Help Low-Income Parents Sustain Employment and 
Advance in the Workforce. New York: Manpower Demonstration Research 
Corporation.
---------------------------------------------------------------------------
    In sharp contrast, the best research evidence indicates that work 
experience programs have not increased employment or earnings. Based on 
research conducted on a number of unpaid work experience in the 1980's, 
the Manpower Demonstration Research Corporation concluded, ``there is 
little evidence that unpaid work experience leads to consistent 
employment or earnings effects.'' \20\
---------------------------------------------------------------------------
    \20\ ``Unpaid Work Experience for Welfare Recipients: Findings and 
Lessons from MDRC Research'' Thomas Brock, David Butler, and David 
Long, MDRC, September 1993, p. 3.
---------------------------------------------------------------------------
    Transitional Jobs programs that combine paid work with education 
and support services have achieved promising results. In contrast to 
unpaid work experience, research on the Washington State Community Jobs 
program, a Transitional Jobs program that provides paid work and access 
to education, training and other services shows positive placement and 
wage rates for recipients with significant and multiple barriers to 
employment.\21\ Transitional jobs programs are costly, however, and not 
appropriate for everyone and so cannot be implemented on the scale that 
would be needed to meet the Administration's proposed requirements.
---------------------------------------------------------------------------
    \21\ ``Effects of WorkFirst Activities on Employment and Earnings, 
Marieka Klawitter, Evans School of Public Affairs, University of 
Washington, September 2001, p. 4-5, http://www.wa.gov/WORKFIRST/about/
studyActiv.pdf
---------------------------------------------------------------------------
    Drawing from this research, we do not recommend a single model for 
all states, but rather that states should continue to have flexibility 
in structuring their programs; it is appropriate for a participation 
rate structure to encourage states to increase engagement, but not for 
the federal government to mandate the specific strategies that states 
must use.
    Finally, it seems clear that greatly increasing numbers of 
participants and numbers of hours of participation will result in 
increased program costs and increased child care costs. Yet the 
Administration has proposed continuing TANF funding at FY 01 levels and 
continuing child care funding at FY 02 levels. The fact that a proposal 
would cost money is not, in itself, an argument against the proposal, 
but it is an argument for ensuring that the costs are estimated and 
adequately addressed. In FY 01, TANF spending by states exceeded the 
amount of state basic block grants, and it is unclear what states would 
be expected to cut in order to address the program costs. And, with 
fixed child care funding, states would face the specter of cutting 
child care funding for low-earning working families outside the welfare 
system in order to meet the new requirements.
Time Limits
    The 1996 law imposed restrictions on the use of federal TANF funds 
for the provision of assistance to families. Generally, the law 
provided that states could not use federal TANF funds to provide 
assistance to a family that includes an adult for more than sixty 
months, with states allowed exceptions for up to 20% of their cases. 
Since the law's restrictions applied to use of federal TANF funds, 
states were allowed flexibility to determine whether to impose time 
limits when assistance was provided with state funds.
    As with other aspects of TANF design, states have taken a wide 
range of approaches in their time limits policies. Twenty states 
elected to establish time limits shorter than five years, with 
seventeen of those states terminating assistance to all family members 
when the time limit was reached. Most states elected to establish five-
year time limits, though they vary in their exceptions to time limits 
and in whether assistance is terminated to all or some family members 
when the time limit is reached. Two states (Michigan and Vermont) 
elected not to impose a time limit. They are entitled to do so under 
the TANF structure, because the federal time limit is a restriction on 
the use of federal funds, and states are ultimately free to determine 
their own approach when using state funds.
    To date, there is very little information about families reaching 
federal time limits, because states first began to reach the 60-month 
limit in 2001, and some states will not do so until July of 2002. There 
is no federal administrative data currently available about the number 
of families whose cases have closed due to time limits. The best 
available information about the number of families who have lost 
assistance due to time limits comes from an Associated Press survey 
which reported that as of Spring of 2001, about 125,000 families had 
assistance terminated and roughly another 29,800 families had their 
assistance reduced due to time limits, though the numbers are likely to 
have grown significantly since that time.
    One of the most striking findings from states that have elected 
shorter time limits is that a significant share of those terminated due 
to time limits are often low-earning working families. In part, this 
occurs because in implementing TANF, most states liberalized ``earnings 
disregards'' rules, i.e., so that assistance was not reduced on a 
dollar-for-dollar basis as families entered employment. One virtue of 
these earnings disregards policies is that they allow states to provide 
ongoing help to families working in very low-wage jobs. But, as a 
consequence, these families become more likely to receive enough months 
of assistance to reach state time limits. In a number of states that 
implemented time limits shorter than five years, from 40% to 87% of all 
families whose benefits were terminated as a result of time limits were 
employed, though often with very low earnings, at the time they were 
terminated.\22\ Compared with other TANF leavers, time limit leaver 
families were likely to have fewer hours of work, lower earnings, and 
higher poverty rates. Poverty rates reported for time limit leavers in 
state studies were high: for example, 73% in Utah, 74% in North 
Carolina, 82% in Cuyahoga County, 86% in Virginia. In experimental 
demonstrations in Florida and Connecticut, average family income fell 
when families began reaching time limits, because gains in employment 
income did not offset the losses in public benefits.\23\
---------------------------------------------------------------------------
    \22\ Mark Greenberg, ``Time Limits and Those Still Receiving 
Assistance: Background and Issues for Reauthorization,'' presentation 
to Senate Finance Committee Forum Series, November 19, 2001.
    \23\ Dan Bloom, Laura Melton, Charles Michalopoulos, Susan 
Scrivener, and Johanna Walter, Jobs First: Implementation and Early 
Impacts of Connecticut's Welfare Reform Initiative, (New York: Manpower 
Demonstration Research Corporation, March 2000), 78. Available online: 
http://www.mdrc.org/Reports2000/Connecticut/CT-JobsFirst.pdf; Dan 
Bloom, James J. Kemple, Pamela Morris, Susan Scrivener, Nandita Verma, 
and Richard Hendra, The Family Transition Program: Final Report on 
Florida's Initial Time-Limited Welfare Program,(New York: Manpower 
Demonstration Research Corporation, December 2000), 180. Available 
online: http://www.mdrc.org/Reports2000/Florida-FTP/FTP-Final-
FullRpt.pdf
---------------------------------------------------------------------------
    A set of states--including Illinois, Delaware, Rhode Island, and 
Maryland--have adopted policies under which assistance for low-earning 
working families is paid with state rather than federal funds, so that 
the state can provide continuing help to low-earning families. However, 
taking this approach depends on having sufficient flexible state funds, 
and adds administrative complexity to program design.
    The federal time limit applies to families in which an adult is 
receiving assistance. Thus, it does not apply to ``child-only cases,'' 
though states are free to impose their own time limits and restrictions 
on such families. While the absolute number of child-only cases fell 
from 978,000 in 1996 to 718,642 in 2000, their share of the caseload 
increased from 21.5% to 31.5%, because the overall caseload declined 
faster than the child-only caseload.\24\ In 1999, almost two-thirds 
(65.5%) of children in child-only cases lived with a parent; twenty-two 
percent lived with grandparents and 8.5% lived with other 
relatives.\25\ In general, children could be residing with a parent 
ineligible for TANF due to receipt of Supplemental Security Income 
(SSI), to their immigration status or their sanction status. The Lewin 
Group has reported that in 1997, 39% of the cases were non-parent 
(relative caregiver) cases, while 23% of the cases had parent(s) 
receiving Supplemental Security Income, 16% had parent(s) ineligible 
because of immigration status, and 9% had sanctioned parent(s).\26\
---------------------------------------------------------------------------
    \24\ Department of Health and Human Services, Temporary Assistance 
to Needy Families: Third Annual Report to Congress, Table 10:3, 
(Washington, DC: 2000); Department of Health and Human Services, TANF 
Participation Rates and Case Characteristics, Table 3A, available 
online at http://www.acf.dhhs.gov/programs/opre/paticip/index.htm. 
(Washington, DC; 2002).
    \25\ Department of Health and Human Services, Temporary Assistance 
to Needy Families: Third Annual Report to Congress, Table 10:26.1, 
(Washington, DC: 2000). HHS has not yet released this breakdown of 
child-only cases by type for 2000.
    \26\ Department of Health and Human Services, Understanding the 
AFDC/TANF Child-Only Caseload: Policies, Composition, and 
Characteristics in Three States, available online at http://
aspe.hhs.gov/hsp/child-only-caseload00/execsum.htm (Washington, DC: 
2000). Note that in 1988, 12% of the cases consisted of children living 
with parents who were ineligible for other reasons or for which the 
reason was not known. In 1997, the comparable percentage was 13%.
---------------------------------------------------------------------------
Time Limits: Recommendations
    Our principal recommendation concerning time limits is that states 
should be allowed to use federal TANF funds to provide ongoing 
assistance to low-earning working families, without needing to apply a 
time limit against working families. Under current law, work policies 
and time limits policies work at cross-purposes with each other. On the 
one hand, states are often seeking to encourage families to take any 
available job, and want to provide help to families who are working in 
low-wage jobs. But, if federal TANF funds are used to provide that 
assistance, the month counts against the federal time limit and 
potentially disadvantages the family in the long run. States should not 
be restricted in their ability to use TANF funds to help working 
families.
    Over the coming months, there will be much discussion about whether 
the 20% allowable exception under current law provides sufficient 
flexibility to states. On the one hand, a state's ability to provide 
exceptions is effectively greater than 20%, because states are free to 
use state funds, and because the allowable 20% figure is calculated 
based on the entire caseload, including child-only cases. On the other 
hand, caseloads have fallen far more than anticipated in 1996, and 20% 
of the current caseload is a far smaller figure than would have been 
envisioned in 1996. A number of states are reporting that, at least 
initially, they will not approach the 20% allowable exceptions, but 
reauthorization will occur well before there is substantial experience 
with the adequacy of the figure.
    Ultimately, we recommend that each state should have discretion to 
develop its own rules for exceptions to the federal time limit. In the 
TANF structure, no state has any political or fiscal incentive to 
provide assistance to a family for any period longer than necessary to 
provide basic support and to help ensure that families who are able to 
work enter the labor force.
Conclusion
    Thank you for allowing this opportunity to testify. Please let us 
know if we can provide any additional information.

                                

    Chairman Herger. Thank you very much, Mr. Greenberg. Now, 
we will hear from Mr. Michael Fishman, Lewin Group, Falls 
Church, Virginia.
    Mr. Fishman.

  STATEMENT OF MICHAEL E. FISHMAN, SENIOR VICE PRESIDENT AND 
     PRACTICE DIRECTOR, LEWIN GROUP, FALLS CHURCH, VIRGINIA

    Mr. Fishman. Thank you, Mr. Chairman and distinguished 
Members of the Committee. It is a pleasure to be here today. I 
was asked to come today because in 1998, the Department of 
Health and Human Services funded the Lewin Group to gather 
information about the child-only population within both the 
prior AFDC program and the then-new TANF program and our study 
at that time was the first to look comprehensively at the 
trends in the growth of this segment of the welfare caseload 
and it was for the composition of the child-only caseload.
    As you know, under the 1996 welfare reform law, child-only 
cases where only a child or children are receiving assistance 
and not the adult are generally exempt from work requirements 
and time limits. I guess there are four points I would like to 
try to make in the brief time I have today.
    First, as we have heard, while overall welfare caseloads 
have dropped dramatically since 1994, the child-only caseload 
has remained fairly steady in number during that period, and as 
a result, they make up an increasing proportion of the TANF 
caseload, 31 percent in the year 2000 from the Federal data we 
have, and that number ranges anywhere from 14 to 69 percent 
across different States, and that is up from in the 
neighborhood of 10 percent in 1989, so there has clearly been 
growth, and most of the growth in the actual number took place 
in the late 1080s or early 1990s.
    Second, the child-only population is not an homogenous 
population. Cases become child-only under a variety of 
circumstances. These circumstances may be subject to State 
policy choices. Under several sets of circumstances, children 
become child-only cases because their parents who live with 
them do not qualify for TANF assistance, and this represents 
almost two-thirds of the child-only cases that we had 
information on in 1997.
    There are three primary ways that these cases come to be. 
States may remove the adult from the grant if they do not meet 
work requirements or cooperate with child support enforcement 
and they come into a sanction status. This is the case we found 
in California at the time of our study. If the adult is 
removed, it becomes a child-only case. States could also chose, 
however, with sanction policy to reduce the grant or remove the 
family from the grant entirely, in which case you would not 
have a child-only case. Sanction cases represented a little 
under 10 percent of the child-only cases in 1997.
    Children who are U.S. citizens may become child-only cases 
if their parents are not legal aliens or are legal but not 
qualified for TANF, and that represented about 15 percent of 
the child-only cases in 1997.
    And then finally, if parents are in the household, if the 
parents themselves are receiving SSI, then the children can 
still qualify for assistance as child-only cases, and that 
represented about 25 percent of the child-only caseload in 
1997.
    It is also possible for time limits to create child-only 
cases, but at the time that we did our study, we did not see 
any evidence of that.
    Children may also qualify as child-only cases if they 
reside with a non-parental caregiver, usually a relative. A 
little more than a third of the cases that we looked at in 1997 
fell into this category. In the cases we examined, about two-
thirds of the non-parental caregivers were grandparents, most 
of whom were over 50 years of age and many of whom were older 
than that, and the assistance they received helped to offset 
the costs of caring for their child but not themselves. They 
themselves were not included in the assistance unit.
    So we have a heterogeneous population that become child-
only cases for a variety of reasons.
    We also found that States did not think of child-only cases 
as a class. As we talked to State officials, we did not hear 
people saying, well, we have established this policy for child-
only cases. The policies that they had in their States that 
created or affected child-only cases either emanated from their 
overall goals and policies that they had related to welfare 
reform or they created specific policies that affected specific 
classes of cases, be they special programs for kinship and 
relative caregivers, but they did not sit there and say, how do 
we do something with our child-only population as a whole?
    And fourth, the information that we have, and hopefully we 
will have better information, I see GAO has new information for 
us today about the composition of child-only cases, largely 
predated welfare reform and there is reason to believe that 
this composition could have shifted over the last several 
years, but we do not have access to that information right now 
and did not at the time of our study.
    So in conclusion, as you think about future policy related 
to welfare reform, I would recommend that the Committee get the 
most recent information you can on the composition of child-
only cases and focus policy considerations on specific 
subgroups within the child-only caseload rather than focusing 
on the overall size and proportion that the caseload makes up 
of the TANF population. Thank you very much.
    [The prepared statement of Mr. Fishman follows:]
  Statement of Michael E. Fishman, Senior Vice President and Practice 
             Director, Lewin Group, Falls Church, Virginia
    Mr. Chairman and Distinguished Members of the Committee:
    It is an honor to testify before the Committee on Ways and Means, 
Subcommittee on Human Resources on the important topic of child-only 
cases under the Temporary Assistance to Needy Families Program.
    In 1998, the U.S. Department of Health and Human Services (HHS) 
contracted with The Lewin Group to obtain more information about the 
characteristics and trends of the child-only population. The report, 
``Understanding the AFDC/TANF Child-Only Caseload: Policies, 
Composition, and Characteristics in Three States'' published in 
February 2000, describes how federal and state policies affect child-
only caseloads, discusses the national TANF and child-only caseload 
trends, and examines the characteristics of child-only cases. For a 
more in-depth review, the report also focused on three states--
California, Florida, and Missouri--interviewing state and county 
officials and staff, conducting case file reviews in one county in each 
state, and analyzing administrative data. My testimony today draws 
primarily from that report. My co-author, Mary Farrell, provided 
assistance to me in preparing this testimony and is here with me today.
    We have not had an opportunity to update the information we 
collected several years ago on state policies and practices nor have we 
looked recently at local caseload characteristics. In preparing this 
testimony we have reviewed more recent national data and incorporated 
that into our findings. I include state and local information from our 
report in my written testimony because I believe it helps exemplify the 
importance of state demographics and policy choices on the size and 
nature of a state's child-only caseload. However, I will focus my 
remarks on the national picture.
    Under the Personal Responsibility and Work Opportunity 
Reconciliation Act (PRWORA) of 1996, most families receiving Temporary 
Assistance to Needy Families (TANF) are subject to work requirements 
and time limits on benefit receipt. However, one portion of the TANF 
caseload, cases where only a child or children are receiving 
assistance, are generally exempt from these federal requirements. These 
``child-only'' cases are not currently growing in absolute numbers but 
are becoming an increasing proportion of the overall TANF caseload. In 
1998, child-only cases made up 23 percent of the TANF caseload 
nationally, ranging from 10 percent to 47 percent of state caseloads. 
By 1999, their percentage of the TANF caseload had grown to 29%. This 
has led to increasing interest in understanding the characteristics of 
child-only cases and the program services they receive.
    A variety of circumstances result in child-only cases. In some 
cases, the child is not living with a parent, but with a relative, who 
chooses not to be included in the assistance unit or whose income and 
assets preclude him or her from receiving cash assistance. In other 
situations, the child is living with a parent, but the parent is a 
Supplemental Security Income (SSI) recipient, a non-qualified alien, a 
qualified alien who entered the country after August 1996, a sanctioned 
adult, or otherwise excluded.\1\
---------------------------------------------------------------------------
    \1\ For example, adults are ineligible if they have a drug felony 
conviction.
---------------------------------------------------------------------------
I. TANF POLICIES
    State TANF policies affect the number and composition of child-only 
cases; five policies in particular are worth noting:
     Sanction policy. Under federal TANF, states must sanction 
families for refusing to comply with work requirements or not 
cooperating with child support, although states have substantial leeway 
in deciding what constitutes noncompliance, the severity of the 
penalty, and the appeals process which restores benefits.\2\ These 
policies may include removing the parent's benefits from the TANF case 
(which converts the case to child-only), reducing the overall benefit, 
but keeping the adult in the assistance unit, or closing the TANF case.
---------------------------------------------------------------------------
    \2\ Kaplan, J. (1999). The Use of Sanctions Under TANF.Welfare 
Information Network. Washington, DC.
---------------------------------------------------------------------------
     Alien policy. PRWORA distinguishes between ``qualified'' 
aliens, a category which includes permanent residents, refugees, 
asylees, and certain others granted conditional entry, and ``non-
qualified'' aliens, which includes both undocumented aliens and those 
in PRUCOL (permanently residing under color of law) status, among 
others.\3\ In general, the federal block grant does not fund TANF 
benefits for most qualified aliens who entered the country after August 
1996 for five years after entering the country or unqualified aliens. 
However, in both cases, the children may receive assistance if they are 
United States citizens (often because they were born in the United 
States).
---------------------------------------------------------------------------
    \3\ Kramer, F. (1997). Welfare Reform and Immigrants: Recent 
Developments and a Review of Key State Decisions. Welfare Information 
Network. Washington, DC.
---------------------------------------------------------------------------
     Treatment of SSI. Individuals who are aged, blind, or 
disabled and who have little or no income and resources are eligible 
for SSI benefits. In almost all states, the SSI income is excluded when 
calculating TANF benefits and adult SSI recipients may not receive TANF 
assistance for themselves, but can apply for their children.
     Non-parental caregivers. Unlike parents who are caring for 
their children, in most states, non-parental caregivers may choose to 
apply for cash assistance for children under their care and themselves 
or for the children only. Non-parental caregivers are most often 
caregivers related to the children, although some states allow non-
relative caregivers who have legal custody or guardianship to receive 
cash assistance.
     Time limit policy. The federal block grant can be used to 
provide assistance to families that include an adult or teen parent 
head-of-household (or spouse) for up to five cumulative years. Some 
states have indicated that they plan to apply time limits to the 
parents only, which transforms the case to a child-only case at the 
time limit. States may also impose a time limit that is shorter than 
five years.
    In addition, many states are creating alternative programs for 
relative caregivers, offering higher payments than TANF, which may 
result in a shift of cases from TANF into the alternative programs. 
Depending on state financing choices, these cases may or may not be 
counted as TANF child-only cases.\4\
---------------------------------------------------------------------------
    \4\ These alternative state programs, which are discussed for three 
states below, may also be alternatives to foster care for relative 
caregivers. Foster care often requires licensing, home studies, and 
supervision by child welfare agencies, although payments may be higher.
---------------------------------------------------------------------------
II. Summary of Key Findings
A. Nationally, Over Time
    In 1994, when the national AFDC caseload peaked, 5.0 million 
families were receiving cash assistance; in 1999, 2.7 million families 
were on the welfare rolls, a 46 percent decline. The child-only 
caseload did not follow this trend; the number of child-only families 
receiving AFDC/TANF assistance increased steadily throughout the 1990s, 
declining somewhat after 1997. As a result, the TANF caseload consists 
of a growing proportion of child-only cases. This is illustrated in 
Exhibit A.

                               Exhibit A

                 AFDC/TANF Child-Only Cases, 1985-1999

          (Number and Percentage of Total AFDC/TANF Families)
[GRAPHIC] [TIFF OMITTED] T8903E.005

                                 ______
                                 
    These child-only cases can be categorized into parental cases, in 
which the child is living with the parent who is ineligible, and non-
parental cases, in which the child is living with a non-parental 
caregiver who is generally a relative. The parental cases can be 
further categorized into cases in which the parent is ineligible 
because he or she is an SSI recipient, an alien, or has been 
sanctioned.\5\
---------------------------------------------------------------------------
    \5\ A parent may not be on the assistance unit for other reasons, 
although these are less common. For example, adults may be ineligible 
if they have a drug felony conviction.
---------------------------------------------------------------------------
    As Exhibit B shows, the largest growth in child-only cases occurred 
prior to the passage of PRWORA in 1996. Within the child-only caseload, 
both parental and non-parental caregiver cases increased, although the 
parental cases increased at a greater rate than non-parental cases from 
the late 1980s to early 1990s. Specifically, non-parental cases grew 
from approximately 206,000 to 321,000 between 1988 and 1994, a 56 
percent increase, while parental child-only cases grew from about 
162,000 to 501,000, an increase of 209 percent, during the same period.

                               Exhibit B

    Number of AFDC/TANF Child-Only Cases by Type of Child-Only Case

                             (in thousands)
[GRAPHIC] [TIFF OMITTED] T8903G.007

    Source: AFDC QC Data. Department of Health and Human Services, 
Administration for Children and Families, Office of Planning, Research, 
and Evaluation.
                                 ______
                                 
    There are several explanations offered for the growth in child-only 
cases during this period:
           An increase in sanctions for non-compliance with 
        program requirements. The Family Support Act (FSA) of 1988 
        required non-exempt AFDC recipients to participate in job 
        search, work experience, or education and training activities 
        or be sanctioned. States sanctioned cases by removing the 
        parent from the assistance unit, converting regular AFDC cases 
        to child-only cases.
           An increase in the number of individuals eligible 
        for SSI. Congress enacted a series of legislation reforms in 
        the mid-eighties and early-nineties that significantly expanded 
        the scope of the SSI program. The biggest change was the 
        enactment of the 1984 Disability Reform Act that significantly 
        expanded eligibility, particularly for those with mental 
        impairments.
           An increase in the number of non-qualified aliens. 
        The Immigration Reform and Control Act of 1986 (IRCA) allowed 
        formerly illegal immigrants to attain legal status, although it 
        barred them from receiving AFDC for the first five years after 
        their legalization. It is possible that the new legal status of 
        the parents increased the likelihood that they would seek 
        benefits for their citizen children. In addition, IRCA 
        instituted employer sanctions for knowingly hiring illegal 
        aliens, perhaps putting more non-qualified aliens in need of 
        cash assistance for their families. Finally, illegal aliens 
        living in the U.S. began growing by about 200,000 to 300,000 
        each year starting in 1989, after IRCA initially reduced the 
        number of non-qualified aliens.\6\
---------------------------------------------------------------------------
    \6\ Fix, M. and J. Passel (1994). Immigration and Immigrants 
Setting the Record Straight. Urban Institute. Washington, DC.
---------------------------------------------------------------------------
           An increase in non-parental caregivers. Current 
        Population Survey data show an increase of kinship care between 
        1983 and 1993.\7\ This growth in relative caregivers may have 
        increased the number of TANF children living with relatives and 
        receiving assistance on child-only cases.
---------------------------------------------------------------------------
    \7\ Harden, A.W., and R.L. Clark (1997). Informal and Formal 
Kinship Care. Report prepared for HHS, ASPE, Washington, DC.
---------------------------------------------------------------------------
B. Child-Only Policy and Practices in Three States
    Our study examined in more detail the policies and practices in 
California, Florida, and Missouri. These states were selected, in part, 
because they offer a range of policies that could influence the size 
and composition of child-only cases.
           All three states sanctioned cases for failure to 
        meet work requirements, although the penalty for noncompliance 
        varies; the policy changes directly affect child-only 
        caseloads.
    California removed the adult from the assistance unit, converting 
regular TANF cases to child-only cases, while Missouri kept the adult 
in the assistance unit, but reduced the overall benefit by 25 percent. 
Florida's policy in effect the summer of 1999 closed the TANF case for 
the first incident of noncompliance and closed the TANF and food stamp 
case for second and third incidents. However, for the second and third 
sanctions, parents could apply for assistance for their children 
through a protective payee (a third party agreeing to accept the check 
on the children's behalf) making the case child-only.\8\
---------------------------------------------------------------------------
    \8\ In December 1999, Florida changed their sanction policy, 
closing the food stamp case for the first incident if the adult does 
not receive a food stamp exemption. Other members of the household may 
apply for food stamps after one month. For second and third sanctions, 
if the adult does not receive a food stamp exemption, the case is 
closed, although the other members may apply for food stamps after 
three months and six months, respectively. As was the case under the 
previous policy, protective payees may be assigned after the second and 
third sanctions.
---------------------------------------------------------------------------
           The time limits will affect child-only caseloads 
        differently in each of the three states.
    Only in California will cases be automatically converted to child-
only cases when adults begin reaching the time limit in January 2003. 
In Florida, where some welfare recipients have reached the time limit, 
cases become child-only when the state assesses that the children are 
at risk of entering foster care and assigns a protective payee. This 
had occurred in relatively few instances. In Missouri, cases will be 
closed at the time limit; welfare recipients will begin reaching the 
time limit in June 2002. Pertinent to all states, if time limits 
produce severe financial hardship, resulting in more children living 
with relatives, child-only caseloads could increase.
           California and Missouri used state funds to provide 
        assistance to qualified aliens who entered the country after 
        August 1996; Florida did not.
    As discussed above, federal TANF funds cannot be used to provide 
assistance to qualified aliens entering the country after the passage 
of PRWORA until they have resided in the country for five years. 
However, California and Missouri continued to provide assistance using 
state funds.
           With the exception of sanctioned cases in Florida 
        and Missouri, child-only cases are not subject to time limits, 
        nor are child-only caregivers required to work or participate 
        in employment-related activities.
    Child-only cases have not declined as rapidly as regular TANF 
cases, in part, because these cases are subject to fewer work 
requirements. Children are assisted until they reach age 18, assuming 
children have little income and resources.
           As a condition of receiving TANF benefits, parents 
        must assign child support rights to the state. In California, 
        Florida, and Missouri, this applied to relative caregivers as 
        well.
    In all three states, relative caregivers must cooperate with the 
state by supplying information on each parent absent from the home, 
which is forwarded to the state child support agency. In addition, the 
states required that relative caregivers also assign child support 
benefits over to the state. The child support agency pursues the absent 
parent to establish a support order, if none is in place, or to enforce 
an existing order.
           The three states were creating alternative programs 
        for relative caregivers that offer higher payments than their 
        TANF programs with additional requirements for eligibility. 
        Relative to foster care, these programs generally have less 
        stringent licensing requirements.
    Newly created relative caregiver programs in all three states 
offered higher payments than TANF, required legal guardianship or court 
supervision of the child, and required some level of background review, 
licensing, and/or training for the caregiver, although requirements are 
generally less stringent than foster care requirements. States were 
using some combination of TANF, maintenance-of-effort (MOE), and state 
and local funding to support these programs.\9\
---------------------------------------------------------------------------
    \9\ MOE dollars are expenditures states must make from their own 
funds as a condition of receiving the TANF block grant.
---------------------------------------------------------------------------
    Besides the creation of these alternative programs, no special 
plans were being made to serve the child-only cases within the scope of 
the regular TANF program in the counties visited. While these cases 
make up an increasing proportion of the TANF caseload, child-only cases 
are perceived as easier to work than regular cases.
C. Child-Only Caseload in Three Counties
    A case file data collection effort was conducted in three 
counties--Alameda County (Oakland), California, Duval County 
(Jacksonville), Florida, and Jackson County (Kansas City), Missouri--to 
document the characteristics of child-only cases. Data were collected 
from 761 child-only case files that were open in May 1999. The key 
findings include the following:
    Non-parential caregiver cases comprise two-thirds of child-only 
cases in Jackson and Duval counties while most of the remaining cases 
are due to parental receipt of SSI; the Alameda County caseload is more 
evenly divided among non-parental caregiver, SSI, alien, and sanctioned 
cases (see Exhibit C).

                               Exhibit C

        Composition of the Child-Only Caseload in Three Counties
[GRAPHIC] [TIFF OMITTED] T8903F.006

    Source: Lewin Case File Review, 1999.
                                 ______
                                 
    Due to differences in demographics and state TANF policies, Alameda 
County's child-only caseload is more diverse than Duval and Jackson 
county caseloads. Specifically, more aliens reside in Alameda than in 
Duval and Jackson and, unlike the other two counties, the vast majority 
of cases sanctioned result in child-only cases.
           Among the non-parental cases, the reasons children 
        come to reside with non-parental caregivers vary widely. Major 
        reasons include desertion, substance abuse, incarceration, 
        child abuse, and neglect on the part of the parent.
    Desertion was a common reason children came to reside with non-
parental caregivers, accounting for between 26 and 41 percent of the 
cases in the three counties. Substance abuse by a parent led to a non-
parental caregiver arrangement for over one-quarter of the cases in 
Duval. It is important to note that these reasons may be subjective and 
are generally not mutually exclusive as the child often came to reside 
with the caregiver for a combination of related reasons. In addition, 
the welfare offices differed in terms of how they categorized the 
circumstances surrounding these cases.
           Caregivers of child-only cases are substantially 
        older than adults on regular TANF cases; within the child-only 
        caseload, non-parental caregivers are substantially older than 
        parental caregivers.
    The average age of a regular TANF payee is about 30 in Duval and 
Jackson counties, while child-only caregivers are approximately 44 
years of age, on average.\10\ Within the child-only caseload in 
Alameda, Duval, and Jackson counties, parental caregivers average 34 
years of age and non-parental caregivers have an average age of 53.\11\ 
This discrepancy is largely due to the fact that grandparents are 
caregivers of two-thirds of the non-parental caregiver cases. Also, it 
is not uncommon for great-grandparents to be caregivers. As a result, 
about 60 percent of non-parental caregivers are over the age of 50 and 
almost 10 percent are over age 70. Among parental child-only cases, SSI 
recipients tend to be older.
---------------------------------------------------------------------------
    \10\ These figures are calculated using county administrative data 
from Duval County and Jackson County.
    \11\ Calculated from Lewin case file data for Alameda, Duval, and 
Jackson counties.
---------------------------------------------------------------------------
           Non-parental cases have higher total income than 
        parental child-only cases.
    Non-parental caregivers have higher total income, defined as income 
from cash assistance, food stamps, and other sources, including 
earnings, SSI, and pensions. This is true despite the fact that in all 
counties, non-parental caregivers are less likely to receive food 
stamps and in Duval and Jackson counties, they are less likely to 
receive SSI. As compared to parental caregivers, non-parental 
caregivers receive a larger portion of their income from sources other 
than TANF or food stamps.
    It should be noted that this discussion reflects only income that 
is reported on the TANF and food stamp applications. While income 
information was requested and often entered on the application, this 
information was not required of non-parental caregivers who were not 
receiving food stamps, although was required on food stamp 
applications. Therefore, this is an underestimate of non-parental 
caregivers' total income.
III. Implications for Work Requirements and Time Limits
    It is important for the Committee to understand that a significant 
and growing proportion of the TANF caseload is not generally subject to 
work requirements or time limits. For child-only cases where the parent 
resides in the household, the adult may have been removed from the 
grant due to sanctions or time limits and the child or children may 
continue to receive assistance. The adult may also be ineligible for 
assistance due to receipt of SSI or due to their alien status.
    A significant proportion of child-only cases is composed of non-
parental caregivers, usually relatives, who seek assistance only for 
the needs of the child or children in their care. In this circumstance, 
neither their income nor their needs are considered in determining the 
child's eligibility or benefit level. These caregivers are not 
generally subject to work requirements nor is the assistance they 
receive on behalf of the children in their care subject to time limits.
    States have significant discretion in establishing policies that 
affect both the number and nature of child-only cases in their states. 
These decisions are often embedded in the broader context of decisions 
states make about the overall goals, philosophy and approach of their 
TANF program. In fact, our study revealed that states do not generally 
think about their ``child-only'' caseload as a whole, but rather focus 
on the type of child-only case. Given the diversity of circumstances 
that create child-only cases, it is probably wise for national policy 
makers to follow suit.
    It is important to keep in mind that this study was conducted in 
1999, and is based on AFDC quality control data available through 1997. 
Since then, states have made substantial changes to their TANF programs 
in response to the 1996 welfare reform legislation. For example, more 
states are implementing sanction policies that reduce the grant size, 
but keep the adults in the assistance unit, or close the case 
completely. Thus, we might see a reduction in the number of cases that 
are child-only due to sanction status. In addition, as mentioned above, 
PRWORA banned the use of the federal block grant for most qualified 
aliens who entered the country after August 1996. We might see an 
increase in the share of cases that are child-only due to alien status 
because the adults are not allowed to receive assistance, but their 
children are, if born in the United States. At the time of our study, 
few families had reached time limits and we did not observe the 
conversion of adult-headed cases to child-only cases. Finally, there 
has been substantial growth in the number of special kinship care 
programs, which may also be having an effect on the size and 
composition of the TANF child-only caseload.
    I would like to close by emphasizing again that while it is 
convenient to discuss the TANF child-only caseload as a single class of 
cases, these cases are composed of families in a diverse set of 
circumstances. As the Committee considers future policy options with 
regard to child-only cases, they would be wise to focus on specific 
types of child-only cases and seek the most up-to-date information on 
their participation in TANF.

                                

    Chairman Herger. Thank you very much, Mr. Fishman. Now, we 
will hear from Douglas Besharov, Professor, School of Public 
Affairs, University of Maryland, College Park Maryland.
    Mr. Besharov.

  STATEMENT OF DOUGLAS J. BESHAROV, PROFESSOR, UNIVERSITY OF 
MARYLAND SCHOOL OF PUBLIC AFFAIRS, COLLEGE PARK, MARYLAND, AND 
 RESIDENT SCHOLAR, PUBLIC POLICY RESEARCH, AMERICAN ENTERPRISE 
                           INSTITUTE

    Mr. Besharov. Mr. Herger and Members of the Committee, 
thank you very much for having me here. This has been quite a 
hearing in that, in the debate or the discussion about welfare 
reform, it sometimes feels as if there is a fog here. I think 
the general public thinks that welfare reform was about 
mandatory work for welfare recipients. In my testimony, I cite 
some polls about this and that is what most of the rhetoric 
about welfare reform is about.
    In my prepared testimony, on page 11, is Table 1-A, which 
was prepared with the help of my colleague, Marie Cohn. It lays 
out the numbers, which are common to all the testimony and 
these are Federal numbers, of all TANF adult recipients, so I 
am leaving out the child-only cases. Sixty percent of them are 
not in countable activities, countable by the definition of 
TANF. Forty percent are. That is the number that tends to get 
used. Forty percent are doing work-related activities.
    That is true, but more than half of that number, about 65 
percent, are families that are on welfare and working pursuant 
to an earnings disregard. Now, that is work. I believe in it, 
and there are some very good things about it. The government 
calls that an unsubsidized job. I call that a subsidized job 
because they are still on welfare.
    None of the proposals that we have before us addresses that 
very complicated factor, and I will come back to it in a 
minute.
    If you look at this table, about 4 percent of the national 
caseload is involved in mandatory work. I did not say 40, I did 
not say 14, I said 4, and about two-thirds of that number are 
represented in this room, which is to say Ohio, Wisconsin, and 
New York, because I see Jason Tenner in the room. If you take 
those three locations, and New Jersey, out of this number, you 
have hardly anyone in this nation in mandatory work under TANF. 
I will say that again. You have hardly anyone in mandatory work 
under TANF.
    Now, this table leaves out the other thing that you have 
heard about today, and that is not deliberate, it is that there 
is no data on the subject, and that is the work-related 
activities that are funded with State-only funds. There are 
State programs that provide work-related activities. You heard 
only part of what those activities are. Yes, some of them are 
training, some of them are education, but some of them include 
taking care of your own child. Some States give people 2 days' 
credit of work for going to sign up their kids for Head Start. 
There are some problems at the State level as well as the 
national level.
    We were asked here to talk about what we think should 
happen to the welfare bill, and specifically about time limits 
and work requirements. Let me start by saying I have a 
tremendous problem in answering that question because, to me, 
TANF is the Abe Lincoln of Federal legislation. I will say that 
again. It is the Abe Lincoln of Federal legislation, which is 
to say every individual part of TANF is ugly as can be. The 
nose stinks. The caseload reduction credit stinks. The absence 
of a rainy day fund stinks. The fact the block grant does not 
vary this way and that, every part of it stinks.
    You can take a look and say, Abe needs a nose job, he needs 
his chin fixed, or he could wear a beard the way I do--he did--
and so forth. But the fact is, put together, this ugly 
combination of provisions has given the States the flexibility 
to do the things you have heard about today and you see in 
these studies.
    The problem in addressing any specific provision is it is 
part of a whole. So I might not like the caseload reduction 
credit, but I look at the two fixes that have been proposed. 
One fix, from my friends on the right, says only count 
recipients who have left welfare for work. Well, over 40 
percent of the people who leave welfare do not leave for work. 
They leave for marriage, cohabition, co-residency, SSI, or 
other sources of support. Now, we will not talk about SSI. 
Maybe we should not count them. But I thought we should be 
happy when people leave welfare because they get married, and I 
am not talking here about a Federal program to encourage it. 
These are people who have left, and to deny a State credit for 
that is, I think, the wrong idea.
    Now, the Administration has done the same thing on the 
caseload reduction credit, which is to say it has got this 3-
month rule. The problem with that is it does not reflect entry 
effects. You have heard that AFDC's reduction is largely 
because when people come in, they are encouraged to get a job. 
Neither Mark's proposal, the class proposal, and I think the 
Democratic proposal, nor the Administration's proposal, fits 
this need.
    I could go through all this, but my little red light is on. 
All I say is, remember Abe Lincoln. Give him a beard but do not 
change the face. [Laughter.]
    [The prepared statement of Mr. Besharov follows:]
  Statement of Douglas J. Besharov, Professor, University of Maryland 
School of Public Affairs, and Resident Scholar, Public Policy Research, 
                     American Enterprise Institute
    Chairman Herger, and Members of the Subcommittee on Human 
Resources:
    Thank you for inviting me to testify on state implementation of 
work requirements and time limits under the Personal Responsibility and 
Work Opportunity Reconciliation Act of 1996. My name is Douglas J. 
Besharov. I am a resident scholar at the American Enterprise Institute 
for Public Policy Research, where I conduct research on children and 
families. I am also a professor at the University of Maryland School of 
Public Affairs, where I teach courses on family policy, welfare reform, 
and evaluation.
    Ask people on the street what ``welfare reform'' means, and most 
would probably answer ``work in return for welfare.'' According to Kent 
Weaver, a senior fellow at the Brookings Institution, public opinion 
polls conducted between 1993 and 1995, on the eve of welfare reform, 
revealed that ``The clear public favorite among welfare reforms is work 
requirements, which is consistent with the new paternalism approach to 
reform.'' 1 Lawrence Mead of New York University explains: 
``public opinion polls show that while voters want the government to 
assist needy families, they also want adult welfare recipients to work, 
like the taxpayers who support them.'' 2
---------------------------------------------------------------------------
    \1\ R. Kent Weaver, Ending Welfare As We Know It (Washington, D.C.: 
Brookings Institution Press, 2000), p. 181.
    \2\ Lawrence M. Mead, ``The Politics of Conservative Welfare 
Reform,'' in The New World of Welfare, edited by Rebecca M. Blank and 
Ron Haskins (Washington, D.C.: Brookings Press, 2001), p. 203.
---------------------------------------------------------------------------
    When the Temporary Assistance for Needy Families program (TANF) was 
enacted, most analysts expected states to develop large mandatory work 
programs in order to meet its mandatory ``participation'' requirements. 
TANF requires states to place an increasing percentage of adults on 
welfare in work activities. It establishes two separate ``work 
participation rates'': (1) an ``all-family'' or overall rate, and (2) a 
rate for two-parent families (which is higher than the rate for one-
parent families because it is considered easier for one parent in a 
two-parent household to work than it is for a single mother).

          1. The all-family rate (or overall rate) requires that at 
        least 25 percent of TANF families with an adult (or minor child 
        head of household) be involved for 1997, 30 percent for 1998, 
        35 percent for 1999, 40 percent for 2000, 45 percent for 2001, 
        and culminating at 50 percent for 2002 and 
        thereafter.3 In order to be counted as 
        participating, adults in one-parent families must have been 
        engaged in work activities for at least twenty hours per week 
        in 1997 and 1998, twenty-five hours in 1999, and thirty 
        thereafter.4 (Single parents with a child under six 
        need only participate twenty hours per week to be counted.)
---------------------------------------------------------------------------
    \3\ TANF's ``participation rates'' are computed as an average of 
the state's participation rates for each month of the fiscal year.
    \4\ Personal Responsibility and Work Opportunity Reconciliation 
Act, Section 407(c)(1)(A).
---------------------------------------------------------------------------
          2. The two-parent family rate is higher (presumably because 
        there are two parents available to care for the children): 75 
        percent for 1997 and 1998, and 90 percent thereafter. The 
        number of required hours is also higher: In two-parent 
        families, the parents must have been engaged in activities for 
        at least thirty-five hours per week. (The parents can share the 
        hours.) 5
---------------------------------------------------------------------------
    \5\ Personal Responsibility and Work Opportunity Reconciliation 
Act, Section 407(c)(1)(B).

    States that do not meet these participation rates are subject to a 
financial penalty.6
---------------------------------------------------------------------------
    \6\ U.S. Department of Health and Human Services, Temporary 
Assistance for Needy Families Final Rule 45 CFR 261.20(d), Federal 
Register, April 12, 1999, p. 17885.
---------------------------------------------------------------------------
    TANF also requires states to reduce or end assistance to people who 
refuse to engage in such work activities without good 
cause.7
---------------------------------------------------------------------------
    \7\ Personal Responsibility and Work Opportunity Reconciliation 
Act, Section 407(e).
---------------------------------------------------------------------------
    These ``participation standards,'' however, have turned out to have 
little meaning because of the way the participation rates are 
calculated and because they can be satisfied by recipients combining 
welfare with work (``combiners'').
    Caseload reduction credit. What if a state successfully moves a 
substantial number of recipients from welfare to work? On the theory 
that it would be unfair to ignore this achievement, the required 
participation rates are reduced by the ``caseload reduction credit.'' 
The credit reduces the state's required participation rate by one 
percentage point for each percentage point that the state's welfare 
caseload falls below the 1995 level. (Caseload reductions due to 
eligibility changes, such as full family sanctions, cannot be counted 
in measuring the caseload decline.)8 Significantly, thus 
recognizing ``entry effects'' gives states an incentive to invest 
resources and time in helping applicants avoid welfare through various 
diversion activities and keeping leavers from returning by offering 
child care and post-employment services.
---------------------------------------------------------------------------
    \8\ Some eligibility changes, such as expansions in earnings 
disregards, actually increase caseloads. States are required to 
identify each eligibility change, estimate its effect on the caseload, 
and then adjust the caseload by the net effect of all the changes. See 
U.S. Department of Health and Human Services, Administration for 
Children and Families, Office of Family Assistance, ``Guidance on 
Submitting Caseload Reduction Credit Information, the TANF Caseload 
Reduction Report (Form ACF-202) and Instructions,'' November 5, 1999, 
available from: http://www.acf.dhhs.gov/programs/ofa/pa99-2.htm, 
accessed February 8, 2002.
---------------------------------------------------------------------------
    The caseload reduction credit was established in relation to 1995 
welfare caseloads and, because of the sharp decline in the rolls since 
then, it has all but eliminated the need for states to establish 
mandatory work programs.
    For the all-families participation rate, in 2000, thirty-one states 
did not have to place anyone in a work activity because their caseload 
declines were so large. In other words their ``adjusted'' participation 
rate was zero. Eleven states had ``adjusted'' all-families 
participation rates of under 10 percent.9 Moreover, these 
participation rates are so low that they are easily satisfied because 
recipients combining work and welfare (pursuant to earnings disregards) 
count toward the participation rate. As a result, in 2000, all states 
and the District of Columbia met the all-families participation 
requirement.
---------------------------------------------------------------------------
    \9\ U.S. Department of Health and Human Services, Administration 
for Children and Families, Table 1A, ``Temporary Assistance for Needy 
Families: TANF Work Participation Rates, Fiscal Year 2000,'' available 
from: http://www.acf.dhhs.gov/programs/opre/particip/im00rate/
table1a.htm, accessed March 4, 2002.
---------------------------------------------------------------------------
    Meeting the two-parent participation requirements has been more 
difficult for the states-even though the number of such cases has 
plummeted nationally 10 (from about 363,000 in 1994 to just 
56,000 in 2000, an 85 percent drop) 11--because both the 
participation rate and minimum hours of participation are higher. 
Nationally, in 2000, only about 40 or 50 percent of two-parent cases 
(with enormous variations among the states) were participating for a 
sufficient number of hours to meet the two-parent work 
requirement.12 However, with the help of the caseload 
reduction credit, twenty-five states and the District of Columbia met 
or exceeded their adjusted two-parent work participation 
rates.13
---------------------------------------------------------------------------
    \10\ Part of this decline was caused by the shift, in some states, 
of two-parent cases to separate state programs.
    \11\ U.S. Department of Health and Human Services, Administration 
for Children and Families, Indicators of Welfare Dependence: Annual 
Report to Congress 2001 (Washington, D.C.: Author, 2001), p. A-8, and 
U.S. Department of Health and Human Services, Administration for 
Children and Families, Table 3A, ``Temporary Assistance for Needy 
Families: Average Monthly Number of Parents in Two-Parent Families Who 
Are Participating in Work Activities for a Sufficient Number of Hours 
for the Family to Count as Meeting the Two-Parent Families Work 
Requirements, Fiscal Year 2000,'' available from: http://
www.acf.dhhs.gov/programs/opre/particip/im00rate/table5a.htm, accessed 
March 5, 2002.
    \12\ U.S. Department of Health and Human Services, Administration 
for Children and Families, Table 5B, ``Average Monthly Percent of 
Parents in Two-Parent Families Who Are Participating in Work Activities 
for a Sufficient Number of Hours for the Family to Count as Meeting the 
Two-Parent Families Work Requirements, Fiscal Year 2000,'' available 
from: http://www.acf.dhhs.gov/programs/opre/particip/im00rate/
table5b.htm, accessed March 4, 2002.
    \13\ U.S. Department of Health and Human Services, Administration 
for Children and Families, Table 1A, ``Temporary Assistance for Needy 
Families: TANF Work Participation Rates, Fiscal Year 2000,'' available 
from: http://www.acf.dhhs.gov/programs/opre/particip/im00rate/
table1a.htm, accessed March 4, 2002.
---------------------------------------------------------------------------
    Only seven states did not meet their adjusted two-parent 
participation rate.14 In earlier years, some of these states 
entered into corrective compliance plans with the federal government, 
and a few states have simply paid the penalty for not meeting their 
two-parent participation rates. (The penalties tend to be small because 
they are based on the proportion of two-parent cases in the state, 
which is generally small.) 15
---------------------------------------------------------------------------
    \14\ U.S. Department of Health and Human Services, Administration 
for Children and Families, Table 1A, ``Temporary Assistance for Needy 
Families: TANF Work Participation Rates, Fiscal Year 2000,'' available 
from: http://www.acf.dhhs.gov/programs/opre/particip/im00rate/
table1a.htm, accessed March 4, 2002.
    \15\ Personal communication from Mack Storrs, Senior Policy 
Analyst, Office of Family Assistance, Administration for Children and 
Families, to Peter Germanis, January 9, 2002.
---------------------------------------------------------------------------
    But the major reason so few states were not out of compliance is 
that eighteen or more had, in effect, exempted themselves from the 
requirement by creating a separate state program for all or some of 
their two-parent families (or not having a program at all), up from 
fifteen states in 1999.16 These separate state-funded 
programs are not subject to the work requirement (or other TANF 
provisions such as the five-year time limit).
---------------------------------------------------------------------------
    \16\ Indeed, in Rhode Island, if a family meets the two-parent 
participation rate, then federal funds are used and they are included 
in the rate. If not, the family receives assistance from a separate 
state program. (One HHS official observed, ``Obviously, they aren't 
perfect at this game, since their two-parent rate was 95.8 percent-not 
100 percent).'' (This compares to a 6.8 percent participation rate in 
their separate state program.) As far as we know, Rhode Island is the 
only state doing this now, but others have discussed adopting the 
strategy, and more are likely to if participation requirements become 
more stringent.
---------------------------------------------------------------------------
    The growing proportion of the caseload composed of ``child-only'' 
cases is also watering down participation requirements. For, there is 
no work requirement imposed on families that do not have an adult 
parent receiving aid, even if the parent is living in the same 
household as the child. In 1997, 23 percent of the national TANF 
caseload was thus exempt from a work requirement for this 
reason.17 By 2000, the figure was up to 32 
percent.18 Some of these child-only cases involve children 
placed with relatives (``kinship care'') because their parents cannot 
care for them.19 Some involve immigrant families, where the 
adult immigrant is not eligible for benefits but their native born 
children are. Some involve situations where the parent is receiving SSI 
and is not included as part of the TANF grant (while the child is). And 
some involve families in which the adult has been sanctioned for some 
reason and is, therefore, off the grant.
---------------------------------------------------------------------------
    \17\ U.S. Department of Health and Human Services, Office of the 
Assistant Secretary for Planning and Evaluation, Understanding the 
AFDC/TANF Child-only Caseload: Policies, Composition and 
Characteristics in Three States (Washington, D.C.: Author, February 1, 
2000), p. 7.
    \18\ U.S. Department of Health and Human Services, Administration 
for Children and Families, Table 3A, ``Temporary Assistance for Needy 
Families: Status of Families as Relates to All Families Work 
Participation Rates,'' Fiscal Year 2000,'' available from: http://
www.acf.dhhs.gov/programs/opre/particip/im00rate/table3a.htm, accessed 
March 4, 2002. Despite the increase in the proportion of the caseload 
composed of child-only cases, the total number of such cases actually 
declined from 822,000 to 719,000.
    \19\ These are assistance cases under TANF. However, it is also 
possible for states to shift these cases to their child welfare 
programs, and relabel them ``kinship foster care'' cases. See Douglas 
J. Besharov, ``The Welfare Balloon: Squeeze Hard on One Side and the 
Other Side Will Just Expand,'' The Washington Post, June 11, 1995, p.C4
---------------------------------------------------------------------------
    Actual participation. Despite initial expectations, therefore, 
participation in the activities counted toward the TANF participation 
requirements (``countable work-related activities'') has been quite 
limited. In an average month in 2000 (the most recent year with data), 
only 40 percent of adult TANF recipients participated in a countable 
activity.20 And, even that is a misleading statistic, 
because about 61 percent of those participating are simply combining 
work and welfare (in large part because of the newly generous earnings 
disregards described above). TANF calls this ``unsubsidized 
employment,'' but that clearly is a misnomer since the families 
continue to receive welfare payments, which can be a substantial 
portion of their original grants. First the Clinton Administration and 
now the Bush Administration have helped muddy the waters by repeatedly 
reporting that large percentages of welfare recipients were 
``working,'' when, in fact, the vast majority were taking advantage of 
earnings disregards to combine work and welfare.21
---------------------------------------------------------------------------
    \20\ U.S. Department of Health and Human Services, Administration 
for Children and Families, Table 6A, ``Temporary Assistance for Needy 
Families: Average Hours of Participation in Work Activities, Including 
Waivers, For All Adults Participating in Work Activities, Fiscal Year 
2000,'' available from: http://www.acf.dhhs.gov/programs/opre/particip/
im00rate/table6a.htm, accessed March 4, 2002.
    \21\ See, e.g., U.S. Department of Health and Human Services, 
``States Continue to Meet Welfare Reform's Work Participation Rules,'' 
Press Release, February 14, 2002, available from: http://www.hhs.gov/
news/press/2002pres/20020214.html, accessed March 4, 2002.
---------------------------------------------------------------------------
    In fact, in 2000, only somewhere between 16 to 23 percent of all 
adult recipients were participating in activities other than 
``unsubsidized'' employment,22 and only about 4 percent were 
in ``work experience.'' Most of the rest of those not combining work 
and welfare were either in job search (5 percent) or vocational 
education (3 percent).23 (See Tables 1 and 1A.)
---------------------------------------------------------------------------
    \22\ The range for this category reflects the fact that there may 
be recipients participating in more than one activity, so that it is 
not possible to estimate precisely the number of adults in countable 
activities other than ``unsubsidized employment.''
    \23\ U.S. Department of Health and Human Services, Administration 
for Children and Families, Table 6A, ``Temporary Assistance for Needy 
Families: Average Hours of Participation in Work Activities, Including 
Waivers, For All Adults Participating in Work Activities, Fiscal Year 
2000,'' available from: http://www.acf.dhhs.gov/programs/opre/particip/
im00rate/table6a.htm, accessed March 4, 2002.
---------------------------------------------------------------------------
    Importantly, four states--New Jersey, New York, Ohio, and 
Wisconsin-accounted for over 60 percent of the participants in work 
experience programs (37,971 out of a national total of 
61,643).24 In these states, the percentage of adults in work 
experience ranged from 6 percent in New York to 57 percent in 
Wisconsin. (See Tables 2 and 2A.)
---------------------------------------------------------------------------
    \24\ U.S. Department of Health and Human Services, Administration 
for Children and Families, Table 6A, ``Temporary Assistance for Needy 
Families: Average Hours of Participation in Work Activities, Including 
Waivers, For All Adults Participating in Work Activities, Fiscal Year 
2000,'' available from: http://www.acf.dhhs.gov/programs/opre/particip/
im00rate/table6a.htm, accessed March 4, 2002.
---------------------------------------------------------------------------
    Because most states have had no trouble meeting the all-family 
participation rate--and because they have unspent TANF funds resulting 
from the decline in their caseloads--many states have also funded 
activities and services that may not count toward TANF participation 
requirements. Sometimes they mandate participation in them. These 
services include substance abuse treatment, skills assessment, mental 
health services, domestic abuse services, or adult literacy. Sometimes 
these services are provided in conjunction with some form of work 
experience or subsidized employment, and sometimes not.
    Such activities are presently not countable toward participation 
requirements. If they were, they would have added appreciably to the 
number of recipients in countable activities. (In 2000, they accounted 
for as much as 15 percent of total participation.)25 In New 
York City, for example, in November 2001, adding the participants in 
normally noncountable activities would increase the number 
participating there by 7,683 (18 percent). The number of participants 
would rise from 43,669 to 51,352 (with 1,281 in substance abuse 
treatment, 1,831 in wellness/rehab, and 4,571 who are ``needed at 
home'' to care for a dependent).26
---------------------------------------------------------------------------
    \25\ In fact, given the wide flexibility states have in defining 
their activities, participation in many of these activities could be 
classified under ``community service,'' a countable activity for TANF 
participation requirements.
    \26\ New York City Human Resources Administration, ``FA/TANF--
November 19, 2001--Weekly Report.''
---------------------------------------------------------------------------
    A word of warning about these statistics: In conversations with 
state and county officials, it was clear that many had very poor data 
on the numbers of participants in various activities, and discrepancies 
in some states' data suggest significant inaccuracies. Moreover, the 
data seems to have little meaning or utility to state officials, and 
many seem to make little use of the data that they have.

 TABLE 1. AVERAGE MONTHLY PARTICIPATION IN WORK ACTIVITIES BY ADULT TANF
                      RECIPIENTS, FISCAL YEAR 1999
                                      Number of Adult     Percent of all
               Group                    Recipients      Adult Recipients
 Adult TANF recipients a...........          2,112,143                100
Adult recipients not participating          1,226,679                 58
 in any work-related activity.....
Adult recipients participating in             885,464                 42
 one or more work-related
 activities b.....................
Recipients in unsubsidized                    585,396                 28
 employment c.....................
Recipients in other work-related      300,068-381,766              14-18
 activities d.....................
Job search and job readiness                  125,244                  6
 assistance.......................
Work experience...................             78,225                  4
Vocational education..............             63,730                  3
Community service.................             31,273                  1
Satisfactory school attendance....             30,394                  1
Job skills training...............             19,732                  1
Education related to employment...             17,079                  1
On-the-job training...............              7,140                 a Includes minor heads of household.
b Not all of these adults were counted toward TANF work participation
  rates because not all of them had enough hours of participation to be
  counted.
c Includes recipients who are employed part-time or full-time and are
  still eligible for TANF, often because they live in states that
  ``disregard'' (do not count) a certain amount or proportion of earned
  income in the calculation of welfare eligibility and benefits.
d The range for this category reflects the fact that there may be people
  who were in more than one activity, including unsubsidized employment.
  If none of the recipients in other work-related activities were also
  employed, then there would be 300,068 adult recipients in these
  activities; if some of them were also employed, then there could be as
  many as 381,766 in other work-related activities.
Source: U.S. Department of Health and Human Services, Administration for
  Children and Families, Temporary Assistance for Needy Families
  Program: Third Annual Report to Congress (Washington, D.C.: U.S.
  Department of Health and Human Services, August, 2000), pp. 48-49,
  available from: http://www.acf.dhhs.gov/programs/opre/annual3.pdf,
  accessed September 19, 2001.

                                 ______
                                 

TABLE 1A. AVERAGE MONTHLY PARTICIPATION IN WORK ACTIVITIES BY TANF ADULT
                      RECIPIENTS, FISCAL YEAR 2000
                                      Number of Adult     Percent of all
               Group                    Recipients      Adult Recipients
 Adult TANF recipients a...........          1,588,651                100
Adult recipients not participating            957,519                 60
 in any work-related activity.....
Adult recipients participating in             631,132                 40
 one or more work-related
 activities b.....................
Recipients in unsubsidized                    382,604                 24
 employment c.....................
Recipients in other work-related      248,528-363,881              16-23
 activities d.....................
Job search and job readiness                   78,737                  5
 assistance.......................
Work experience...................             61,643                  4
Vocational education..............             54,692                  3
Community service.................             40,852                  3
Satisfactory school attendance....             25,116                  2
Job skills training...............             17,104                  1
Education related to employment...             17,012                  1
On-the-job training...............              2,113                 a Includes minor heads of household.
b Not all of these adults were counted toward TANF work participation
  rates because not all of them had enough hours of participation to be
  counted.
c Includes recipients who are employed part-time or full-time and are
  still eligible for TANF, often because they live in states that
  ``disregard'' (do not count) a certain amount or proportion of earned
  income in the calculation of welfare eligibility and benefits.
d The range for this category reflects the fact that there may be people
  who were in more than one activity, including unsubsidized employment.
  If none of the recipients in other work-related activities were also
  employed, then there would be 248,528 adult recipients in these
  activities; if some of them were also employed, then there could be as
  many as 363,881 in other work-related activities.
Source: U.S. Department of Health and Human Services, Administration for
  Children and Families, unpublished data.

                                 ______
                                 

                                     TABLE 2. AVERAGE MONTHLY NUMBER OF ADULTS IN WORK EXPERIENCE, UNSUBSIDIZED EMPLOYMENT, OR SANCTIONED: FISCAL YEAR 1999
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 U.S.        CA        IL        MI        NJ        NY       NYC a      OH        PA        TN        TX        WV        WI
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Adults......................................................   2,112,143   539,259   101,821    69,284    45,762   260,641   171,507    77,463    96,173    40,812    82,729    14,348     8,473
Work experience.............................................          4%       b................................................     585,396   219,237    43,462    25,282     7,237    44,227    26,356    20,890    25,214     8,423     3,877       939     2,447
Sanctions c.................................................          5%        1%       10%        3%        8%        6%        9%       22%        5%        NA       15%        NA       23%
                                                                 105,607     5,069     9,968     2,224     3,679   d15,583    15,583     1,689     5,284              12,798               1,928
Engageablee.................................................   1,421,140   314,953    48,391    41,778    34,846   200,831   129,568    54,794    65,675    32,389    66,054    13,409     4,098
Percentage of engageable in work experience.................           6         1         9        a New York City data are as of July 28, 1999.
b Although the 1996 welfare reform law calls this category ``unsubsidized employment,'' the term is misleading, because it involves the ongoing provision of a welfare grant.
c Based on sanction rates reported by the U.S. General Accounting Office for 1998.
d The number of sanctions in the state of New York was not reported; the data are thus limited to the number of sanctions in New York City.
e The term ``engageable'' is intended to identify the number of recipients who are potentially available for participation in work-related activities, because they are neither in unsubsidized
  employment nor in sanction status.
Source: U.S. Department of Health and Human Services, Administration for Children and Families, Temporary Assistance for Needy Families Program: Third Annual Report to Congress (Washington,
  D.C.: U.S. Department of Health and Human Services, August, 2000), pp. 48-49, available from: http://www.acf.dhhs.gov/programs/opre/annual3.pdf, accessed September 19, 2001; New York City
  Human Resources Administration, ``FA/TANF--July 28, 1999--Weekly Report''; and U.S. General Accounting Office, Welfare Reform: State Sanction Policies and Number of Families Affected
  (Washington, D.C.: GAO, GAO/HEHES-00-44, March 2000).

                                                                                            --------
                  TABLE 2A. AVERAGE MONTHLY NUMBER OF ADULTS IN WORK EXPERIENCE, UNSUBSIDIZED EMPLOYMENT, OR SANCTIONED: FISCAL YEAR 2000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                   U.S.        CA        IL        MI        NJ        NY        OH        PA        TN        TX        WV        WI
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adults........................   1,588,651   304,705    66,143    54,679    33,056   232,540    65,129    63,879    44,003    90,275    10,157     5,710
Work experience...............          4%       a.....         24%       25%       39%       40%       20%       20%       31%       25%       20%        6%        6%        8%
                                   382,604    75,631    25,478    21,782     6,658    45,508    20,279    15,911     8,646     5,733       632       438
Sanctions b...................          5%        1%       10%        3%        8%        NA        2%        5%        NA       15%        NA       23%
                                    79,433     2,864     6,475     1,755     2,658               1,420     3,449              13,966               1,299
Engageable c..................   1,126,614   226,210    34,190    31,142    23,740   187,032    43,430    65,675    35,357    70,576     9,525     3,973
Percentage of engageable in              6         1         9        a Although the 1996 welfare reform law calls this category ``unsubsidized employment,'' the term is misleading, because it involves the ongoing
  provision of a welfare grant.
b Based on sanction rates reported by the U.S. General Accounting Office for 1998.
c The term ``engageable'' is intended to identify the number of recipients who are potentially available for participation in work-related activities,
  because they are neither in unsubsidized employment nor in sanction status.
Source: U.S. Department of Health and Human Services, Temporary Assistance for Needy Families Program: Third Annual Report to Congress (Washington,
  D.C.: U.S. Department of Health and Human Services, August, 2000), pp. 48-49, available from: http://www.acf.dhhs.gov/programs/opre/annual3.pdf,
  accessed September 19, 2001; New York City Human Resources Administration, ``FA/TANF--November 19, 2001--Weekly Report''; and U.S. General Accounting
  Office, Welfare Reform: State Sanction Policies and Number of Families Affected (Washington, D.C.: GAO, GAO/HEHES-00-44, March 2000).

                                                                                            --------
 [GRAPHIC] [TIFF OMITTED] T8903H.008

                                ------                                

Conclusions
    1. I believe that the past six years' experience establishes that 
mandatory work-related activities are a key element in any successful 
program of welfare reform. They can:
           Reinforce Work First efforts,
           Make time limits enforceable,
           Enhance human capital, and
           Build public support for further welfare reform 
        efforts.
    2. Up to now, almost all the work participation under TANF has been 
composed of recipients combining work and welfare, generally because of 
the very generous earnings disregards adopted by the states.
    3. States are far from having the infrastructure and expertise to 
operate large mandatory work programs.
    4. There is substantial interest among the states, for good or for 
bad, in offering services (and mandating participation) in activities 
other than work, such as drug treatment and remedial education. (Some 
of this may have been driven by the belief among states that, if they 
did not spend their TANF surpluses, they would lose them. In this 
regard, the Administration's proposal to allow states to create their 
own ``rainy day'' funds is most welcome.)
    5. The current law contains many ways that states can minimize (and 
even avoid) TANF's participation requirements-such as by creating 
separate state programs or child-only cases, by adopting loose 
definitions of work, and by increasing the number of those combining 
work and welfare (by increasing earnings disregards even more and by 
suspending the time-limit clock).
    6. Although most attention is being placed on requiring states to 
increase participation rates, it is equally important to remove 
barriers to their doing so. An important example is the need to exempt 
work-related activities from the reach of the Fair Labor Standards Act, 
and especially its minimum wage requirements.
    7. Finally, any effort to increase TANF's participation rates--
which I strongly support--will require a keen appreciation of the 
complex factors that will shape state responses--and should be prepared 
for unintended consequences.

                                

    Chairman Herger. Thank you very much, Mr. Besharov. Now, we 
will turn to questioning, and the gentleman from Kentucky, Mr. 
Lewis, to inquire.
    Mr. Lewis. Thank you, Mr. Chairman.
    Ms. Graves, I understand you learned an interesting lesson 
when you tried to help your 10 hardest cases find employment 
before exhausting their benefits. Can you describe this for us?
    Ms. Graves. What we found when we were out in the district 
was that these cases who refused to go to work at all had other 
incomes, and not necessarily legal incomes, coming in the 
household, or they had someone else who was taking care of the 
family. So the need or the urgency to go get a job was not 
there for them.
    In only one situation did we find that it was a domestic 
violence situation that kept the individual from seeking work, 
and that was because she was afraid to leave the house. Now, 
for that--and only because we continued to investigate and 
continued to investigate what was going on did we find out that 
domestic violence was the problem. But the other nine all had 
other activities going on.
    Mr. Lewis. I see. In your testimony, you mentioned your 
program's principle is to reduce out-of-wedlock pregnancies and 
promote family formation. What specifically have you done to 
achieve those?
    Ms. Graves. We have two programs, one with Project Impact 
and one with the Interdenominational Ministerial Alliance. 
Those are two faith-based organizations. We do not specifically 
contract with them for family formation, but their programs, 
one is Family Works, the other one is Family to-Family, the 
mentoring that they did, they finally figured it out that to 
help that family become stable was to involve the fathers in 
the family, and from that, because they introduced the faith-
based part to it, they got them in church and involved in many 
activities that led to those families forming and becoming 
mates.
    But I tell you one problem with the family formation, the 
reason why we do not push it so hard is, number one, some of 
those are not healthy formative situations, and number two, not 
all of the children have the same father. Which father are we 
trying to form with them?
    [Laughter.]
    Mr. Lewis. Yes. Thank you.
    Ms. Graves. Thank you.
    Chairman Herger. Thank you, Mr. Lewis. The gentleman from 
Michigan, Mr. Levin, to inquire.
    Mr. Levin. I am not sure Mr. Lewis got the answer you 
wanted.
    [Laughter.]
    Mr. Lewis. Well, we are looking for the truth.
    Mr. Levin. I misspoke--the answer you expected. I did not 
mean that in any other way.
    But I think that that is the utility of this hearing, and I 
hope that a transcript can be made available soon, because when 
Mr. Greenberg was testifying, I saw a number of you shaking 
your heads in agreement, on certain points, anyway. It is 
interesting, there is more common ground than there is 
disagreement, up to a point.
    Mr. Besharov, I will tell you what most people in the 
district I represent think welfare reform means, and I 
represent a suburban district, I will not describe it otherwise 
perhaps because it is not easy to describe, but welfare reform 
has always been an issue of real importance.
    I think when I ask them, what do they think welfare reform 
is all about, they would say, moving people off of welfare into 
work. That is what they mean, not those on welfare working. It 
is people who are receiving assistance moving off of 
assistance, and that is why they, in Michigan, under Governor 
Engler, there has been major income disregard. People who have 
moved off of welfare are in very substantial numbers still 
receiving some assistance. The same is true in Wisconsin and in 
many other States.
    And so I think we need to talk through this very issue, 
what we mean, where our focus is. If our focus is on making 
sure people who are receiving assistance are working rather 
than getting people moving from welfare into work and 
eventually earning enough so there is no income disregard, 
there is a difference there.
    In some States, they may not get cash assistance. They 
receive services. I guess that is maybe true in Wisconsin. Is 
there any cash assistance at all to people who have moved off 
of welfare to work?
    Ms. Reinert. No.
    Mr. Levin. There is none. In Michigan, it is very 
substantial. I think that is an argument for flexibility, and I 
noticed, to the Secretary of the Department in Wisconsin, you 
said that raising the bar on work participation will make a 
significant difference as long as States can retain the ability 
to decide what activities are most appropriate on a case-by-
case basis. I think you have to read that that the 
Administration's proposal does not do that.
    Ms. Reinert. I would disagree with you on that. I believe 
that the work participation bar is absolutely necessary in 
terms of accountability.
    Mr. Levin. I am not disagreeing with that, but as long as 
States retain the ability to decide what activities are most 
appropriate on a case-by-case basis, do you think the 
Administration proposal does that?
    Ms. Reinert. I guess I am talking about a broader 
flexibility in terms of utilizing the 20-percent exclusion, 
too. We are looking for flexibility within the State to treat 
people as individuals. But I am in full support of the plan 
relative to work participation and work requirements.
    Mr. Levin. But it changes the flexibility of the States as 
to what the mix is. Everybody acknowledges that the flexibility 
of the States as to the mix of activities. There is no other 
way to read that. I know you are from Wisconsin, but----
    [Laughter.]
    Mr. Levin. I mean, it changes the flexibility, does it not? 
Do not answer that. I do not want to put you on the spot. But 
it does.
    [Laughter.]
    Mr. Levin. I mean, in terms of vocational education, if it 
goes from a year to 3 months, it changes it. The 24-16 changes 
it, does it not, Ms. Graves?
    Ms. Graves. Yes. Every time you prescribe something, you 
limit flexibility. It has to be on a case-by-case basis. For 
some families, 16 hours would be fine, but for others, it may 
be that we get them in a drug counseling program for 4 hours a 
week, but we may have education for 10 hours. Being able to 
count what that family needs to do to become stable and in a 
work situation is what is important, not prescribing that you 
do 16 hours of education and 24 hours of work. We know work has 
to be in there, but let the case determine. Let the State 
determine what that needs to be.
    Mr. Levin. Will you come on Tuesday?
    [Laughter.]
    Mr. Levin. You are working at the grassroots, as some of 
the others are. I just urge that we pay attention to this. I 
think if we do not, we are saying, and I will finish with this, 
that we like flexibility as long as the States agree with us. 
If they do not, then we believe in inflexibility, and I do not 
think you can have it both ways. There have to be some 
standards, but I think we need to ask ourselves what they 
should be, and also going back to you, Mr. Besharov, I think we 
need to have a good discussion as to the meaning of welfare 
reform. To me, the objective is to get off of welfare.
    Chairman Herger. The gentleman's time has expired.
    Mr. Levin. I know, but there is nobody else here, so I 
thought I would----
    [Laughter.]
    Mr. Levin. Mr. Cardin, if I might indicate, is not here 
only because he is debating this bill on the floor, and I am 
now going to go and do that and give you the rest of the time, 
Mr. Chairman.
    Chairman Herger. I thank the gentleman.
    I do want to point out, my understanding is 16 hours of 
those 40 hours are flexible that the President has put into 
that program, so it would be flexible from the State.
    Secretary Reinert, if I could inquire of you, you have 
noted that Wisconsin provides extensions of the time limit for 
certain individuals with special circumstances. Is that an 
extension from the 60-month time limit, and are you anywhere 
close to reaching the 20 percent cap on hardship exemptions?
    Ms. Reinert. We are nowhere near reaching that cap. The 20 
percent gives us more than enough room. We have--our cap would 
be 3,600 cases, and we have 75 active extensions at this point 
in time. So we believe we have a tremendous amount of 
flexibility within that 20 percent, and perhaps that is the 
issue of flexibility that I was trying to address there, that 
there is flexibility in the overall program to meet individual 
needs and not do a cookie cutter approach.
    Chairman Herger. Thank you. I would have to agree with Ms. 
Graves and virtually everyone we talked to. This flexibility is 
very important with perhaps some guidelines in there, but I 
believe everyone I talked to agrees with that.
    Another question. I also note, Ms. Reinert, your point on 
page 10 of your testimony about the need to help communities 
with pockets of high unemployment attract new businesses and 
retrain workers, and I totally agree. Some have proposed going 
beyond that to say that we should exempt individuals who live 
in disadvantaged areas from work requirements and time limits. 
That may sound compassionate at first, but I am afraid it could 
effectively seal off such communities from the pro-work message 
and all the energy that has helped transform welfare in so many 
communities in America in recent years, and I would welcome 
your thoughts on this. Are there areas of Wisconsin where you 
feel that people simply cannot find or at least prepare for 
work?
    Ms. Reinert. Our strong position has been all along that we 
are not going to leave anyone behind. It does not matter where 
they live geographically, what the economic situation is, what 
their personal situation is. We believe that everyone can be 
engaged in activities that can move them toward self-
sufficiency. So I am not sure if that thoroughly answers your 
question, but it is a strong philosophical base that W-2 has.
    Chairman Herger. I believe it does, and I think the point 
there is not that we cannot--the bottom line is, we do not want 
to leave anyone behind.
    Ms. Reinert. Exactly.
    Chairman Herger. And perhaps in the area where they are 
most in need in these communities is perhaps where they need 
the most help not leaving them behind.
    Ms. Reinert. And that goes to the community partnership, 
looking at what are the economic needs in the area and the 
employers and matching the training to meet those needs.
    Chairman Herger. Finally, do you know of any area in your 
State where you would find that you would want to exclude?
    Ms. Reinert. No.
    Chairman Herger. I thank you for that. With that, I want to 
thank each of our witnesses----
    Mr. Lewis. Mr. Chairman.
    Chairman Herger. Mr. Lewis.
    Mr. Lewis. Could I ask one more question of the panel?
    Chairman Herger. Yes.
    Mr. Lewis. Thank you. I appreciate it.
    Chairman Herger. Since you are the last one----
    Mr. Lewis. I am the only one.
    [Laughter.]
    Mr. Lewis. I recently met with a group of people, senior 
citizens, that are taking care of their grandchildren, and I 
understand there are about 6 million in the country today. I 
think in the State of Kentucky, there are about 60,000. How are 
the States dealing with these children? I mean, most of these 
grandparents that I talked to were, of course, on fixed income, 
retired. They are barely able to take care of themselves, but 
they want to keep that family together as much as possible. How 
are the States dealing in making sure those kids are provided 
for with those basic necessities, education, health care, and 
so forth? How are you dealing with that? And do you have enough 
flexibility to deal with that?
    Ms. Graves. Flexibility is one of the problems, but 
resources. In the State of Ohio, they have what they call 
Kinship Navigator, that we have taken some of the dollars from 
TANF and put in Title XX to actually help those people. It is 
not so much the medical but what do you do with a child that is 
in juvenile court and you are a grandparent? It is knowing what 
resources, where they go to get this, where they go to get 
that. That is where the Kinship Navigator comes in and that is 
where States have fallen off.
    I hear them talking about illegal aliens and all that. In 
our county, the number one, the highest percentage of cases are 
with grandparents because of the drug culture, because of 
criminal activity and these people are incarcerated. And the 
grandparent, who knows nothing about the new school system, who 
knows nothing about where to go to get help, that is where the 
shortfall comes.
    But if you take away our ability to fund those activities 
by reducing down to 4 percent on Title XX, then we cannot offer 
those kinds of services to people who sorely need them.
    Mr. Lewis. And if those grandparents cannot take care of 
those kids, then those kids end up in foster homes.
    Ms. Graves. You put them in the most expensive system out 
there, child welfare. Now, you have got a choice.
    [Laughter.]
    Mr. Lewis. And if we are looking at holding the family unit 
together, it seems to me we are much better holding them there 
with their grandparents, and the grandparents want to. It is 
just a matter of they cannot go back to work. It is beyond 
their ability to do that. Thank you. I appreciate it.
    Ms. Graves. Thank you.
    Mr. Lewis. Does anyone else have anything to say about it? 
Thank you.
    Chairman Herger. Again, I want to thank the gentleman from 
Kentucky for your question.
    I would like to include in the record a written statement 
from Ronald H. Field, Vice President for Public Policy, 
Volunteers of America.
    [The statement of Mr. Field follows:]
    Statement of Ronald H. Field, Vice President for Public Policy, 
              Volunteers of America, Alexandria, Virginia
    Mr. Chairman, Members of the Committee, Volunteers of America, a 
national, spiritually based housing and human service non-profit, 
thanks the subcommittee for the opportunity to submit comments 
concerning welfare work requirements and time limits. Through our job 
placement and training programs, family transitional living programs, 
homeless shelters, emergency food and clothing assistance, and 
counseling and treatment services, we serve many low-income children 
and families. As an organization that provides an array of programs and 
services to assist children and families who are in financial and 
emotional crisis, we are concerned that stringent time limits and work 
requirements are not the most effective way to help people transition 
out of poverty and become economically independent. States need more, 
not less, flexibility to determine the definition of work, the extent 
of work requirements, and the appropriate time limit for receiving 
benefits. States need this flexibility in order to be able to provide 
recipients adequate and appropriate services to help them be successful 
in the workplace.
Recommendation #1
    The effectiveness of work requirements hinges upon the definition 
of work. Volunteers of America recommends that the definition of work 
include a full course of education or training, counseling and 
treatment for substance abuse, mental health, and domestic violence 
issues, or physical disability. Expanding the definition of work to 
include these aspects will allow people to address the issues that are 
keeping them in poverty, and then enter the work force, succeed, and 
become economically independent.
    Through Volunteers of America's experience in providing services to 
TANF recipients, we have found that education and support services are 
missing pieces of the puzzle for many. Our FindWork program in 
Shreveport, Louisiana is a 4-month program that combines job training 
and placement. Our staff have encountered first hand the struggles that 
low-skilled individuals face in finding adequate employment. ``We 
helped one client to learn the alphabet, and most clients read below a 
sixth grade level. Such low skills make it almost impossible for job 
placement. Employers are reluctant in hiring the participants due to 
lack of education,'' states Dewanna Lovelace, the FindWork Program 
Coordinator. Ms. Lovelace also sights manifestations of mental illness, 
substance abuse, and domestic violence as significant barriers to 
meaningful employment. ``In order to place people with these barriers 
in jobs, they need to receive services first. Some employers that I 
work with feel that participants lack the support services that they 
would need to maintain the jobs.''
    ``Women who have multiple barriers to obtaining and holding 
employment will be the least likely to obtain economic self-sufficiency 
under the new welfare regime begun by the 1996 Personal Responsibility 
and Work Opportunity Act'' is the conclusion of the Women's Employment 
Study (WES) conducted by the University of Michigan. The WES study 
found that of the TANF recipients studied, 31.4 percent had no high 
school diploma, 25.4 percent had experienced a major depressive 
episode, and 14.9 percent had experienced recent severe domestic 
violence. The presence of these barriers will affect the likelihood of 
obtaining and retaining employment. The current ``rapid employment'' 
approach cannot address these severe barriers. Exhibiting one or more 
of these barriers does not mean that a recipient is unemployable, 
simply that they will need more time and support services to be 
effective in the workplace.
    The ability to access real education and training opportunities is 
essential to placing recipients on true career paths rather than short-
term, low-wage employment. The W.K. Kellogg Foundation, in its 
Devolution Initiative, explores the current ``work first'' approach 
that is integral to TANF. ``Work first'' rests upon the key principle 
that pre-employment education and training are not as effective as 
standard job searches in increasing employment and earnings for 
recipients with little or no work experience. The implication of ``work 
first'' is that immediate job placement, regardless of the quality of 
the job, is the best way to advance in the work place. Contrary to this 
approach, the Devolution Initiative has found that the factors that 
predict job advancement among adults leaving welfare for work include 
higher wages in the first job, having or acquiring higher basic skills, 
postsecondary education, and post-secondary training (including English 
as a second language). All of these factors illustrate the importance 
of education and training to long-term job success.
    Robert A. Moffitt, of the Brookings Institution's Welfare and 
Beyond project, identified that the employment rates of less educated 
welfare leavers are considerably below those of their more educated 
peers, and the poverty rate of those less educated recipients is 
higher. For recipients to become permanent members of the work force, 
States have to be given the flexibility to allow education and training 
to count as a full work activity.
Recommendation #2
    Volunteers of America recommends that time limits not apply to 
families who are making an effort to comply with program requirements, 
but are still not self-supporting. Program requirements must include an 
expanded definition of work, including expanded education and training, 
treatment and counseling for mental illness, substance abuse, domestic 
violence, and physical disability. States need the flexibility to 
provide benefits until a recipient is able to work, and work income is 
high enough that a family is no longer in need of assistance.
    Leo McFarland, Chief Executive Officer of Volunteers of America 
Greater Sacramento & Northern Nevada, has found time limits to be a 
barrier for recipients who take part in his programs. Mr. McFarland 
states, ``In a recent study of 700 TANF recipients in two California 
counties, more than half reported that, over the previous 12 months, 
they had experienced domestic abuse, had one or more mental health 
issue(s), and/or had abused alcohol or drugs. In our programs for TANF 
eligible women, 100 percent of the women we serve battle substance 
abuse or mental health issues. For these women in treatment, the 
current welfare reform policies adopted in 1996, with its time 
limitations, have placed a formidable barrier to their goals to provide 
a stable and productive family environment for themselves and their 
children. Crucial to aiding this population is the need to provide 
system flexibility that would allow for the additional time necessary 
for substance abuse or mental health treatment. Effective treatment for 
serious barriers requires a different amount of time for each person, 
and cannot be held to a time clock.''
    The TANF program must be flexible enough to be able to respond to 
regional and national economic changes. During times of economic 
downturn that result in a scarcity of jobs, TANF must continue to 
provide assistance. Rebecca M. Black, of the Brookings Institution, 
concludes in ``Welfare and the Economy'' that the financial burden of 
an economic crisis now lies with the States. When a recession hits, and 
the need for incomes support rises, inevitably State's budgets are also 
hard hit and have little flexibility to shoulder the increase. States 
need to have the flexibility to allow people back into the program, 
even if they have used up their lifetime limit. The contingency fund 
that provides additional dollars for states to access during times of 
economic downturn must be adequately funded, and have reasonable 
criteria for accessibility.
Summary
    Mr. Chairman, thank you very much for the opportunity to bring you 
our thoughts and experiences having to do with TANF work requirements 
and time limits. We assure you and all members of the subcommittee that 
Volunteers of America is strongly committed to helping TANF recipients 
become productive members of society and economically independent. We 
are confident that the TANF program can work effectively and 
efficiently to help families.

                                

    Chairman Herger. I want to particularly thank each of you 
who has appeared before us as witnesses today. Your testimony 
and your answers have been very helpful to us as we move 
forward in reauthorizing TANF. I think that it has been made 
clear today that the current TANF program over the last 5 years 
has had a great deal of flexibility, both in time and in work, 
and again, I want to thank you for your testimony and would 
hope that you would continue working with us as we move forward 
for coming up with reauthorization this year.
    Thank you very much, and this hearing stands adjourned.
    [Whereupon, at 11:49 a.m., the hearing was adjourned.]
    [Submissions for the record follow:]
           Statement of Leslie Abrahamson, Westmont, Illinois
    As you consider TANF reauthorization, please remember that the goal 
is not simply to get people off of cash assistance and then forget 
about them. The system needs to be able to be flexible to meet the 
diversity of needs in our communities. Some people need help with 
substance abuse, some need help with housing, some need education and 
training and others need help with transportation and/or child care. If 
we create a one-size-fits-all public policy that just pulls people from 
assistance and throws them into the workforce without the kind of 
supports they need, those people will not be able to succeed. It is 
more cost effective and better for everyone in the community if we 
provide the types of supports people need to achieve self-sufficiency. 
Some need more supports for longer periods of time than others. Please 
listen to the experts in the field who work with clients needing 
supports so you can develop public policies that will create 
meaningful, permanent differences in people's lives.

                                

                                   Alliance for Children & Families
                                          Washington, DC 20006-1503
                                                     March 18, 2002
Honorable Wally Herger, Chairman
Human Resources Subcommittee, House Ways and Means Committee
U.S. House of Representatives,Washington, D.C. 20515
    Dear Chairman Herger,
    Please consider this cover letter and the attached document as our 
submission for the printed record of the March 7 hearing in your 
subcommittee on ``The Implementation of Welfare Reform, Work 
Requirements and Time Limits.'' We believe that it is imperative that 
you take into consideration the circumstances, successes and setbacks 
of the individuals who have first-hand experiences with the last six 
years of the TANF program.
    As your committee prepares to review and reauthorize the work 
requirements and time limits of TANF, we ask that you consider the 
recommendations of the Alliance for Children and Families, a national 
association of nonprofit, human service organizations that serve almost 
four million families in over 6,500 communities. Our research on the 
experiences of individuals affected by the welfare act has been 
compiled in Faces of Change: Personal Experiences of Welfare Reform in 
America. The stories represent families from a broad diversity of 
cultural, regional and economic backgrounds who have relied on the 
public welfare system for support in their times of crisis. Their quest 
for self-sufficiency has many common themes and our recommendations for 
improvements in the welfare law are based on these themes:
           Ensure that the definition of work includes job 
        training and post-secondary education;
           Provide incentives to the states to tailor job 
        training, job placement and job retention strategies to the 
        multiple and diverse talents and needs of the participants;
           Ask the states to keep track of their former 
        recipients and provide follow-up job assistance and assessments 
        to ensure that the workers and their families are on the path 
        to leaving poverty, not just off the welfare rolls;
           Establish new temporary waivers that ``stop the 
        clock'' for recipients who cannot meet work or looking-for-work 
        mandates:
           When chronic physical and mental health conditions 
        of the recipients and their children temporarily prevent them 
        from working;
           When childcare, housing or transportation 
        emergencies temporarily prevent them from working;
           When unemployment is high or when available jobs 
        require advanced skills that the welfare recipient has neither 
        the talents nor training to qualify for these positions.
    We ask that you carefully review both the successes and the 
multiple barriers faced by the recipients of public welfare as they 
juggle their responsibilities of parenting, working, keeping their 
families healthy and safe, and providing food, clothing, shelter and a 
decent livelihood for their children. Like many of us, welfare 
recipients have their own personal challenges which limit their 
success, including substance abuse, domestic violence, learning 
disabilities, short-circuited education training and homes that are 
many miles from day care and employment sites. Transitional support 
services that address these challenges must have your support.
    Please feel free to contact the Alliance for Children and Families 
and our member agencies all across the nation. Our website lists our 
members in every state (www.alliance1.org) and both our Milwaukee 
headquarters and our Washington, D.C. policy office can answer your 
questions about our research and our recommendations.
            Respectfully,
                                               Carmen Delgado Votaw
                               Senior Vice President, Public Policy
                                 ______
                                 

                            FACES OF CHANGE

 ENDS THAT DON'T MEET: WHAT WORKERS' STORIES TELL US ABOUT EMPLOYMENT 
                          UNDER WELFARE REFORM

        By Jamie Harris, M.A. and Thomas E. Lengyel, MSW, Ph.D.

    Jennifer Rogers is a 24-year-old single parent from East Orange, 
New Jersey. Her story is typical of many transitioning workers who find 
jobs with low pay, few or no benefits, and little flexibility when a 
child becomes sick: Pulled in opposite directions, these working 
parents attempt to meet their employment and family obligations:

        My job now is at a security company making $8 [an hour]. It was 
        hard with a child. They weren't that flexible, it's hard with a 
        child and [with him] having asthma. It's extra rough. I can get 
        a job, and everything can be going along fine for a month or 
        so, and then he gets sick. And then it's like, ``Oh, God, what 
        should I do? Should I stay here with him, or should I try to go 
        to work?'' If I go to work and he has an attack, they are going 
        to call me, and then if I'm at work, I'm not supposed to leave 
        post. So that's rough. I've usually tried to take the first job 
        that comes my way, no matter what it pays. I feel like maybe 
        something else will open up.

    For Jennifer and workers like her who have few resources to manage 
the competing demands of family and work, the real challenge for them, 
and for welfare reform in general, is for employment to be flexible 
enough to accommodate the needs of parents, and materially rewarding 
enough that provides a path to self-sufficiency.

        So I'm not really worried about finding a job, because I know I 
        can get one. It's the challenge of keeping it, with my son, and 
        not letting the employer think I'm a person who doesn't want to 
        work. It's not that. It's that I've got a lot of responsibility 
        being the only one and maintaining my apartment and everything 
        else with my son being sick. (NJ-9)

    Experiences like Jennifer's--juggling the competing demands of work 
and family while working in a low-wage job market--are crucial to 
understanding the challenges that confront current workers 
transitioning off welfare. The narratives in the Faces of Change study 
provide an important vantage point from which to see how the conflict 
of work and family come together and unfold in this new policy context. 
While the author narratives reveal a dogged determination to leave 
welfare behind and go to work, it is a determination tempered by the 
day-to-day realities workers must confront in a low-wage labor market, 
realities that can make their efforts seem futile or even leave them 
worse off.
    The main thrust of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 has been a ``work-first'' approach, with 
federal rules requiring work participation in exchange for TANF 
benefits. A key assumption of this welfare reform is that there are 
ample jobs available for former welfare recipients to take, and that by 
requiring work, PRWORA will be able to increase the job skills and work 
experience of former welfare recipients and end their present and 
future dependence on public assistance in the process (Strawn, 
Greenberg, and Savner 2000). However, as discussed in greater detail in 
each of the following chapters, many authors face significant barriers 
to work and need several supports in order to find and keep jobs that 
will meet the basic needs of maintaining a household and family.
    In addition, many workers have serious educational and skill 
deficits.\1\ Since the passage of the bill, however, there has been 
little emphasis on job training. Most welfare-to-work training programs 
across the country have consisted of workshops on how to find a job 
(e.g., resume writing, interviewing skills) and job placement 
assistance (e.g., referrals) with very few programs devoted to 
vocational training in specific fields or support for post-secondary 
education. This pattern is faithfully reflected in our study of 208 
author narrative accounts. Given the reality of health problems and 
other barriers, low education and training levels, and limited work 
experience, most of the jobs authors find are not sufficient in and of 
themselves to support a family above the poverty line. Nor are they 
flexible enough to accommodate the needs of single parents. In our 
analysis, most workers find it difficult to make ends meet even though 
they are working, while for a small group of employed authors, the 
transition to employment has been more positive and has successfully 
moved their families toward self-sufficiency.
---------------------------------------------------------------------------
    \1\ Forty percent of the authors in this study lack a high school 
diploma or GED, and very few have completed a college program or 
degree. The Urban Institute's National Survey of American Families 
found similar results-44% of TANF recipients lacked a high school 
diploma or GED (Zedlewski and Alderson 2001).
---------------------------------------------------------------------------
    What Accounts for a Lack of Employment? The group of nonworking 
authors in this study is quite diverse and their lack of employment 
relates to a number of different factors. The most common explanation 
for nonworking status appears to be having multiple barriers such as a 
chronic health problem coupled with limited education or work 
experience; a second smaller group relates to those who, though 
healthy, have been unable to find work or get hired; a third group is 
made up of authors involved in job readiness programs or other training 
and education opportunities, often outside the TANF framework.
    Barriers to Employment: Many of the nonemployed authors in this 
study must contend with a significant single barrier or multiple 
barriers to employment. This includes such conditions as serious, 
chronic health problems (among both children and adults), drug 
addiction, mental health limitations, domestic abuse, and limited 
education and work experience. Of those authors who fall in this group, 
a chronic health problem is the most frequent and significant barrier 
to working.\2\ One third of the nonemployed authors identified a 
chronic health condition,\3\ and 40% described their health condition 
as a major conflict with work or school. In fact, many authors report 
more than one chronic health problem as is true for this 48-year-old 
unemployed mother of four from Bridgeport, CT:
---------------------------------------------------------------------------
    \2\ Chronic health conditions were only slightly less common among 
employed authors in the study (29% to 33%). However, a much higher 
percentage of the nonemployed authors identified their chronic health 
issue as creating an impediment to work or school than working authors 
(40% to 26%).
    \3\ A recent GAO study found that 44% of current TANF recipients 
have work impairment or disability, three times the non-TANF 
population. The study also found, that those with impairments were much 
less likely to work. (GAO 2001). Similar findings were reported by 
Lengyel, Thompson and Niesl (1997, 40-41).

        I have a lot of health problems. For me to get a job would be 
        difficult because I have arthritis in all my body, and in the 
        morning [it] is hard for me to get out of bed and to function 
        because I'm in pain, and I take medication for my anxiety and 
        my depression and some days my depression is so bad that I 
        don't want to get out of the room. I stay in the room all day 
        long. I don't want to see nobody, don't want to do nothing. 
        And, you know, I'm afraid to get a job because some days I 
        won't be able to go to work. Difficult problems I have with my 
---------------------------------------------------------------------------
        health. (CT-13)

    Among nonworking authors, mental health issues were nearly twice as 
common as the group of working authors.\4\ In addition to health issues 
of varying degrees, authors in this group often have severe educational 
deficits and, not surprisingly, the least job experience. This can make 
the transition to employment particularly difficult and make them less 
appealing to potential employers.
---------------------------------------------------------------------------
    \4\ Eighteen percent of nonworking authors described mental health 
limitations compared to 10% for working authors. Both figures are 
likely underestimates since authors were not asked to comment directly 
on their mental health, and there is likely some reluctance to comment 
on one's mental health.

        For me getting a job is kind [of] difficult because I'm 
        illiterate and I was never sent to school and now it's very 
        hard for me to learn. It seems like I would know something 
        right then . . . but then 10 minutes later it'll go back and I 
        won't even understand it or know what it was. So they want to 
        do some type of testing to see if I do have a disability `cause 
        I have a child with a disability . . . a learning disability. 
        So the jobs are very limited that I can . . . could get and 
        they would not pay enough for me to be able to pay rent and 
        doctor bills and so forth and so on. So it's very difficult for 
        me to find a job with my education . . . which is near none . . 
        . be able to support a family right now.--A 36-year-old mother 
        of three, no education, living with HIV in East Point, Atlanta 
---------------------------------------------------------------------------
        (GA-10).

    There are also several authors in our study who have a serious 
disability or care for a child or spouse with a disability. While some 
of these authors are receiving SSI, SSDI, or VA assistance, at least 
five authors were not receiving disability for themselves, and at least 
seven were not receiving disability for a disabled child or spouse. 
Some had recently applied for disability and had been denied. Without 
disability assistance, these individuals face a daunting set of 
challenges to meet the work requirements imposed on TANF participants 
as this mother of a child with spina bifida in Brooklyn, New York 
relates:

        It was very hard for me as a mother of two young kids and one 
        with spina bifida in the wheelchair. I have to come home to get 
        her off the bus every day by 3:15 p.m. That make it very hard 
        to keep a job and her doctor appointment--some time it two a 
        week. No job don't want that and then time I work I don't make 
        enough money to pay all the bills and buy food. Some morning I 
        get up cry because it very hard for me and my kids. (NY-9)

    It is these ``hardest to serve'' families with significant barriers 
that increasingly make up the bulk of welfare recipients remaining on 
caseloads. To overcome their multiple barriers, this group will need 
more time and access to an extensive array of supports. For some, 
employment simply may not be possible. Despite this, many of these 
individuals are facing or will shortly face time limits to assistance. 
Any discussion of TANF reform needs to consider strategies that address 
the needs of individuals with multiple barriers and that ensure a TANF 
safety net for these families.
    Why Healthy Authors Are Unable to Find Jobs or Get Hired?: Even for 
authors who are otherwise healthy, many still find it hard to find 
work. Even with low levels of unemployment nationally at the time 
authors were interviewed (spring 2000), many nonemployed authors report 
being unable to find work. Part of the high level of unemployment among 
this group may be explained by the spatial mismatch of jobs and 
workers, a problem compounded by poorly developed public transportation 
systems. Unemployment also may be related to some reluctance on the 
part of employers to hire workers with limited skills.

        Right now I'm looking for a job. I don't have one but I've been 
        looking hard, but it seems like every place [I go] I have to 
        fill the application out, I end up calling them but they don't 
        ever call me back . . . so I don't know what the problem is 
        there. But I look over the application and it's filled out the 
        way it's supposed to, but they just never call me back.--An 18-
        year-old woman raising her child and currently training at a 
        tech school in Milwaukee. (WI-13)

    Some nonemployed authors are not working currently because they are 
engaged full-time in job training or education. While some authors are 
currently engaged in job readiness programs through TANF, other authors 
are pursuing education or vocational training. Most of these authors 
have been terminated from receiving TANF assistance because most states 
do not allow for postsecondary education. As a result, these authors 
must rely on family and other sources of help such as student financial 
aid to complete their studies or training programs. The chapter on job 
training examines these authors' experiences more fully.
    Ends That Don't Meet: The group of working authors, a little over 
half of those in the study (55%), found employment and had been engaged 
in work for some period of time, often as a direct result of new TANF 
rules that make employment a requirement of the 1996 law. Despite being 
employed, however, most in this group struggle to make ends meet and 
are unable to attain self-sufficiency for their families. A smaller 
number of working authors have had a more positive work experience, and 
as a result can be described cautiously as a something of a ``success 
story.''
    For the vast majority of working authors in this study, employment 
has not brought them out of poverty. 80% of working authors reported 
incomes that place their families just at or below the poverty line. 
They report frequent loss of jobs or fluctuating income due to family 
conflicts, erratic work schedules, part-time work, and jobs that pay 
low-wages without benefits, often with few or no opportunities for 
advancement. Given the relatively low skill and training levels of most 
of the authors in this study and the relatively few job training and 
education options available to workers, these are the working 
conditions that most workers transitioning from welfare must confront 
and they often complicate efforts to achieve self-sufficiency and 
sustain employment. Their experiences highlight the need for a range of 
worker supports and increased training and advancement opportunities if 
the transition to work is to be meaningful and sustaining.
    Wages, Benefits, Flexibility, and Opportunities: Analysis of the 
authors' narratives reveals a wide variety in the kinds of employment 
transitioning workers have found after leaving welfare. Employment in 
the health, retail, food, and beauty fields, as well as a variety of 
light manufacturing and factory positions indicate both a diversity of 
employment options and a variety of skills and interests among the 
participants in this study.\5\ Although these jobs vary significantly 
in their content and required skills, many of them share some key 
features that bear on the economic health of transitioning workers and 
their families.
---------------------------------------------------------------------------
    \5\ Food service jobs were most frequently reported among authors 
in the study, followed by in roughly equal proportions, health, retail, 
and temp jobs which typically involved clerical-office type work.
---------------------------------------------------------------------------
    Although the pay for the jobs authors found ranged from minimum 
wage to $12.50, most jobs were grouped in the $7 to $9 an hour area.\6\ 
The ability to sustain a decent income, however, is more dependent on 
the hours and consistency of the work available than the wage paid by a 
job. For many authors, employment did not provide full-time work. Many 
workers report work that is temporary, or jobs they got through temp 
agencies that vary from day to day:
---------------------------------------------------------------------------
    \6\ A national study found the median wage for families who left 
the welfare rolls between 1997 &'99 was $7.50 an hour in 1999 dollars 
(Goldberg and Collins 2001).

        The work I found was only $8.50 an hour and very inconsistent 
        with the hours available. The personnel director said I was 
        hired after other employees, so I was at lower priority to get 
        hours . . . I was getting 25, if I begged for it.--A 21-year-
        old TANF recipient living with her three children in Lafayette, 
---------------------------------------------------------------------------
        IN (IN-4)

        When I get a job, it's mostly temporary. So if they need me, 
        they do, if they don't, they don't. Work availability is OK if 
        you call in the morning for a temporary job. It's kind of 
        harder getting a permanent job, depending on your 
        application.--A 20-year-old woman living with her spouse and 
        child and working temp jobs in Green Bay (WI-8)

    Many jobs also lack general employment benefits such as annual 
leave and sick days or these critical benefits are deferred for 
significant periods. Without these benefits, workers face economic 
hardship if they have to take off for the inevitable illness or family 
problem.

        My job doesn't offer any benefits. Nothing. If I don't work, I 
        don't get paid. I don't have sick leave or annual leave.--A 48-
        year-old mother with one child working full-time with no 
        benefits (DC-6)

        I started working at Sears Outlet, 8/99. They usually give me 
        32 hours a week but they have cut back my hours because there 
        is not enough work. I will go full-time in June. After I have 
        been here for a year I will get benefits. I like this job 
        because it is something I can do. I only have a 5th grade 
        education, so a lot of places won't hire me. My starting pay 
        was $6.50. Now it's $7.35/hour.--A 46-year-old mother working 
        and living with her 2 children in Pinellas Park, FL (FL-4)

    Many of the jobs authors found provide little in the way of 
security or opportunities for advancement. Some authors recognize that 
these jobs promise little for their future.

        My current job started in February of 2000. I am a cashier and 
        I do odds and ends: collect paper work, keep refreshments 
        stacked and stuff like that. There are no opportunities to 
        advance. On rainy days, I don't work at all because it is 
        closed. It is not a great job because it is dead-end . . . My 
        hours are 7:45 a.m., until closing. I never get out before 6 or 
        6:30. It is a long day. There are no benefits of any kind.--A 
        24-year-old car wash cashier living with her two children in an 
        extended household in Washington, D.C. (DC-1)

    Some workers said that their skill level and the lack of training 
opportunities limited their potential for advancement.

        My last dietary job started at $6/hour and increased to $7.50/
        hour after training. I was paid $8/hour as a home health aide . 
        . . There is no room for advancement as a home health aid 
        unless you get more medical training.--A 36-year-old unemployed 
        mother living with her two children in St. Petersburg, FL (FL-
        7)

    Choosing Between Parenting and Wages: Given the low-wages, poor 
benefits, and limited opportunities in this labor market, many authors 
are faced with a choice between meeting their parenting 
responsibilities or working. Although all parents have difficulty 
balancing work and family, most parents are able to rely on employer-
based provisions such as vacation and sick leave to cover time missed 
to care for a sick child or a daycare conflict without fear of a loss 
of income or losing one's job. In addition, given that the vast 
majority of parents in our study are single parents, their ability to 
manage the day-to-day demands of parenting or to care for the needs of 
a child is further limited. Without the benefit of employer provisions 
and a second parent, many transitioning workers find they are forced to 
choose between neglecting their families and neglecting work.
    In these narratives, the authors frequently acknowledge their 
limited employment options. They often identify with clarity the trade-
offs that working in certain jobs present for their families. However, 
they also recognize that they have few options and while disturbed by 
their limited options, many transitioning workers accept unfavorable 
employment even if it means neglecting family needs.

        Yes, I am working . . . I go along with the rules but the work 
        hours are very difficult for me . . . I start at 10 p.m. and I 
        leave at 5 a.m. They pay me $7 per hour . . . what I need to do 
        is learn English . . . for the moment I am studying and working 
        but I ignore my children a lot in order to advance at work . . 
        . there is no opportunity to move up because there are too many 
        people . . . The qualifications they want is that you have two 
        years [on the job] to change positions and it's impossible for 
        the people to last that long since the work is very hard and 
        the work hours, too.--A 45-year-old mother living with her 
        spouse and four children in Chicago Lawn, Chicago (IL-1) 
        [translated from Spanish]

        I put in a lot of hours at my job. I work Monday-Friday from 9-
        4:30, then I go home and work at least every night five hours 
        on opening mail for my company. I work for a mail order 
        company. By me bringing work home at night I am able to spend 
        very little time with my four children. On weekends, I spend as 
        much as 8 to 11 hours opening mail, so I don't get to spend as 
        much time with my family as I would like to.--A 31-year-old 
        mother working for a mail order company, living with her spouse 
        and four children in Norwalk, CT (CT-6)

        I don't have anything against going to work, but my daughter 
        was sick a lot, and my son had ADHD so it was hard to find 
        sitters. It still is hard to find sitters. Now my main problem 
        is I am working two and three jobs, driving my kids nuts, 
        stressed out all the time, and public aid is helping me even 
        less.--A 30-year-old mother working three jobs, living with her 
        two children in Le Claire, IA (IA-2)

    These examples illustrate some of the ways authors respond to the 
conditions inherent in a low-wage job market. By pursuing a strategy of 
working long hours and/or working multiple jobs, authors are able to 
increase their earnings to some degree. However, as the first author 
points out, it is often an unsustainable strategy.
    While some transitioning workers accept this trade-off, many do 
not, and are willing to sacrifice potentially higher wages or increased 
hours for work that is more compatible with meeting what they perceive 
to be their parental responsibilities. For these authors, their primary 
concern is providing adequate care for their children. Employment 
becomes secondary, and is frequently looked upon as self-defeating.

        I believe that my son comes first, that I feel I have to work 
        around his needs. Bartending is not an end-all, but it's a 
        solution for me right now. If a job can work around my son's 
        needs, then that's where I'll put my efforts . . . I think 
        being a parent is the most important job, and I take it 
        seriously. My life centers around him.--A 42-year-old bartender 
        home-schooling her son in El Paso, TX (TX-1)

        Most job[s] I obtain, I have to make sure that the hours are 
        suitable to work around my son's school schedule. Most of those 
        types of jobs are too far out to travel to. By me remaining 
        local, I'm limited to very low paying jobs with no room for 
        advancement.--A 34-year-old mother supporting her three 
        children in St. Petersburg, FL (FL-8)

        Lately, my jobs have been hard. You want to earn more money, 
        but then your benefits suffer, and most jobs I go for are not 
        set schedules, so I can't receive child care. Because I would 
        like to be with my kids during the day, it's hard to find night 
        child care.--A 25-year-old single mother supporting her two 
        children in Green Bay (WI-10)

    Making sure the needs of their children are met, even if it means 
sacrificing higher paying jobs or even employment itself, represents 
one type of family adaptation to the set of contradictory pressures 
often facing these working parents. In striving to increase employment 
outcomes and reduce the welfare rolls, questions about parenting and 
how welfare leavers should best care for their children have often been 
ignored. This reflects, in part, the sharply divergent work and 
parenting experiences of most policy makers and the public as a whole 
for whom work and family do not frequently represent such a stark 
trade-off. Although the public may not fully appreciate the trade-offs 
that confront these parents, their desire to do what is best for their 
children is a broadly shared value.
    Low-Wage Jobs and the Demands of Family: Even when working and 
increasing one's income is a central priority, the conditions of work 
found in the low-wage job market can frustrate the best of efforts. For 
example, temp jobs which are often endorsed by welfare offices in job 
fairs or promoted by caseworkers to their clients present a set of 
distinct challenges. In addition to having virtually no job security, 
limited hours, and often low pay and few or no benefits, these jobs can 
be especially difficult for working parents, who, unable to predict 
when they may be called to work, must quickly secure daycare 
arrangements.

        I have not been able to find full-time employment, but have had 
        some part-time jobs through a temp service as a secretary. The 
        pay is OK. Once I find full-time employment, I know I'll be 
        able to provide for me and my child. Working with a temp agency 
        is kind of hard because I have to go in when they call and I 
        need a babysitter right away.--A 22-year-old single mother with 
        1 child making $800 a month in Detroit through a temp agency 
        (MI-7)

    Erratic work schedules or hours that are incompatible with family 
life or daycare often mean transitioning workers will have difficulty 
keeping their jobs. The authors in this study often describe losing 
jobs because they missed some time from work to care for a sick child 
or due to conflicts with work hours and arranging daycare.

        I found a job working for GIANT, and the hours did not work out 
        with daycare, so I left. I missed three days, when my daughter 
        was sick, and got laid off because you can't miss three days in 
        the first 90 days on the job. I then moved on to inventory and 
        the hours again did not work out, because I was supposed to 
        report at 5:30 in the morning at the babysitter but she can't 
        accept children that early in the morning.--A 19-year-old 
        mother working and living with her two children in Washington, 
        D.C. (DC-2)

    Working low-wage jobs compounds problems for transitioning workers 
who often lack transportation and have high daycare costs that absorb 
much of their income. These workers may lose their jobs when they miss 
work or need to reduce hours in order to take care of children.

        I had problems with transportation . . . buses are infrequent 
        and don't go where I need to go . . . and do not work for 
        getting to and from work because most work is too early or too 
        late for buses. Also, when I or my children got sick, jobs 
        didn't like that. Work is hard to find where I live. The pay is 
        low and employers do not help a small family.--A mother of four 
        from Laurel, Delaware trying to make ends meet on $350 a month. 
        (DE-3)

        I have not had a job in the last year that I was able to keep. 
        My son needed day care and I did not have any transportation. 
        After I paid someone to watch him, I barely had enough money to 
        pay bills. They were just minimum wage jobs, with no chance for 
        advancement. If I didn't work the extra hours they needed me 
        to, I would get fired, but I had to get my son. I'm currently 
        unemployed.--A 23-year-old unemployed mother with one child 
        living in Detroit, MI (MI-4)

    These examples illustrate the contradictory pressures felt by 
transitioning workers. Even when working, these authors often find that 
their ``success'' in the labor market can be quickly derailed by the 
routine disruptions of parenthood since their jobs provide few of the 
resources or flexibility needed to manage family responsibilities. 
Rather than provide the route to self-sufficiency that policymakers 
have envisioned the intersection of work and family in a low-wage job 
market appears deeply problematic and incompatible.
    TANF Rules and the Transition to Work-Finding Employment May Reduce 
Critical TANF Supports: While these workers encounter a host of 
problems in the labor market that complicate their transition to 
employment and self-sufficiency and challenge their ability to meet 
parental responsibilities, TANF rules can offset some of the problems 
facing workers. Rather than compensate for the inadequacies found in a 
low-wage job market, however, TANF rules often reinforce them, a 
subject that will be taken up in greater detail in the following 
chapter on public benefits. In many cases, workers find they are unable 
to pay for daycare and other family needs once they start working and 
their benefits are reduced or ended.

        When I started working, it was only 3 days a week for 2 or 3 
        hours. Not to mention my check being cut down to $130 a month. 
        So it seems like after I got a part-time job, I started 
        struggling. I had to pay $100 a month for daycare, and also buy 
        diapers and wipes for the month. The little bit of change I 
        made from work was spent to buy my son's clothing. I was 
        struggling because they cut my check down.--An 18-year-old 
        woman raising a child with a chronic illness and attending 
        school, living in College Park in the Atlanta area. (GA-9)

        It's really hard when you work. When you're on W-2 and you're 
        going through their program you have no problems with getting 
        food stamps, but [as] soon as you get a job--they won't cut 
        your medical benefits, you'll always get medical benefits--but 
        they'll cut your food stamps. The food stamps are gone; they'll 
        give them to you for a couple of months--A 26-year-old 
        certified nursing assistant living with her two children in 
        Milwaukee, WI (WI-7)

    Meeting Family Responsibilities May Reduce TANF Supports In 
addition, family needs that arise can complicate meeting TANF 
obligations, which in turn can further exacerbate both family and 
employment problems. Some authors report being sanctioned or losing 
TANF assistance or other support benefits because they were unable to 
meet a program requirement or had to leave a program to care for a sick 
child. A 38-year-old mother who was working for the 2000 U.S. Census 
and living with her child in Hartford, CT, relates:

        My daughter started failing in her grades . . . So, what I did 
        was that I left that position, for her. Because I felt like she 
        was accustomed to having me there, so, to help her with her 
        homework and so forth and I wasn't there so you know, that had 
        to be the reason for it. So I left that position and the state 
        terminates me, completely. And that left me in dire straits. 
        Um, I went through the hearing and everything and it still 
        turned out with my having no monies to actually pay my rent. 
        Because that's what that helped me for and if I worked and 
        that's to get odds and ends for the house and pay bills and 
        whatever. So she went up in her grades, thank the Lord. But we 
        lost our monies and so forth. I've been temping since. I'm 
        trying to obtain a permanent position but it hasn't been easy. 
        (CT-3)

    TANF Rules, Advancement and Higher Wages: Current TANF program 
rules may inadvertently work to restrict advancement and higher wages 
for transitioning workers by sanctioning or ending benefits if a 
participant leaves a job. Under TANF program rules in many states, 
transitioning workers who are stuck in dead-end jobs frequently face 
the dilemma of losing valuable supports if they lose their jobs or 
reduce their hours to look for something better or to seek out job 
training and education to land better paying jobs. This, despite the 
fact that several studies find that voluntary job changes lead to 
higher wages among former welfare recipients, and the long established 
positive correlation between income and education.\7\
---------------------------------------------------------------------------
    \7\ For a review of several studies, see Strawn, Greenberg, and 
Savner 2001, 15-17.
---------------------------------------------------------------------------
    Serendipitous Success: Some of the employed authors in this study 
can be considered a kind of ``success story.'' Of the 106 families in 
our study that are working, approximately 14 have found jobs and life 
circumstances that bring their families a degree of material security 
and who appear to be on the path to self-sufficiency or have already 
achieved it. What is clear from this group is that success is as much 
based on the co-incidence of family supports, positive life 
circumstances, and simple good fortune as it is on finding that ``great 
job.'' Thus, rather than being able to point to some successful 
strategy, these authors' success reflects a decidedly serendipitous 
element. In many ways the work histories and training and educational 
backgrounds of this group of workers are quite similar to those who are 
working but aren't ``making it.'' What stands out among this group is 
the positive confluence of multiple factors in their lives that are key 
to making the transition to work successful in terms of self-
sufficiency and employment, sustainable over the long term.
    Still, their level of success is quite relative and precarious. 
This group of more successful workers is only marginally better off 
than the other group of working authors. With incomes that put them in 
a ``near poor'' status, and with several lacking postsecondary 
education or a clearly defined vocational degree, their situation is 
delicate enough that one change in their life situation could place 
them in the group of workers struggling to make ends meet.
    Working Conditions That Distinguish the ``Success Stories'': These 
authors have higher earnings than other workers in the study. Many of 
these workers were employed in jobs that paid $8-12 an hour which 
generally included benefits, a somewhat better situation than the 
majority of working authors. Often these workers have found employment 
that offered advancement in the last couple years. However, nothing 
about the type of jobs or fields represented among this group of 
``success stories'' suggests a distinct advantage from working in a 
particular field or industry. These workers hold jobs in the health 
field, in clerical office jobs, and in retail--fields that are common 
to both groups of workers.
    What distinguishes this group is these workers appear more likely 
to have full-time work, and in some cases overtime, which help to 
increase their incomes. Their higher incomes help to absorb the high 
costs of child care, though some describe needing more assistance in 
this area. Many of these workers are also offered advancement and tell 
of employers who encourage them to apply for new positions and show 
concern and support when problems arise in their work or family life. 
Some of these employers provide flexible scheduling to manage family 
needs, something that many workers in the other group cite as a cause 
of losing or having to quit a job. One author describes a workplace 
that is flexible enough to accommodate the parenting needs of caring 
for a small infant while working.

        I applied for a job as a bookkeeper before I had my baby, and 
        got it because of the skills I learned while at the nursing 
        agency. I make $11 an hour and have room for advancement. I 
        make the best money I have ever made. I got really lucky with 
        this job because I don't have set hours. I get paid for a 40-
        hour work week, but only have to work until I get everything 
        done that needs to be done. Also, I can also take my son with 
        me which works out wonderful because I am breastfeeding.--22-
        year-old bookkeeper living with her two children, Raleigh, NC 
        (NC-1)

    Many of these workers also had affordable private insurance through 
their work. Although this group in general had few health issues to 
contend with, the combination of good benefits with the willingness of 
an employer or supervisor to be supportive of an employee's family life 
is noteworthy. One author describes the support she received from her 
supervisor during a rocky period after a divorce. She explains that she 
was encouraged to seek out some counseling through her private health 
insurance to help her through this hard time. Without this level of 
support from a supervisor and the easy access to counseling services, 
it is possible she might have quit or lost her job. Taken individually, 
each of these aspects may not seem significantly different from other 
worker experiences, but taken as a whole for this group of workers, 
they represent a more optimal labor market situation than for the 
majority of workers for whom employment has not brought self-
sufficiency for their families.
    In addition to experiencing a better set of working conditions and 
benefits of employment, these workers are also notable for some of 
their life circumstances and the level of social resources they are 
able to bring to bear on managing the demands of work and family. For 
example, this group of workers and their children have few health 
problems. This contrasts sharply with the other group of workers and 
those not working, among whom chronic health problems are common. This 
group is also notable for its access to private transportation. Nearly 
all of the authors in this group had a car or access to one. They 
commented that it was needed to manage work with family, as when 
children had to be dropped off at multiple locations some distance from 
home, or when getting to work involved a significant commute.

        I own my own car. I fill my tank when I get paid each week and 
        it lasts until the next week. I have just always budgeted for 
        that. I spend about 30-35 minutes one way to get to work, 
        including dropping my daughter off at school and dropping my 
        son off at daycare.--A 34-year-old mother with three children 
        balancing work and family life in Wake Forest, North Carolina 
        (NC-5)

    The overall resemblance of this group of workers with those workers 
not making it is instructive. Although this group of authors and their 
stories are not distinguishable by some successful strategy they have 
adopted, the few but significant differences in their social resources, 
life circumstances, and work experiences do suggest a formula for 
expanding the reach of self-sufficiency to more families. Such a 
formula must address both supports for working parents and improvements 
in the job market environment.
    The Role of Worker Supports: As their accounts reveal for both 
working and nonworking authors, finding jobs, sustaining employment, 
and advancing in the labor market do not occur in a vacuum. These goals 
are mediated by the level of family and worker supports that may or may 
not be in place to meet such vital needs as child care, transportation, 
and health care. Although the group of ``success stories'' generally 
had access to health care through an employer, and either could rely on 
family help to provide child care or could afford private child care, 
the vast majority of transitioning workers need these supports through 
TANF and other programs. Currently, many do not receive them.
    The levels of worker supports offered to transitioning workers vary 
in part due to state by state differences in the scope of programs and 
eligibility. In terms of health insurance, a relatively high percentage 
of authors (83%) who were employed have access to medical insurance, 
most of it coming from state Medicaid programs rather than private 
health insurance from an employer. While this finding is encouraging, 
it signals that a significant number are without any health insurance 
and that very few working authors receive health insurance through 
their employer.\8\ As will be discussed in the chapter on health care, 
a number of gaps exists in Medicaid programs and many participants lose 
these benefits once they are working or their incomes rise, regardless 
of whether they have access to private forms of health care from their 
employers. Rather than base Medicaid eligibility on income, the 
availability of private health insurance should be the main criterion 
for continued eligibility. On the other hand, a much smaller percentage 
had access to child care assistance (roughly one half of those working 
in our study). However, the need for child care assistance and greater 
access, particularly hours of operation that fit with many work 
schedules, emerge clearly in these narratives as a worker support 
absolutely critical to transitioning workers.
---------------------------------------------------------------------------
    \8\ Only 18 working authors received private health insurance 
through their employer.

        Child care on the most part is good but sometimes it impacts on 
        getting to work or looking for work. There should be more child 
        care options, like having one at my apartment complex. Also a 
        lot of child care is geared at 8 to 4 or 9 to 5 jobs, but about 
        half the jobs are very-early-starting jobs or end late or on 
        weekends. Then child care becomes a nightmare. This is 
        especially where central locations of child care should be 
        available.--A mother with four children from Laurel, Delaware. 
---------------------------------------------------------------------------
        (DE-3)

        I have had a lot of trouble finding a job. I don't have any 
        degrees or experience, so I am blown off right away most of the 
        time. However, most recently I found that I could have applied 
        for many jobs. I have a better chance than I've ever had before 
        now. Yet, the biggest pitfalls remain the same. Many employers 
        want you to be very flexible with your schedule and work 
        weekends and holidays. My babysitter doesn't work weekends or 
        evenings. This makes it hard for me to find a job sometimes. 
        Also, I have to work around my son's school schedule because I 
        don't have any family [or] friends to help me do things. I 
        really need a job that is flexible with me--one that allows me 
        to take care of my family as well as my work. Most jobs just 
        don't understand that you may not have anyone else who can take 
        your kids to the doctor's, etc. I make more money right now 
        than ever before, but I still couldn't pay for child care for 
        two children. I just don't know what I will do when my child 
        care assistance ends! Will I be on the streets again? Probably! 
        It is very sad!--A 28-year-old mother working and living with 
        her two children in El Cajon, CA.(CA-2)

    The disparity between health insurance coverage and child care 
assistance is most likely a reflection of the greater 
institutionalization of state Medicaid programs and the relatively 
recent focus on child care programs nationally since the passage of 
PRWORA in 1996. Nonetheless, these accounts point to the need for 
greater resources and assistance directed at child care for 
transitioning workers. One state that has provided such an approach is 
Wisconsin. Wisconsin recently increased the income eligibility for 
child care assistance to 185% of the federal poverty level (or $26,172 
for a family of three) and participants remain eligible until their 
income exceeds 200% (or $27,756) of the poverty level (Ehrle et al. 
2001). These issues will be taken up in greater detail in our chapter 
on child care.
    Finally, having access to a car appears to be an important factor 
in the group of success stories. Innovative programs that provide loans 
to purchase a car, and other programs that help transitioning workers 
gain access to private transportation are likely to be an effective 
strategy to help families manage the competing demands of work and 
family and promote self-sufficiency. The chapter on transportation will 
outline these programs in greater detail.
    The Role of the Private Sector: Although most of the jobs authors 
found lacked a number of basic provisions and the flexibility needed to 
manage both family and work, a few authors (from both groups of working 
authors) describe some positive work experiences that made the 
difference between losing a job and keeping one. These authors describe 
a workplace that is family-friendly and willing to accommodate frequent 
interruptions in work to care for a child.

        Holding a job was very hard for two reasons. It was my weight 
        and the other was my son's disability. I would often need days 
        off for my son's doctor's appointments or even weeks if he was 
        hospitalized. I knew there wasn't an employer on this earth 
        that would be that flexible or understanding. So needless to 
        say, I lost a lot of jobs. Child care has always been my field 
        and the only jobs that I ever had . . . which brings me to 
        where I am today at a very family-oriented day care center 
        where they are very flexible to my situation and they help me 
        out a lot.--A 29-year-old mother of two from East Orange, New 
        Jersey. (NJ-3)

        I've worked at Food Lion for about a year and a half . . . The 
        management works with me because I have young children I care 
        for, so they work around my schedule. They give me time to find 
        someone to take my grandchildren so I can come in if they need 
        me.--A 55-year-old single mother caring for her two 
        grandchildren and working full-time as a baker at a local 
        grocery store in Raleigh. (NC-4)

    These positive examples of employers providing greater flexibility 
with time off and increased understanding of the challenges faced by 
transitioning workers appear to be an important influence on whether 
workers are able to succeed in the labor market. Thus far, however, 
there has been no real effort to provide incentives for employers to 
provide these kinds of benefits and flexibility. While having a policy 
influence in the private sector poses some serious challenges, a number 
of incentives could be developed such as providing tax credits to 
employers who provide provisions for such things as on-site day care 
and offer flexible scheduling for working parents.
    Flexibility is not enough, however. As the working poor status of 
the majority of authors in this study attests, most of their jobs 
simply do not offer a wage capable of sustaining a family, even when 
working full-time. Two strategies that can be pursued in tandem should 
be explored to address this wage reality. On the one hand, TANF should 
be expanded by allowing recipients to continue receiving assistance 
while they work. These wage supplements, known as Earned Income 
Disregards (EIDs), create both a strong incentive to work and ensure 
that employment provides a route to material security for families. 
Providing this kind of worker wage supplement will be addressed more 
thoroughly in the chapter on public benefits. A second and broader 
strategy attempts to address the issue of low-wage work in the economy 
as a whole by advocating for increases in the minimum wage and 
increases in the EITC benefit. Minimum wage laws have not kept up with 
the cost of living. If the minimum wage had kept up with its actual 
value in 1968, it would currently be $8.14. Current laws need to be 
raised and indexed for inflation. Currently, the level of $5.15 an hour 
cannot support a family of three above the official poverty line, with 
one adult working and assuming full-time, year-round employment, an 
assumption that this study shows applies infrequently to transitioning 
workers. Given that many poverty scholars consider the official poverty 
level far too low, a much higher wage is needed to provide a family-
supporting wage for welfare leavers and low-wage workers. Without 
addressing these problems of low-wage work, many families will find it 
difficult, if not impossible, to make the transition to work and become 
self-sufficient, an outcome that is contrary to the objectives of 
PRWORA and sound social policy.\9\
---------------------------------------------------------------------------
    \9\ For a discussion of the inadequacy of minimum wage laws and the 
federal poverty standard see Schorr (2001). A self-sufficiency standard 
developed by Diana Pierce at the University of Washington as part of 
the Family Economic Self-Sufficiency Project is a useful alternative to 
the federal poverty benchmark. The self-sufficiency standard used here 
incorporates many more factors than the current ``bread basket'' 
federal poverty formula. The self-sufficiency measures encompasses 
geographic location, taxes, age of children which reflect different 
level of costs, and costs associated with working, to come up with an 
income level needed by a family to be considered self-sufficient. The 
website can be reached at: http://www.sixstrategies.org/homepage.cfm
---------------------------------------------------------------------------
                            Recommendations
    1. Given the reliance on low-wage work, and the frequent inability 
of transitioning workers to work full-time, policies should be 
implemented that increase the earnings of workers and make it 
financially meaningful to leave welfare. Federal and state policy 
should be committed to reducing poverty and promoting work that 
provides for a family-supporting wage. Several policies can be pursued 
to ensure that employment and poverty do not go hand-in-hand and which 
make allowances for working parents. One approach is to increase the 
minimum wage and index it to inflation. Minimum wage levels have not 
kept up with the cost of living and the current level of $5.15 an hour 
cannot support a family. To that end we support HR 2812, Minimum Wage 
Restoration Act. In addition to increasing the base wage of workers, 
changes to the tax code that would count dependent child exemptions and 
credits for families who do not owe income taxes would further help to 
supplement workers' income.
    2. Expand the Earned Income Tax Credit. Currently EITC levels are 
capped at $4,000 for a family with two children and decline as income 
exceeds $12,500. Either the cap should be raised, or the level at which 
it begins to decline should be increased. The measure should also take 
into account family size. The 11 states that currently offer a state 
income tax EITC should make similar changes and states that do not 
currently offer the benefit should.
    3. Adopt a ``balanced work first'' approach that acknowledges that 
the current standardized system of job readiness with an emphasis on 
immediate employment is not appropriate for the majority of welfare 
recipients. This would require a reevaluation of the definition of work 
to include activities such as job training and post-secondary education 
and an easing of the federal work participation requirements. An 
increased emphasis on training and educational credentials is key to 
the twin goals of sustained employment and self-sufficiency under 
PRWORA.
    4. Provide incentives for states to implement a comprehensive 
tailored approach to job training which would require attainment of a 
GED for those without a high school diploma, needs assessment prior to 
training, and more targeted training. This approach would also offer a 
mix of education, job training, job search, and work that is connected 
to a particular type of employment. Follow-up and continued training 
must be part of the package. An important goal of the programs would be 
a commitment to family-supporting employment, not simply any job.
    5. While policy changes directed at increasing the wage and yearly 
income for low-wage workers are important, finding ways to address the 
competing demands of parenting and work are also important. This means 
acknowledging the much higher level of physical and mental impairments 
for this group of working parents and their children. One approach that 
moves in that direction is to strengthen and expand the Family and 
Medical Leave Act so it applies to smaller businesses and to workers 
who have worked less than 12 months. In addition, states should be 
allowed to link the FMLA benefit to their unemployment trust fund 
program or similar program. To that end, we support HR 226, Family 
Income to Respond to Significant Transitions Insurance Act. Expanding 
FMLA in this way would help low-income parents who must take time off 
to care for a child or parent by providing a needed income supplement.
    6. Make it a national goal to promote a family-friendly work 
environment. Provide tax incentives to employers who offer flexible 
work scheduling for families, on-site daycare, health care, and other 
provisions and forms of leave. TANF funds can be used in various ways 
to provide these incentives to employers who hire TANF recipients.
    7. Expand the wage supplements known as Earned Income Disregards 
(EIDs) to help to create a strong incentive to work and ensure that 
employment provides a route to material security for families. Access 
to worker supports such as Medicaid, food stamps, childcare subsidies, 
and other benefits for TANF leavers and other low-income workers should 
also be expanded. And states should add post-employment supportive 
services such as job training and retention. Finally, TANF should 
remain available to all workers as a safety net. TANF is a vital 
protection against unemployment, disability or when family 
responsibilities interfere with work for wage earners. To ensure TANF 
is able to provide this needed role, the percentage of caseloads that 
can be exempted from 5-year time limits should be expanded to reflect 
the need of current recipients.

                                

                         American Association of Community Colleges
                                               Washington, DC 20036
                                                      March 8, 2002
The Honorable Wally Herger
Chairman
Subcommittee on Human Resources of the Committee on Ways and Means
B-317 Rayburn House Office Building
Washington, DC 20515
    Dear Chairman Herger:
    The American Association of Community Colleges (AACC) represents 
more than 1,100 public and private, regionally accredited two-year 
institutions of higher education. On behalf of AACC, I hereby submit 
our statement for inclusion in the printed record for the March 7 
hearing on the implementation of welfare reform work requirements and 
time limits. We should say at the outset that we believe that the 
implementation of the welfare work requirements was flawed from the 
start, because the law provided most of its incentives for job 
placement and few for education and training.
    The Personal Responsibility and Work Opportunity Reconciliation Act 
(PRWORA), the 1996 welfare reform law, dramatically changed federal-
state welfare programs designed to aid low-income American families. It 
replaced the entitlement to cash welfare benefits with a new state 
block grant, the Temporary Assistance to Needy Families (TANF) program, 
to provide flexible funding to states to operate welfare programs to 
achieve certain goals--the primary one being to end long-term 
dependency. To that end, and with strong federal inducements, states 
dramatically reduced their welfare caseloads and met their work 
participation rates largely by placing recipients into readily 
available low-wage service-sector jobs.
    The federal law's design effectively left states with few options 
to address their welfare caseloads. Allowing recipients to engage in 
educational activities, namely vocational education, was one method 
available under the law for states to meet the work participation 
requirement. However, PRWORA restricted participation in this activity 
to 12 months and prevented states from using federal funds to support 
welfare recipients in this activity beyond that time.
    Many responded to the spirit and letter of welfare reform by 
emphasizing work above all, in spite of other options permitted by law. 
For instance, a study conducted by the Coalition for Independence 
through Education (CFITE) revealed that Michigan's state welfare 
agencies discouraged education by stating it was ``not a priority, or 
was not encouraged or supported by the state.'' CFITE's study noted 
that recipients often were not given information about allowable 
education activities and, after legislative changes to Michigan's 
policy supposedly ensured they would, caseworkers continued to provide 
inaccurate information about the state's policy. Another way the state 
discouraged education was through the withholding of child-care 
assistance to those in school. The survey cited one recipient who was 
receiving childcare assistance while in school: ``. . . my caseworker 
was switched. Then they cut me off with no notification. I had to call 
. . . to get a vague answer, `It was a mistake and you should have 
never received any kind of payment for child-care while attending 
college'.'' It is evident that TANF recipients viewed the loss of 
assistance as too high a price to pay for getting an education. CFITE's 
report clearly showed that Michigan, like many other states, felt it 
had little incentive to also promote education as a path to self-
sufficiency although the law permitted participation in this activity.
    It is evident that the law's stated limits on educational activity 
has caused states to adopt the work-first approach implicit in PRWORA. 
Although states technically have significant flexibility in how they 
design their welfare reform programs, they share a common thread 
concerning limits to education and training activities. By its design 
and threat of punitive action, i.e., the loss of federal funds, PRWORA 
dissuaded states from utilizing any other approach besides work first 
or, in many cases, work only.
    AACC believes this situation can be corrected by lifting the 
disincentives on states that want to use education and training 
opportunities as a component of welfare reform. The evidence abounds on 
the positive impact education has on future job and income prospects. 
Therefore, it should be an option for TANF recipients who want to make 
a better life for themselves and their families.
    Our association would welcome the opportunity to share these and 
other thoughts with you at length at an appropriate time. We appreciate 
your engagement on these critical issues.
    Thank you for extending us the opportunity to share our comments 
with the committee.
            Sincerely,
                                                    George R. Boggs
                                                  President and CEO

                                

            Statement of the Center for Women Policy Studies
    The Center for Women Policy Studies offers the following comments 
to the Subcommittee on Human Resources in preparation for 
reauthorization of the Temporary Assistance for Needy Families (TANF) 
program, established by the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996.
    The Center for Women Policy Studies is a multiethnic and 
multicultural feminist policy research, analysis and advocacy 
organization which brings women's diverse voices to important public 
policy debates--on women and AIDS, violence against women and girls, 
welfare reform, access to health care, educational equity, employers' 
work/family and workplace diversity policies, reproductive rights and 
health, and many other critical issues.
    The Center for Women Policy Studies urges Congress to pass a 
reauthorized TANF that focuses on poverty reduction as its long term 
goal. While we agree that employment is the key to achieving economic 
independence, we believe that a short-sighted focus on low wage and 
insecure ``work'' at all costs cannot ``end welfare as we know it'' or 
lift low income families out of poverty. Indeed, as many leavers' 
studies demonstrate, TANF recipients who leave the rolls for low-wage, 
dead end jobs remain mired in poverty and often return to public 
assistance (National Campaign for Jobs and Income Support, 2001). In 
contrast, programs for welfare recipients which allow both education 
and work activities have generated positive outcomes (Holzer and 
Wissoker, 2001; Greenberg, Strawn and Plimpton, 2000). However, it is 
essential that these education activities are not limited to on-the-job 
training or short stints of vocational education. The Center 
particularly urges Congress to follow the lead of several states and 
ensure that the reauthorized TANF statute explicitly allows states to 
provide access to postsecondary education for women TANF recipients.
    The Center has examined the role of postsecondary education in 
helping low income women lift themselves out of poverty since 1988. We 
look forward to working with the Subcommittee on Human Resources on 
TANF reauthorization and will be pleased to share with the Committee 
the research and policy analyses that the Center, our colleagues in 
other research institutions, and the state legislators with whom we 
work nationwide have conducted.
    In the United States, education has always been a route to economic 
self-sufficiency and social mobility, as demonstrated by the long term 
success of the GI Bill, for example. Every president for the last 20 
years has stressed the importance of education for everyone in America. 
Education cannot stop at high school because, in the 21st century, at 
least one year of postsecondary education is essential for all workers. 
And yet, TANF does not extend our nation's commitment to educational 
opportunity to women who are living in poverty with their children. 
However, many women on welfare are ready, willing, and able to benefit 
from postsecondary education; indeed, 53 percent of women AFDC 
recipients in the years preceding TANF were high school graduates or 
had earned GEDs (Center for Women Policy Studies, 1998).
    Data from several studies have demonstrated that the additional 
earning capacity that a postsecondary education provides can make the 
difference between economic self-sufficiency and continued poverty for 
many women TANF recipients. Among families headed by African-American 
women, the poverty rate declines from 51 percent to 21 percent with at 
least one year of postsecondary education. Among families headed by 
Latinas, the poverty rate declines from 41 percent to 18.5 percent with 
at least one year of postsecondary education. And among families headed 
by white women, the poverty rate declines from 22 percent to 13 percent 
with at least one year of postsecondary education (Center for Women 
Policy Studies, 1998).
    Studies in several states have found that postsecondary education 
not only increases women's income, it also raises their self esteem, 
increases their children's educational ambitions, and has a dramatic 
impact on their quality of life. Further, the children of these newly 
educated mothers are more likely to take education seriously and aspire 
to go to college themselves (Center for Women Policy Studies, 1998).
    Now, more than ever, TANF recipients need postsecondary education 
to obtain the knowledge and skills required to compete for jobs that 
pay a living wage, provide health and other benefits, and enable women 
to lift themselves and their children out of poverty in the long term. 
Without some postsecondary education, most women who leave welfare for 
work will earn wages far below the federal poverty line, even after 
five years of working. But allowing TANF recipients to attend college, 
even for a short time, will improve their earning potential 
significantly. In fact, the average person who attends a community 
college--even if she/he does not complete an associate's degree--earns 
about 10 percent more than her/his counterparts who do not have any 
college education (Center for Women Policy Studies, 1998).
    Moreover, women who receive assistance clearly appreciate the 
importance of postsecondary education in their struggle to improve 
their lives and their children's lives. The Center's recent qualitative 
research with women TANF recipients from the Washington, DC 
metropolitan area demonstrates their ambition and commitment to hard 
work. Study participants were eager to leave TANF as quickly as 
possible--but they also wanted to leave poverty and create a stable 
lifetime career. They understood that a college education was the most 
important strategy to move them from welfare to economic self-
sufficiency. One participant clarified this mission and reflected what 
several others said: ``I've got to go to college so I can get this 
degree, so I can get off of TANF, so I can provide for my family and 
get a decent job to provide for my children.'' (Wolfe and Tucker, 
2001).
    The Center for Women Policy Studies strongly urges Congress to 
respond to the leadership shown by many states by ensuring that the 
reauthorized TANF program includes postsecondary education in the list 
of allowable work activities. In addition, for TANF recipients enrolled 
in a postsecondary education program, both their participation in a 
campus work study program and a reasonable amount of study time should 
be classified as work activities. Finally, federal law should allow 
states to extend TANF recipients' time limits if they are participating 
in a postsecondary education program; states should be able to ``stop 
the clock'' for TANF recipients to ensure that they do not have their 
assistance withdrawn before they can achieve the long-term economic 
security that postsecondary education can provide and that welfare 
reform should encourage.
    Despite the TANF program's overwhelming focus on immediate work 
participation and decreasing welfare caseloads as indicators of 
success, many states have attempted to support women's efforts to 
achieve long-term economic independence through pursuit of a 
postsecondary education. Congress must not take away from states the 
flexibility to provide the most opportunity to their citizens.
    In our recent study of states and postsecondary education, we found 
that, of the 32 states whose efforts we reviewed in depth, 29 states 
allowed postsecondary education either alone or in combination with 
work, to be considered as an allowable TANF work activity. Several 
states have amended their state welfare laws to specifically allow 
postsecondary education as an allowable work activity under TANF 
(California, Illinois, Kentucky, Maryland, New York, and Ohio, for 
example). Other states have created separate state programs using their 
Maintenance of Effort (MOE) funds to allow TANF recipients to engage in 
postsecondary education without the limitations of the federally 
mandated work and time limit requirements (Maine, Texas, and Wyoming, 
for example). Others encouraged a combination of postsecondary 
education and allowable work activities (including Delaware, New 
Jersey, and Wyoming, for instance) or operated under a federal waiver 
to allow college to count as an allowable work activity (Ohio, Texas, 
and Vermont) (Center for Women Policy Studies, 1999; forthcoming, 
2002).
    Such state programs as the Maine ``Parents As Scholars'' (PAS) 
program have served as models for other states to emulate. Parents As 
Scholars allows eligible low-income Maine residents to receive cash 
benefits and supportive services if they are enrolled in an 
undergraduate two or four-year college degree program. The amount 
received from the Parents as Scholars program is equivalent to the 
amount the recipient would have received under TANF. Recipients must be 
pursuing a postsecondary educational program designed to lead to 
employment which will significantly improve their ability to become 
self-supporting. Several other states, including Texas, New Hampshire 
and Washington, have developed or are seeking to develop programs 
modeled on the PAS program.
    A recent study conducted on behalf of the Alliance for Family 
Success details the positive outcomes of PAS scholars. The study found 
that PAS graduates increased their wages by nearly 50%, compared to 
TANF recipients who left TANF without obtaining postsecondary 
education. In addition, they are more likely to find jobs with good 
benefits. PAS participants generally perform very well in college. 
Moreover, obtaining a college education improves self esteem and 
provides a sense of accomplishment. Finally, the benefits of 
participation in the Maine PAS program extended to the families of 
participants. Their children raised their aspirations, and attended 
college like their mothers. (Smith, Deprez, and Butler, 2002)
    The Center for Women Policy Studies applauds the leadership of 
these states and strongly urges Congress to include postsecondary 
education as an allowable work activity in the reauthorized TANF.
References
    Center for Women Policy Studies. 1998. Getting Smart About Welfare: 
Postsecondary Education is the Most Effective Strategy for Self-
Sufficiency for Low Income Women. Washington, DC.
    Center for Women Policy Studies. 1999. Getting Smart About Welfare: 
State Legislators Action Kit. Washington, DC.
    Greenberg, M, Strawn, J. & Plimpton, L., 2000 State Opportunities 
to Provide Access to Postsecondary Education Under TANF. Washington, 
DC: Center for Law and Social Policy.
    Holzer, Harry & Wissoker, Douglas. 2001 How Can We Encourage Job 
Retention and Advancement for Welfare Recipients? Urban Institute 
Series, ``New Federalism: Issues and Options for States.''
    National Campaign for Jobs and Income Support. 2001. Leaving 
Welfare, Left Behind:
    Employment Status, Income, and Well-Being of Former TANF 
Recipients. Washington, DC.
    Smith, R., Deprez, L. & Butler, S. 2002. Parents As Scholars: 
Education
    Works, Alliance for Family Success.
    Wolfe, L.R. & Tucker, J. 2002, ``Clipping Our Wings'': The Impact 
of Welfare Reform on the College Aspirations of Low Income Women. 
Washington, DC: Center for Women Policy Studies.

                                

   Statement of Sharon M. Dietrich, Community Legal Services, Inc., 
                       Philadelphia, Pennsylvania

 Many Welfare Recipients Could Not Meet TANF Proposals for 40 Hours of 
                                  Work

Introduction
    TANF Reauthorization proposals put forward by the Bush 
Administration and others would require the states to engage a high 
percentage of their welfare recipients in work activities for an 
average of 40 hours every week for the states to continue to receive 
their full TANF block grant.\1\ Based on our experience and those of 
other Pennsylvanians familiar with welfare-to-work implementation in 
our state, Community Legal Services, Inc. (CLS) believes that the 40 
hour requirement is not attainable and is the most problematic feature 
of the Administration proposal.
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    \1\ The work participation rate would increase from 50% to 70% by 
FY 2007. Meanwhile, the caseload reduction credit would be completely 
phased out, except for a very limited credit in which persons leaving 
welfare for work would count for three months. The upshot of these 
changes would be that 70% of TANF recipients would have to engage in 
work activities 40 hours a week by FY 2007. Twenty-four of the 40 hours 
would be in ``work"; the other 16 could be in other specified 
activities. States would receive pro-rata credit for persons who met 
the 24 hour work benchmark but did not the 40 hour goal.
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    The notion that TANF recipients are only being asked to match the 
number of hours routinely worked by other workers is superficial and 
erroneous. Many workers, even those who are considered ``full-time,'' 
work fewer than 40 hours. Full-time workers typically are credited for 
paid time during which they do not work, including breaks, holidays, 
vacations, sick days and personal days--accommodations that do not 
appear in the 40 hour proposals for welfare recipients. Workers of all 
types miss work for a wide variety of reasons, resulting in far fewer 
than 40 hours worked. Research shows, and our experiences have been, 
that TANF recipients (and other low wage workers) are particularly 
likely to miss work, because they face more family and other demands 
that conflict with work and have fewer resources to deal with these 
demands. In our experience, many TANF recipients who are working to 
capacity cannot meet even the current 30 hour goal.
    The consequences of requiring TANF recipients to average 40 hours 
of work activities every week would be severe and counter-productive. 
Even a person averaging 39 hours a week of work activities would count 
against the state's compliance with its work participation rates if the 
one missed hour was in ``work.'' People doing their best to work would 
nevertheless be sanctioned off the caseload by states struggling to 
meet the unrealistic goals. The costs to the states of providing 40 
hours of work activities would be staggering, especially in providing 
child care subsidies. The work participation rate regime would not 
focus on good employment outcomes. Even policymakers who are ``pro-
work'' for TANF recipients should not support such a problematic 
proposal.
The 40-Hour Requirement Is Not Realistic
    The justification advanced for the 40-hour requirement for TANF 
recipients is that they should be expected to work no less than their 
counterparts who do not receive cash assistance. This rationale is 
flawed, because many workers considered full-time do not work 40 hours 
every week. There are many legitimate reasons why workers of all sorts 
work fewer than 40 hours and must miss work.

       American Workers Do Not Regularly Work 40 Hours Every Week

    ``Full-time'' workers may work 35 hours per week. Of course, some 
full-time employees do work 40 hours or more in a typical week. 
However, many workers considered full-time work fewer than 40 hours. 
The Bureau of Labor Statistics (BLS) considers 35 hours the benchmark 
of full-time work.\2\
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    \2\ See, e.g., Annual Average Table from the January 2001 Issue of 
Employment and Earnings, Tables 19-23, from the Monthly Labor Review 
Online, December, 2001, Vol. 124, No. 12, available at ``http://
www.bls.gov/cps/cpsaatab.htm.''
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    These hours include paid time not worked. When measuring hours 
worked, BLS includes hours paid for holidays, vacations, sick leave, 
and other compensated leave.\3\ From what is known of the 
Administration proposal and from TANF implementation to date, there is 
no reason to expect that TANF recipients expected to meet the 40 hour 
requirement will receive credit comparable to paid leave days when they 
miss work.
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    \3\ BLS Handbook of Methods, Chapter 2, available at ``http://
www.bls.gov/opub/hom/homch2--b.htm.''
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    A substantial number of employees work fewer than 35 hours per 
week. According to BLS's annual data for 2001, 24.1% of employees work 
fewer than 35 hours. 16.5% work fewer than 30 hours.\4\ Among single 
women, 37.3% work fewer than 35 hours.\5\
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    \4\ Annual Average Table from the January 2001 Issue of Employment 
and Earnings, supra note 2, at Table 19.
    \5\ Id. at Table 22.
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    Hours worked vary between sectors. According to BLS data, average 
weekly hours vary depending on the sector of the labor economy. For 
instance, in manufacturing, average weekly hours have exceeded 40 hours 
every month since January 1992. By contrast, the service sector 
typically averages below 33 hours per week, and the retail sector 
averages 28-29 hours per week. Former welfare recipients are much more 
like to find work in the service and retail sectors than the 
manufacturing sector.

Workers Miss Time for Many Reasons, and TANF Recipients Are Especially 
             Likely To Have Legitimate Reasons to Miss Work

    Workers do not perform their jobs in a vacuum. They have family and 
personal needs that frequently require them to miss work. TANF 
recipients have the same needs to miss work as other workers. 
Additionally, their absences from work are exacerbated by their typical 
status as single parents, their lack of resources to deal with non-
work-related problems, and demands disproportionate or unique to poor 
people (such as dealing with bureaucracies).
    Caregiving obligations. In a ground-breaking study based on 
interview of more than 7,500 caregivers, Dr. Jody Heymann examined the 
obligations of American workers to provide for the health, educational 
and other needs of children, parents, and other adults in their 
care.\6\ Her national findings were that in the week of the interviews, 
30% missed at least one day of work to meet the needs of family 
members, 12% missed two or more days, and 5% missed three or more.\7\
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    \6\ Jody Heymann, The Widening Gap: Why America's Working Families 
Are in Jeopardy and What Can Be Done About It (Basic Books 2000). Jody 
Heymann, M.D., Ph.D, is on the faculty of Harvard University and 
Director of Policy for the Harvard University Center for Society and 
Health. Among the principal sources of data for her book are the Urban 
Working Families Study, a national Daily Diaries Study, the U.S. 
Department of Labor's National Longitudinal Survey of Youth, and the 
Survey of Midlife in the United States. Combined, the studies involved 
interviews of more than 7,500 caregivers across the country and 
included multiyear follow-ups. Id. at 7.
    \7\ Id. at 24.
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    Dr. Heymann learned that children were not the only family members 
for whom caregivers were required to cut back their working hours. 
While 42% of absences were to care for children, 15% were for parents, 
12% were for spouses or other partners, 7% were for grandchildren, and 
24% were for other family members.\8\
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    \8\ Id. at 27.
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    Moreover, Dr. Heymann discovered that the reasons that care is 
needed are varied.\9\ They included: Child care problems 22%;Elder care 
5%;Children's school needs 3%;Transportation for family members 
10%;Cope with a death 3%;Other support 31%.
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    \9\ Id. at 24. BLS data show that 20.7% of people working fewer 
than 35 hours per week, or 6.44 million adults, did so because of child 
care or other family or personal obligations. Annual Average Table from 
the January 2001 Issue of Employment and Earnings, supra note 2, Table 
20.
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    Dr. Heymann found that the situation is particularly bleak for low 
income workers, because ``they have both the most substantial problems 
and the most limited resources.'' \10\ She characterized low income 
parents as being in ``multiple jeopardy: single, with limited support, 
and without job benefits,'' a profile which fit 38% of low-income 
working parents in her national study.\11\ Among the challenges to low 
income workers that she identified were greater likelihood of child 
care problems;\12\ higher incidence of sickness and chronic health 
conditions among low income children;\13\ evening and night work and 
irregular schedules;\14\ under-resourced schools;\15\ and lack of money 
to pay for substitute care when needed (such as days a child is sick or 
school is closed).\16\
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    \10\ Id. at 117.
    \11\ Id. at 134.
    \12\ Dr. Heymann found that 33% of caregivers with income below 
125% of poverty had to miss hours from work because of child care, 
compared to 21% of middle and upper income persons. Id. at 28.
    \13\ Id. at 166.
    \14\ Id. at 166.
    \15\ Id. at 131.
    \16\ Id. at 132.
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    The demands on low income workers of providing care for disabled 
family members are particularly noteworthy. Dr. Heymann found that 41% 
of mothers on welfare for more than two years and 32% of mothers on 
welfare for two years or fewer had a least one child with a chronic 
health condition.\17\ With fewer financial resources for help, the 
working poor must provide the care themselves. Among those with a 
disabled child, 49% spent more than one working day a month providing 
care; 15% spent more than a 40 hour workweek per month. Caregiving 
demands for other disabled family members are similar.\18\ Moreover, a 
disabled child may have special educational needs as well as caregiving 
needs, requiring additional parental time at school and with 
homework.\19\
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    \17\ Id. at 124.
    \18\ Id. at 124-25.
    \19\ Id. at 74-87.
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    Sickness or disability of the worker. In addition to providing care 
for sick or disabled family members, the adult's own sickness or 
disability may require absences from work.\20\ Most higher income 
workers receive paid sick days in acknowledgment of this reality. But 
under an inflexible 40 hour a week standard, TANF recipients might be 
required to make up any missed days, extending their workweek beyond 40 
hours in a later period.\21\
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    \20\ BLS data shows that 759,000 adults working fewer than 35 hours 
per week did so because of health or medical limitations. Annual 
Average Table from the January 2001 Issue of Employment and Earnings, 
supra note 2, Table 20.
    \21\ We assume that making up time missed in one week in another 
week would be allowed and encouraged, because the Bush proposal (which 
is not in the form of a bill at the time of this writing) requires that 
families ``average'' 40 hours per week of work activities and 24 hours 
per week of work. However, the proposal is not explicit on whether 
hours can be made up in another week.
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    Ironically, under Title I of the Americans with Disabilities Act, 
an employer must allow an employee with a disability to work a modified 
or part-time schedule as a reasonable accommodation, absent undue 
hardship.\22\ If the 40 hour work requirement were to be enacted, that 
could create the incongruous situation where an employer would be 
legally required to modify its attendance requirements, but the TANF 
recipient could be found in non-compliance with the requirements of the 
TANF program. Moreover, under Title II of the ADA, the state TANF 
agencies have obligations to ensure that their policies do not 
discriminate against people with disabilities.\23\ Thus, an inflexible 
40 hour rule could also place the states in a legal quandary.
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    \22\ Equal Employment Opportunity Commission, Enforcement Guidance 
on Reasonable Accommodation (eff. March 1, 1999), Q&A 22, available at 
http://www.eeoc.gov/docs/accommodation.html#12 (citing Ralph v. Lucent 
Technologies, Inc., 135 F.3d 166, 172 (1st Cir. 1998)).
    \23\ See, e.g., Prohibition Against Discrimination on the Basis of 
Disability in the Administration of TANF (Temporary Assistance for 
Needy Families), Office for Civil Rights, U.S. Department of Health and 
Human Services, January, 2001 (``the OCR ADA guidance''). It can be 
found at http://www.hhs.gov/ocr/prohibition.html.
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    The worksite is closed. A typical reason for closing is a holiday. 
At CLS, where we host ``transitional workers'' who are TANF recipients, 
our offices are closed for holidays at least once every month from 
September through February. Under a strict 40-hour policy, our 
transitional workers would not only not get paid for these holidays, 
but would have to find a way to add hours (at a time that our office is 
not open for business) to make them up, to avoid losing their cash 
assistance.
    Mandatory court appearances and jury duty. In our experience, low 
income clients are particularly likely to have court involvement, such 
as child welfare system cases, domestic violence hearings (to obtain 
and enforce protection from abuse orders), and support matters 
(particularly because child support cooperation is a TANF requirement). 
These court appearances will conflict with day-time work schedules.
    The Philadelphia Unemployment Project (one of our group clients) 
assisted a participant in the Work Opportunities paid work experience 
program who was expelled for attending mandatory jury duty to which she 
was summoned. This is an example of the consequences of rigid work 
attendance policies.
    ``Poor people's shuffle.'' In addition to court appearances, low 
income workers often deal with bureaucracies that demand their 
attendance during work hours and often require them to wait for hours, 
such as public housing authorities and the welfare office itself. In 
her study, Dr. Heymann relates the story of a low wage father who 
decided to go with less food for his family rather than missing work to 
go to the welfare office to fill out papers for food stamps.\24\
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    \24\ Heymann, supra note 6, at 120.
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    Family tragedies. For low income people to experience tragedies--
children being incarcerated, houses burning down, deaths--is not 
unusual. The director of Philadelphia's Transitional Work Corporation 
reports that a number of participants in his program have had children 
who committed suicide. Parents living through these tragedies cannot be 
expected to keep up with a relentless 40 hour a week work schedule.
    Other typical reasons people miss work. Like other workers, low 
income workers are late to work or miss it because of transportation 
problems. Because they are more likely to use unreliable cars or public 
transportation, low wage workers have less control over these 
transportation problems.\25\ Like other workers, low wage workers 
occasionally must stay home to await the plumber or a public utility 
worker. But the 40 hour requirement would provide no flexibility to 
deal with such emergencies.
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    \25\ Our Philadelphia clients often travel to suburban jobs by 
public transportation. These commutes, which may require several 
connections, can easily take three hours a day. The commutes add to the 
time crunch that our clients experience, even when they work less than 
full-time.
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 Experiences in Pennsylvania in Hours Worked Among Current and Former 
                            TANF Recipients

    Our experience has been that our clients have been unable to meet a 
standard of 30 hours per week, much less forty hours. The Pennsylvania 
Department of Public Welfare (DPW) has tried to maximize hours worked 
by current and former TANF recipients by structuring its programs to 
require the hours benchmarks established by the TANF work participation 
rates. But in the face of the reality that many workers were unable to 
achieve these hours goals on a regular basis, DPW has modified its 
policies to build in flexibility.
    For instance, in February 1999, DPW established a 25 hour per week 
eligibility standard for persons not receiving TANF (many of them 
former TANF recipients) to receive subsidized child care. As a result 
of repeated incidents of parents not qualifying for the subsidies 
because of missed worked that dropped them below 25 hours pers week, 
DPW agreed to a policy change that recognized a limited number of 
temporary exceptions from the 25 hour requirement, for work missed 
because of disability, medical appointments, employer closings or 
domestic violence. Nevertheless, many parents continue to have 
difficulty meeting the 25 hour goal, leading advocates to press for 
reduction of the hours requirement back to the original goal of 20 
hours per week.\26\
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    \26\ A common reason that clients miss the 25 hour goal is that 
they are in jobs providing 20 hours per week of work, and they are 
unable to have their employer increase the hours.
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    Another manifestation has been attendance at the Transitional Work 
Corporation program (TWC), Philadelphia's highly regarded paid work 
experience program for TANF recipients. TWC was designed to require 25 
hours per week of paid work experience at work sites in government and 
non-profit jobs and 10 hours per week of ``professional development'' 
(training and career advising) at TWC's offices. TWC has consistently 
insisted that its participants, who have been screened as being among 
the ``hardest to serve,'' meet these attendance requirements, but many 
have been unable to do so on a regular basis. In a recent DPW audit of 
the hours of 20 TWC participants, only 80% of work site hours and 50% 
of professional development hours were met, despite the high quality of 
services offered at TWC.
    In conjunction with the DPW audit, TWC examined the reasons why its 
participants fell short of the 25/10 hours goals. Among its conclusions 
were the following.

           Because TWC is a 35 hour program, making up missed 
        hours is difficult.
           Because TWC works with the hardest to serve (persons 
        with multiple employment barriers), its participants have 
        difficulty with time and attendance. The program's challenge is 
        to identify the underlying causes for absenteeism and to work 
        with its participants to address these causes.
           Often when TWC participants are not in attendance, 
        they are dealing with barriers to employability that require 
        their attention during the workday, such as child care, 
        housing, domestic violence, or drug and alcohol addiction. It 
        is unfair to ask them to address these employment barriers and 
        then penalize them for not being at the program.
           Work sites that are closed for holidays create 
        problems in reaching the goals. Sickness among participants and 
        their family members were other common reasons for absences.

    During the summer of 2001, DPW announced a program called ``Time 
Out,'' pursuant to which TANF recipients who are engaged in work 
activities for 30 hours per week would be taken off the TANF 60-month 
time clock. Based on the DPW audit, not a one of the 20 participants 
whose time records were reviewed would qualify for Time Out if their 
actual hours were counted on a weekly basis, even though TWC provides 
35 hours per week of work activities. Along with complaints from 
advocates that too few persons in 30 hour per week work programs were 
qualifying for Time Out, the sharp focus brought to this issue by the 
TWC participants led to clarification by DPW that general compliance 
with the attendance requirements of a work program of 30 or more hours 
would qualify a TANF recipient for a Time Out. The reasoning is that a 
person without good cause would be sanctioned; so if a person below the 
hours goals remains in the program, they must have good cause for their 
absences.
    What our experiences in Pennsylvania show are that even the current 
30 hour goal is unrealistic for many--possibly the majority--of working 
TANF recipients. If the hours goals are to be adjusted from current 
law, the adjustment should be downward, not upward. Alternatively, the 
work participation rate regime must be flexible. Currently, the 
caseload adjustment credit provides states breathing room to not 
penalize their working TANF recipients who are doing their best. As in 
the case of Pennsylvania, it allows them to recognize ``good cause'' 
for not meeting the hours goal.
The Consequences of a Requirement that TANF Recipients Work an Average 
        of 40 Hours Per Week Are Counter-Productive.
    If an inflexible 40 hour work activity standard were incorporated 
into the TANF work participation rates, a de facto three-tiered system 
would be created for dealing with family and personal needs that are in 
conflict with work.

           Good jobs provide some paid time to deal with 
        sickness, vacation, and personal needs. They may also permit 
        job protection, through the form of unpaid leave, under the 
        Family and Medical and Leave Act.\27\
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    \27\ 29 U.S.C. Sec. 2601 et seq. (providing for up to 12 weeks of 
leave per year for parental leave and leave because of the worker's own 
serious health condition or that of a parent, child or spouse).
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           Bad jobs provide no paid time, but may allow a 
        worker to take unpaid time to deal with these problems.
           TANF work requirements would require a welfare 
        recipient to work 40 hours each and every week, or make up for 
        missed time. While a low wage worker without paid time loses 
        pay, a TANF recipient faces total loss of the safety net that 
        provides income for his or her family.\28\
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    \28\ This is in contrast to the unemployment insurance (UI) 
program. In Pennsylvania, a worker who is fired for attendance reasons 
receives UI benefits if there was good cause for the absence.

    The irony is that a TANF recipient may have the least capacity to 
adhere to a 40 hour per week schedule. As noted above, TANF recipients 
are primarily single parents, with few or no resources to deal with 
their caregiving and other problems. They may have the most barriers to 
employment (particularly those remaining on the caseload five years 
after welfare reform), and they need help to address their barriers, 
not an inflexible 40 hour requirement.
    The broader consequences of a 40 hour standard to the welfare 
system include the following.
    No flexibility for states to work with TANF recipients facing 
barriers. Given the structure of the work participation rate proposal, 
a person who does not average 24 hours per week of work would count 
against the state's compliance, even if engaged in 40 (or more) hours 
of work activities. Additionally, even a person meeting the 24 hours of 
work would not count fully for the state if his or her overall average 
of work activities were 39 hour or fewer. This rigid and demanding 
formula may be the worst possible manifestation of a ``one size fits 
all'' approach to welfare reform.
    People who are doing their best to work will be sanctioned. To meet 
their work participation rates, states will have no choice but to 
sanction off people who cannot work 40 hours per week, even if those 
persons are working to the best of their ability. If the states were to 
keep such people on their caseloads, their work participation rate 
compliance would be adversely affected.\29\
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    \29\ Conversely, the proposed formula creates a perverse incentive 
for states to keep on the caseload the people who are most able to work 
(and perhaps least needing of cash assistance), because they will count 
in the states favor. If the TANF time limit provisions do not change, 
this will harm working TANF recipients by using up their 60 months of 
benefits unnecessarily.
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    No connection to good outcomes. The goal of the work requirements 
should be to help TANF recipients to move towards self-sufficiency. 
However, the 40 hour requirement is a rigid ``work for work's sake'' 
requirement that is not connected to this goal.
    Providing 40 hours of activities is costly and difficult. Creating 
both work and other work activities will be very costly and time 
consuming for the states. Many states will need to develop a large 
scale work program that does not currently exist. Costly work supports, 
such as child care and transportation allowances, also must be 
provided. For both work programs and work supports, existing programs 
will need to be expanded by 25% capacity (to cover the jump from 30 to 
40 hours per week). These financial costs will be hard for states to 
meet with flat TANF funding. Moreover, they will divert resources from 
other priorities, such as helping former TANF recipients move towards 
self-sufficiency.
    Availability of work is ignored. There are no provisions for more 
lenient goals during period of high unemployment, such as the current 
recession, or in areas of high unemployment, such as Southwestern 
Pennsylvania.
The TANF Statute Currently Provides Enough Penalties and Incentives to 
        Maximize Work Activities.
    Pennsylvania's number of participants meeting the work 
participation rate for Fiscal Year 2000--11.2%--may be cited as 
evidence that the state has not been motivated to make its TANF 
recipients work. Nothing could be further from the truth.
    Pennsylvania dealt with the work participation rates by adopting an 
aggressive ``work first'' approach, in which TANF recipients were 
encouraged to become employed in unsubsidized employment and leave the 
cash assistance rolls as soon as possible. As a result, it has achieved 
a large caseload reduction credit. The state's caseload decline 
statistics are very revealing in this regard. Of almost 170,000 
families on the TANF caseload in February, 1997, when TANF 
implementation began, only around 9,000, or 5.3%, were on target to hit 
the five year time limit by the summer of 2001.
    Moreover, as has been noted, DPW designed several of its programs 
to have hours requirements that mirrored the hours required to meet its 
work participation rates. These include its work programs and its Time 
Out program, both of which require 30 hours a week of work activities.
    Finally, in addition to being pushed by DPW to maximize their work, 
TANF recipients in Pennsylvania have had positive incentives to 
increase work hours. The more time worked, the higher the person's 
wages and Earned Income Tax Credit, as well as the likelihood of 
participating in the Time Out program. Like other workers, TANF 
recipients are likely to want to maximize their income, to the extent 
possible.
Conclusion
    The work participation rate formula proposed by the Bush 
Administration and others is severely flawed. Many TANF recipients 
doing their best to work, given their competing non-work obligations, 
will not be able to meet the hours benchmarks. The states will face 
daunting challenges in both adequately serving their TANF populations 
and in complying with the work participation rates. More flexibility, 
not less, is needed in the TANF work participation rates.

                                

      Statement of Brendan Lynch, Community Legal Services, Inc., 
                       Philadelphia, Pennsylvania

 TANF Time Limits: TANF Clients Need More Than Five Years Of Assistance

    The experience of poor people in Pennsylvania under Temporary 
Assistance to Needy Families (TANF) offers a sobering reminder of the 
potential pitfalls of an absolute five-year time limit for federally-
funded welfare. The Pennsylvania Department of Public Welfare (DPW) 
implemented TANF on March 3, 1997, so that parents who received TANF 
benefits continuously since that time have recently begun exhausting 
their eligibility; thousands of parents will reach the five-year limit 
within the next twelve months. Pennsylvania's TANF parents have not yet 
experienced the after-effects of the lifetime limit under TANF, because 
the state has extended the deadline for time-limit terminations until 
this summer. The difficulties and setbacks encountered by so many 
recipients in their first five years demonstrate, however, that a 
strict time limit is an unrealistic expectation for a large portion of 
the caseload.
    Community Legal Services of Philadelphia, Inc. (CLS) works with 
low-income Philadelphia clients on a variety of problems, including 
public benefits. We represent and advise many TANF parents, and we work 
closely with community organizations that also reach out to low-income 
parents. Our experience has shown that parents in many different 
categories have serious barriers to self-sufficiency which cannot 
reasonably be resolved within five years. These TANF parents fall into 
two general groups: people who have long-term barriers to work, and 
workers who remain so poor that they receive a partial TANF grant. 
Although federal law permits states to exempt 20% of the caseload from 
the time limit, our research shows that this exemption is far too 
narrow; parents with serious barriers to self-sufficiency constitute a 
large portion of the caseload. Moreover, with a strong economy and new 
work incentives, people who are able to work have left welfare, and so 
the entire caseload at any given time has a higher proportion than 
formerly of parents who are unable to work. Long-term TANF recipients 
are much more likely to face serious barriers, and to need assistance 
beyond five years.
1. Many TANF clients have serious, long-term barriers to work.
 a. Disabilities or other personal barriers that prevent clients from 
                             keeping a job.
    Many TANF clients in Pennsylvania have disabilities that do not 
rise to the level of the Social Security disability standard, so that 
the clients do not qualify for Supplemental Security Income (SSI) 
payments. These disabilities nevertheless present an imposing obstacle 
to economic independence. Some clients have physical ailments; others 
suffer from low-level mental illness; many have a combination of 
afflictions, often compounded by self-medication through drugs and 
alcohol. These clients usually have great difficulty in finding work, 
and when they do find a job, they frequently cannot maintain it.
    The Pennsylvania Department of Public Welfare (DPW) has contracted 
with a number of organizations to perform outreach to clients who have 
difficulty complying with the department's requirements. One of these, 
Women's Association for Women's Alternatives, Inc. (WAWA), deals with 
approximately 140 clients in Philadelphia. All 140 have been found to 
be medically exempt from the work requirement by DPW, and WAWA sends 
case workers out to their homes to conduct detailed discussions about 
clients' problems and obstacles to self-sufficiency.
    Many of the exempt clients referred to an outreach program are so 
severely disabled that they will eventually qualify for SSI, which will 
remove them from the welfare caseload. Others, though, will never be 
able to obtain SSI. Patty McGlone, a case manager at WAWA, estimates 
that 30% of her organization's clients do not meet the SSI disability 
standard, even though DPW has found that they are unable to meet the 
TANF work requirement. This group of clients suffers from a range of 
disabilities, but either have been turned down for SSI or are unlikely 
to qualify for it within the next five years. Some WAWA clients have 
been diagnosed with post-traumatic stress disorder; others experience 
agoraphobia or panic attacks. Still other clients have back problems or 
arthritis, or are HIV-positive and feeling symptoms of full-blown AIDS.
    One TANF parent, D.D., is a 42 year old woman with two children who 
has been trying to find appropriate work for the past five years. She 
has been receiving TANF since March 1997, but the welfare office has 
not helped her to find a job that she can keep. She suffers from 
phlebitis, which causes severe pain without warning; her leg will 
become swelled and force her to rest, and on some days she cannot get 
out of bed at all. Extensive standing, walking, or other physical 
activity exacerbates the problem. D.D. is very unlikely to qualify for 
SSI based solely on phlebitis, but her condition is, nevertheless, a 
constant hindrance in her job search. She worked as a clerk for the 
Liquor Control Board for six months in 1997, for $6.00/hour, but she 
was forced to quit because the job involved cleaning and lifting boxes, 
and she was physically unable to perform the job's requirements. Since 
then, she has been searching for an entirely sedentary clerical job, 
but she is further hindered by her lack of a high school degree.
    D.D. describes herself as a ``go-getter,'' but her body limits the 
ways in which she can support her children. In 2001, she took the civil 
service exam as a clerk/typist, and she passed, but most recently she 
was #577 on the waiting list. Should her name come up, she will likely 
be further hindered by her lack of a General Equivalency Degree. D.D. 
is not considered exempt from the TANF work requirement by DPW, and so 
she has had to look for work, and attend job readiness programs, rather 
than focus on a program which would enable her to earn her G.E.D. and 
improve her chances of finding a clerical job. If she does find an 
appropriate job, she will need a sympathetic boss who will grant her 
accommodations on days when she is unable to come to work. D.D. 
emphasizes that she is ready and willing to work to support her 
children, but after five years on TANF, despite her steady efforts to 
find work, she still does not have the education, the networking 
skills, or the medical support that would enable her to leave the 
welfare rolls.
    A substantial proportion of our clients also face an array of other 
barriers which are virtually impossible to cure or fix within sixty 
months, especially while also meeting a work requirement. Some are 
illiterate, and thus cannot even fill out a job application, let alone 
perform the tasks required in most jobs. Learning to read and write, 
when one has been out of school for years, is a very difficult task, 
and usually must be accomplished before a parent can then go on to 
complete job training or job readiness programs; many TANF parents 
cannot do both within five years. The challenge becomes insuperable 
when illiterate clients must meet a work requirement, yet literacy 
education does not qualify as a work activity.
    Many other clients are immigrants or refugees who cannot speak 
English, and whose language barrier is compounded by an additional 
problem. Some are refugees from war zones, such as Cambodia or 
Ethiopia, who exhibit symptoms of post traumatic stress disorder. 
Others suffer from clinical depression, and have great difficulty 
finding adequate medical and psychological care in their native 
language, let alone a class in English for Speakers of Other Languages. 
For non-English-speaking TANF recipients who suffer disabilities, the 
only available jobs are often housekeeping or other physical tasks 
which do not require speaking, but which they cannot perform due to 
their physical limitations--if, after years out of school, they cannot 
become proficient in English, then almost no appropriate work is open 
to them.
            b. Serious household problems that prevent clients from 
                    finding work
    Many CLS clients have family members with full-time, all-consuming 
needs, such as paralyzed or incapacitated children, or elderly parents 
with schizophrenia or Alzheimer's. Disabled dependents present single 
TANF parents with overwhelming challenges, and it is simply unrealistic 
to expect that in less than sixty months, these parents will be 
prepared to leave their families at home. Disabled dependents typically 
require a caregiver to administer medications, monitor breathing, 
perform bathing and feeding, assist with stretching and physical 
therapy, stand ready for emergencies, and take them to all 
appointments, and full-time nurses are extremely expensive and often 
unavailable to low-income clients.
    Equally exhausting for many parents is the strain of arranging all 
of the necessary services and dealing with inevitable breakdowns in the 
support structure. Even parents who have obtained nursing care must try 
to track down a replacement on the many occasions when low-paid nurses 
fail to show up for their shift, and in the meantime the parent must 
stay home and perform all of the nurse's tasks. If the patient's health 
insurer denies approval of a medication, the burden falls squarely on 
the parent to contact the insurer, find out the reasons for the denial 
pressure the prescribing doctor's office to provide the necessary 
paperwork, and, in some cases, file a grievance and negotiate directly 
with the insurer about whether the medication will be approved. Each of 
these tasks frustrates able-bodied people when the occasional injury or 
illness temporarily becomes a problem; for parents with seriously 
disabled dependents, these tasks crop up almost constantly, with 
multiple providers serving the patient at all times.
    One CLS client, D.B., has four children with serious disabilities, 
and a fifth child for whom she has filed an SSI application. She found 
work on her own, at a paratransit company, but she continually had to 
leave work for a medical emergency with one of her children, and 
ultimately had to quit the job. When D.B. has been able to find child 
care providers, they have not lasted long, because they were quickly 
overwhelmed by the childrens' needs, especially one daughter's bad 
asthma attacks.
            c. Clients who cannot access the services they need
    Aside from the several groups of TANF recipients who are not able 
to achieve independence, there are many others who could find work and, 
perhaps, become financially independent if they were able to access 
employment support services that are ostensibly available to them. In 
our experience, however, the image of a perfect support system for TANF 
clients is a fantasy. Breakdowns in the system for needy people are 
closer to the norm than the exception. Any welfare law which presumes 
that all clients will receive all the necessary preparation for 
economic self-sufficiency within some fraction of five years rests upon 
a fundamental misconception about the actual lives of welfare 
recipients.
    In the experience of clients at CLS and related organizations, 
navigating the welfare system requires a complicated, time-consuming 
series of applications, referrals, trips to track down documents, 
reapplications, false starts, rejections, unanswered phones, and, 
ultimately, attempts to comply with an array of obligations from 
employer, training program, and case worker. Due to the nature of large 
bureaucracies with extensive client populations, with the huge 
potential for human or computer error, a substantial proportion of TANF 
clients find that, in welfare offices or training programs, phone calls 
are not returned, verification forms are lost, and requests for 
extensions or accommodations are improperly rejected.
    Of course, most working TANF clients are not frustrated at every 
opportunity, but only a small handful of things need go wrong before a 
client has been forced to withdraw from a training program, and even if 
these clients are eventually able to re-enroll, their TANF `clock' will 
not stop ticking, as they move closer to their five-year limit without 
having made any progress towards employment. Other clients belong in a 
different assistance program, such as SSI, but their difficulty 
navigating the system of applications, hearings, and appeals often 
results in lengthy TANF stays while waiting to be approved for SSI, and 
these clients risk termination of any public assistance without ever 
receiving benefits to which they are entitled.
    One CLS client, D.G., was on TANF for over four years and applied 
for SSI three times, but was turned down each time. She did not realize 
that she had the option of filing an appeal--she has extremely limited 
reading skills--and in any event, she was in no position to pursue an 
appeal by herself. DPW was not able to help D.G. get onto SSI, and she 
was beginning to approach her five-year lifetime limit when CLS won her 
SSI case. D.G. met the disability standard for SSI eligibility all 
along, but she was very nearly cut off of public assistance altogether 
due to her cognitive disability--the very reason for which she 
qualified for SSI.
    Patty McGlone, the WAWA case manager, reports that of the 140 
clients in her office, approximately 100 ought to qualify for SSI, and 
thus leave the welfare rolls, but even five full years into TANF, none 
of them have yet been approved for SSI, for a variety of reasons. Some 
WAWA clients, or their family members or advocates, were simply never 
alerted to which programs or offices were available to assist them, or 
were not informed how appropriate referrals to organizations such as 
WAWA should be made. Others seeking help with an SSI application from 
DPW were improperly turned away; amazingly, one client was turned down 
despite being comatose; his caseworker was told that the man would 
first have to apply on his own.
    Glitches in welfare administration are not limited to SSI 
applications. One client, who asked that she not be identified, was 
able to enroll in a four-week class in Philadelphia in July 2001, and 
the welfare office agreed to pay her tuition. Shortly after the class 
started, however, she had to miss three days when her son became ill 
with a severe asthma attack. She understood that she had missed too 
much of the class and would not be able to return, but was hoping to 
enroll in a later session and complete the class. Instead, DPW 
threatened sanctions, prepared to charge her for the class's cost, and 
demanded proof of her son's condition. Since she had remained home with 
her son, believing it was best that she be with him there, she could 
not produce a doctor's bill or hospital chart, although his attack was 
typical of what asthmatics frequently suffer. In the end, with our 
intervention, she avoided a large overpayment, but while dealing with 
DPW, she was unable to re-enroll in the class. Ideally, her word, and 
evidence of the boy's ongoing condition and of her genuine desire to 
finish the class, would have been accepted, and she would have signed 
up for a class session in the late summer or fall; instead, many months 
later, in March 2002, she was finally able to enroll in an entirely 
different class.
    The Pittsburgh City Paper reports that Carlene Poole, a TANF 
recipient since March 1997 with a diagnosed learning disability and a 
fifth-grade reading level, enrolled in at least six job readiness, job 
training, and remedial education programs, but found that the programs 
offered training that was too job-specific, and didn't address basic 
literacy or learning disabilities. Poole reported ``humiliating 
experiences'' in trying to fill out job applications. Finally, DPW 
allowed her to seek literacy training, but she only completed one year; 
although she found a program that addressed her most basic needs, she 
says, she was unable to get further state funding for her classes. Now, 
having taking some word processing training, she is seeking clerical 
work, but she wonders: ``what if when I get there my spelling and stuff 
is not good enough?'' \1\
---------------------------------------------------------------------------
    \1\ Julie Mickens, Clock Watching: No fare-thee-well yet for 
welfare clients at the state's five-year benefits cutoff, but are state 
promises too good to be true, Pittsburgh City Paper, Jan. 30, 2002, 
available online at http://www.pghcitypaper.com/nz13002.html.
---------------------------------------------------------------------------
    TANF clients must also deal with routine problems with support 
services which are outside the domain of the state welfare bureaucracy, 
but which are equally critical to clients' ability to pursue full-time 
work in the private economy. D.D., the client discussed above who is 
unable to maintain a job due to phlebitis and the lack of a G.E.D., has 
had trouble with private employers, health care providers, and the 
state welfare agency. She has probably never been treated properly for 
her phlebitis, because she has not had a regular relationship with a 
primary care doctor. Her medical coverage has been irregular, and in 
2001 she was cut off of cash and medical benefits for six months. She 
currently goes to a free public health center for checkups and 
treatment; and she appreciates their help, but it is difficult to see 
them--although she needed an appointment in February 2002, the next 
available appointment was in May.
    Irregular medical care has limited D.D.'s ability to obtain a 
G.E.D. and find clerical work. DPW referred her to a program in which 
she could obtain job training while also obtaining her G.E.D., but on 
the second day of the program, her phlebitis acted up and she could not 
get out of bed, let alone attend the program, due to the extreme pain. 
D.D. wants to attend the program and is hoping to go back, but the 
program directors are demanding an explanation for her absence on the 
second day, and she cannot re-enroll until she provides satisfactory 
proof. Naturally, she tried to obtain proof of her problems with 
phlebitis, but she cannot see a doctor before May, by which point her 
program slot will be moot. Eventually, she may be ready to re-enroll, 
but by the time D.D. obtains her G.E.D., her sixty months on TANF will 
have long since run out.
    The interaction of multiple problems in D.D.'s case is typical of 
many we have witnessed at CLS. D.D. did just what the welfare 
department asked her to do: she took charge of her job search, found a 
job as a clerk, put in lots of other job applications, took the civil 
service exam, enrolled in a job training program, and tried to see a 
doctor and get medical documentation when requested by the program. It 
is possible, though far from certain, that she could have obtained a 
full-time job by now, with the potential for raises and promotions, if 
she had been placed in a high-quality G.E.D. program at the outset of 
her time on TANF, if she had had regular medical coverage and a steady 
relationship with a doctor who could provide ongoing treatment for 
phlebitis and proof of her illness for employers, and if she had been 
placed in a good job training and placement program which helped line 
up appropriate clerical positions with sympathetic employers. Instead, 
D.D. encountered frustration, denials, and inappropriate job offers.
    D.D.'s case illustrates why five years is simply too brief for so 
many TANF clients: in the real world, support services aren't always 
available, training programs aren't always receptive, the right job_
even during a boom economy_isn't always hiring, and clients who appear 
work-ready on paper don't always have the ability, or the credentials, 
to move into full-time employment until the right supports and jobs are 
available.
    Other clients need even greater support than D.D., but receive only 
incompetent, uncaring, or simply uninformed responses. Most clients 
with drug or alcohol dependencies need inpatient treatment at a high-
quality residential facility, but the managed care organizations that 
operate the Medicaid system in the Philadelphia area will only approve 
a few hours a week for outpatient visits. A significant proportion of 
clients at CLS and WAWA have some form of mental illness, but the 
majority of mentally ill clients are not receiving intensive mental 
health treatment; some of them can do little better than visiting the 
doctor down the street from them, who prescribes medications despite no 
specific training in psychiatry, and does not provide a referral to a 
specialist. Others are referred to therapists, but discover that the 
therapists are either unable or unwilling to provide treatment, despite 
a formal diagnosis of mental illness.
    A lack of English proficiency is a serious barrier to employment 
for many immigrants, refugees, and others, including many Puerto 
Ricans. Unfortunately, DPW does not fund classes in English for 
Speakers of Other Languages, and the programs that are open to poor 
clients are of very low quality. Most ESL classes only offer 
instruction for three to five hours per week, which is not very useful, 
and is too slow a rate for people who are expected to be ensconced in 
middle-class employment in a year or two. We have also found that ESL 
classes presume that the student is literate in their native language, 
but many immigrants and refugees are illiterate even in their native 
languages. Moreover, many ESL classes evaluate their students' 
abilities improperly, and then provide only volunteer teachers without 
training in adult literacy education.
2. Many TANF clients do work, but do not earn enough to escape sub-
        poverty.
    In addition to the TANF clients who are unable to work, CLS has 
worked with many others who exemplify the ideal TANF client under the 
`work first' philosophy embodied in the TANF Act and Pennsylvania's own 
welfare reform law: they can, and do, seek work, and they strive to 
stay in their jobs once they have found them. The media have relayed 
the stories of some such clients who have found jobs, earned promotions 
and raises, and achieved financial independence. Less attention has 
been paid, however, to the thousands of other recipients who try to 
maintain jobs but are unable to, or who stay in jobs and work programs 
for long stretches and still make so little that they remain on the 
welfare rolls. A close look at the data suggests that those 
Pennsylvania welfare recipients who were able to work were leaving the 
rolls without encouragement from TANF work rules, and that their less 
employable neighbors will need more time than five years to prepare to 
follow them into full-time work at a sustainable wage.
    Evidence in Pennsylvania suggests that the strong economy, rather 
than the work rules, time limits, and incentives of TANF, was the 
primary reason for the dramatic decline in the caseload over the past 
several years. According to DPW's own figures, the rate of decline in 
Pennsylvania's TANF caseload increased only slightly in the year after 
implementation of TANF in March 1997, and it has slowed sharply since 
then. The caseload declined by 13.4% from March 1996 through March 
1997, well before any AFDC client had heard about future welfare 
reform. In the following year, through March 1998, the caseload dropped 
by 15.4%. If TANF rules were primarily responsible for the drop in the 
welfare population, then in subsequent years, as DPW called more people 
into the welfare district offices for meetings to discuss the new time 
limits and obligations, and older recipients took advantages of 
increased incentives, the rate of decline should have increased. 
Instead, the statewide caseload only declined by 12.2% between March 
1998 and March 1999. The state did not begin to require that nonexempt 
recipients work for twenty hours per week--the heart of the TANF 
program--until after March 1999, since the work requirement only 
applied after the first twenty-four months of benefits, but the number 
of people leaving the welfare rolls slowed dramatically after the work 
requirement was imposed: the caseload dropped by 8.8% in the twelve 
months ending in March 2000; and by just 4.4% between March 2000 and 
March 2001. As the five-year time limit approaches for the first cohort 
of recipients, the caseload is actually increasing--it rose by two-
tenths of a percent between March 2001 and January 2002. Overall, in 
the three years between March 1996 and March 1999, Pennsylvania's TANF 
caseload declined by a total of 40%; in the almost three years since 
March 1999, when the work requirement was imposed, the caseload has 
only declined an additional 13% from the level of March 1996.
    The data reflect our experience here at CLS: some clients leave 
welfare for work when the economy is strong and they can find work 
commensurate with their education and skills, but in an economic 
downturn, fewer of them can find such jobs. These clients were already 
leaving the welfare rolls in January 1996, and the work requirement 
probably had very little effect on them. Many other clients, meanwhile, 
do not have the skills, education, physical and mental abilities, or 
support structures and resources to find and keep jobs that will keep 
them out of sub-poverty. Some of them, with long-term disabilities or 
other barriers, have not found jobs in five years, because full-time 
work is simply not possible, and no threatened cutoff of cash is a 
relevant incentive. Another group of clients has tried to find work, 
but have either found such low wages or few hours that they still 
qualify for a partial TANF grant, with incomes 33% below the federal 
poverty level, or else have not been able to find work at all, despite 
their cooperation with work and training programs.
    Teresa Battle, a CLS client, has had an all-too-common experience. 
She is eager to work, and she has a high school diploma, but she has 
been forced to raise three children by herself, including a son with 
major depression and attention deficit-hyperactive disorder. She has 
sought training, and has completed every activity to which she was 
assigned, even seeking work when she could have just gone through the 
motions as volunteer program. Nonetheless, she finds herself just a 
year away from her lifetime limit and unable to get a job.
    Starting in August 1999, Battle completed a full six-month program 
of paid work experience in Philadelphia. Unfortunately, though she had 
been told that she would receive training as a security guard, the work 
consisted of receptionist's tasks, which she was not able to benefit 
from, because they involved typing and computer skills in which she had 
not been trained. When she completed the program in February 2000, she 
began sending out job applications, but she had great difficulty 
finding an appropriate job, because with her skills, jobs during the 
day were hard to come by, and she could not find anyone willing to 
provide child care for her three children during an overnight shift. 
She decided to enter the military, so she left TANF and enlisted in the 
service in June 2000, but her son's condition worsened, and she was 
forced to leave the service in March 2001, with an honorable discharge, 
when he was hospitalized, and then was placed in a outpatient program 
requiring daily treatment.
    Since March 2001, when Battle reapplied for TANF, she has sought 
more work experience at the Transitional Work Corporation, but she has 
been turned down because DPW imposes a six-month lifetime limit on 
participation in paid work experience. As a result, in order to receive 
benefits, she has had to perform unpaid community service and pursue an 
independent job search; she has continued to file job applications, but 
reports that jobs are currently scarce. Battle has taught herself to 
type, but she finds that employers want people who are familiar with 
Excel, mail merge, and other more advanced computer functions; 
ironically, T.W.C. offers training in those functions, but she cannot 
get into the program. Thus, despite serving her country, performing 
work experience and requesting more, teaching herself to type, and 
performing everything asked of her by the welfare department, Battle 
cannot find a job that will enable her to earn enough to support a 
household of four, while leaving enough time to care for her disabled 
son and his two young siblings.
    Another woman, who contacted Congreso de Latinos Unidos and asked 
that her story be used to publicize the darker side of welfare reform, 
found work at a dress store. She stayed with the job, despite several 
children to care for, and she worked her way up to assistant manager, 
but her wages were still so low that her family still qualified for a 
partial TANF grant. Her experience has been all too common in 
Pennsylvania. The Maternity Care Coalition (MCC), a Philadelphia 
organization that provides health education, nutrition, and other 
family support to low-income mothers, most of whom receive TANF, has 
found that many ``low-income families who are trying to transition from 
welfare to work . . . lack the requisite skills and work experience for 
employment at a family-sustaining wage.'' The MCC concludes that ``TANF 
should allow for low wages plus cash benefits to ``not be counted'' 
against the 5-year time limit.''
3. A high proportion of the caseload has serious barriers to self-
        sufficiency.
    DPW's research on the TANF population in Pennsylvania demonstrates 
that two general groups, sub-poverty workers and people with long-term 
barriers to work, add up to well more than 20% of the caseload. As more 
work-ready people leave the rolls, this percentage is likely to 
increase, since barriers are disproportionately concentrated among 
people who stay on TANF long term and approach their lifetime limit. In 
the future, as people who cannot get off of TANF are joined by people 
who left briefly but could not remain off, this group of long-term 
recipients will constitute a higher and higher proportion of total 
caseload.
    Last year, DPW compiled a detailed demographic chart of the adults 
on the TANF rolls as of March 3, 2001. At that point, 60,027 total 
parents receiving TANF. (As of December 2001, there were 59,893 
parents, and the caseload was rising, so these figures are likely a 
very accurate summary of the current TANF population.) DPW's March 3, 
2001 demographic chart shows that parents with barriers to self-
sufficiency are a very large segment of the total caseload, and well 
over one-fifth from any perspective. It also demonstrates that these 
barriers are heavily concentrated among the long-term clients in the 
``June 2002 cohort''--the group of parents who were on schedule to be 
the first to use up their five-year lifetime TANF eligibility, between 
March 3, 2002 and June 30, 2002. There were 12,112 total parents in the 
June 2002 cohort.
    For example, disabilities and other recognized barriers to work 
were prevalent among far more than one-fifth of the caseload. DPW 
granted exceptions to the work requirements for disabilities, caring 
for infants, unavailability of child care, or other good cause to a 
total of 19,645 parents, or 33% or caseload. In the June 2002 cohort, 
the proportion of recipients whom DPW determined were unable to work 
was even higher: 40%, or 4801 adults.
    DPW's demographic chart also shows that, as of March 3, 2001, a 
substantial number of recipients were working, just as they were 
expected to, yet were not off the TANF rolls, because their income was 
so low that they still qualified for a partial grant. Specifically, 
4,911 adults, or 8.2% of caseload, were working 25 hours per week or 
more. Of the June 2002 cohort, 12% (or 1,456 parents) were working 25 
hours/week or more and still on TANF. Faced with the loss of their 
benefits in just a year, these parents worked more than DPW required, 
yet they still could not achieve an income that would allow them to 
support their families independently. An additional 15% (9,066 adults) 
of the total caseload worked up to 25 hours/week, for total of 23% of 
the overall caseload who were working 20 hours/week or more. Of the 
June 2002 cohort, an additional 21% worked up to 25 hours/week, for a 
total of 33% of the June 2002 cohort who were working and yet still 
mired in sub-poverty.
    DPW's chart shows that 18,983 adults, or 32% of entire caseload, 
had large families with three or more kids. Of those in the June 2002 
cohort, however, 48% had such large families. Thus, these larger 
families have had a harder time getting off of TANF, and another DPW 
study shows that when they do leave TANF, they remain closer in danger 
of falling back onto it. ``Welfare Reform After Three Years,'' which 
surveyed parents who left TANF through 1999, shows that such families 
typically stayed below poverty, even when they found work, and even 
before the recession began. Only 24% of TANF leavers had households 
with four or more people--far less than the proportion of large 
households among those that remained on TANF, and half the percentage 
in the June 2002 cohort. In 2001, the federal poverty level was $17,652 
for a family of four, yet three full years after leaving TANF, the 
average earnings of all former recipients was only about $14,000, 
keeping the typical former TANF family with three children well below 
the poverty line.
    DPW's TANF Caseload and Activities (C&A) Report for October 2001 
confirms the high percentage of clients facing obstacles to self-
sufficiency. Out of 58,660 parents on TANF, 18,697, or 32%, were 
currently exempt from the work requirement, due to disability, lack of 
child care, or other good cause (excluding domestic violence). Of 
those, 11,759 alone, or 20% of the caseload, had a disability that 
prevented them from working. Another 12,312 parents, or 21%, were 
employed, yet were still so far below the poverty level that they 
qualified for a partial TANF grant. In all, 53% of active TANF parents 
in October 2001 were either certified unable to work, or else were 
working but receiving a partial grant.
    For an additional 17,452 parents in October 2001, the CAO was 
investigating or sanctioning them, or pursuing compliance, or pursuing 
conciliation or an appeal. It is extremely likely that these parents, 
who were failing to meet the department's requirements, were 
experiencing a high incidence of hidden barriers, such as undiagnosed 
learning disabilities, mental illness, or illiteracy.\2\
---------------------------------------------------------------------------
    \2\ Using Census Bureau data from 1999, the General Accounting 
Office reported last fall that 44% of TANF recipients--three times the 
rate of non-TANF families--reported physical or mental impairments. 
This figure did not even include addiction or domestic violence. GAO, 
Welfare Reform: More Coordinated Federal Effort could help States and 
Localities Move TANF Recipients with Impairments Toward Employment at 3 
and n.3 (October 2001) (GAO-02-37).
---------------------------------------------------------------------------
4. Conclusion
    DPW acknowledges that many recipients must have assistance beyond 
five years, and it will establish an Extended TANF program, wherein all 
clients who are beyond five years can receive continued benefits so 
long as they comply with one of two programs. People who can work will 
be assigned to work activities through Work Plus, while non-work-ready 
parents will be connected with therapy and other services to help them 
overcome their barriers in the Maximizing Participation Project. DPW 
also recognizes that a high number of parents fall into one of those 
two groups: all parents who need it, rather than just 20% of the 
caseload, will be eligible for Extended TANF. At present, however, the 
state is faced with the need to fund Extended TANF with state dollars. 
As Congress reauthorizes TANF, we hope it will encourage the efforts of 
Pennsylvania and other states to continue working with parents who need 
more help to become self-sufficient. Congress should allow states the 
flexibility to remove the time limit for all recipients who have 
barriers to self-sufficiency.

                                

                      Friends of Welfare Rights of Washtenaw County
                                                Ypsilanti, Michigan
                                                     March 14, 2002
    Dear Representatives of the House Human Resources Subcommittee:
    I'm writing to urge you to consider the following important points 
during your hearing on states' implementation of welfare work 
requirements and time limits in Temporary Assistance to Needy Families.

           TANF reauthorization should have the stated goal to 
        move recipients out of poverty. And, it must include strategies 
        that would help individuals to work towards that goal. 
        Certainly work is practical training as well as being 
        productive, but for the individual to move into jobs which pay 
        more than poverty wages work requirements should be combined 
        with education or training. The value of education has been a 
        tradition of this nation, and should be emphasized in this case 
        also.
           Work requirements should take into consideration the 
        special needs of clients. Research shows most TANF clients 
        today have multiple barriers to employment. These needs should 
        be considered, and state workers should be able to address 
        those needs without penalty. Education, counseling, and 
        addressing other needs should count for some of the work time 
        requirements.
           Time limits must be reconsidered. Clients who are 
        working part time, or are engaged in activities which are in 
        preparation for work such as school or training or counseling 
        to overcome barriers to work should be exempted from Federal 
        time limits. They shouldn't lose their TANF cash benefits. Nor 
        should clients with family members who are disabled. They must 
        be exempted also from time limits.

    Please don't overlook these important points.
    Thank you.
            Respectfully yours,
                                                       Lee A. Booth
                                                          Secretary

                                

       Statement of the National Network to End Domestic Violence
1. Introduction
    Battered women often use welfare as a step to gain the economic 
stability needed to leave a violent relationship.\1\ Batterers are very 
calculating. They often control every aspect of a woman's life--social, 
emotional and financial. This financial control in particular makes it 
difficult for a woman to leave a violent relationship. Beyond keeping a 
tight grip on the family finances, batterers will frequesntly prevent 
women from working or getting an education.\2\ If the women are already 
employed, their abusive partners have often used a variety of tactics 
to prevent them from going to work or to get them fired.\3\ An employed 
woman is threatening to an abuser--she has a certain degree of 
independence and control over her own life that provides her with means 
and an opportunity to escape. Consequently, batterers resort to threats 
and harassment at work, inflicting black eyes or other physical 
evidence of violence to shame a woman from going to work, stealing the 
keys and other delaying tactics to make her late--anything to get her 
fired and maintain control over her life.\4\
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    \1\ Eleanor Lyon, ``Poverty, Welfare and Battered Women: What does 
the research tell us?'' 1, MINCAVA 1998. ``In nearly all of the studies 
which have addressed the issue, well over half of the women receiving 
AFDC reported that they had experienced physical abuse . . . by an 
intimate male partner at some point during their adult lives . . . When 
women were asked about more recent violence from their male partners, 
the rate remained high--from 19.5% to 32%.''
    \2\ ``39.7% of the currently abused women . . . reported that their 
partner tries to prevent them from obtaining education and training.'' 
Id. at 4.
    \3\ Eleanor Lyon, ``Welfare, Poverty and Abused Women: New Research 
and its Implications,'' National Resource Center on Domestic Violence 
October 2000 at ``46% of the women in the program reported their 
partners were jealous about the possibility of their meeting someone 
new at work, 21% were threatened or harassed while they were at work, 
and 32% were told that they would never be able to succeed at work or 
school.''
    \4\ ``This study of women who experienced current or past abuse 
found that 43.2% reported that they don't feel safe from their abusive 
partner at work, 29.8% reported they have been fired or lost a job 
because of domestic violence, and 34.7% said their education and 
training efforts have been hampered by abuse. More specifically, 84.5% 
said their abusive partner had kept them from sleeping, 58.7% said his 
threats had made them afraid to go to work or school. 47.1% said he 
refused to provide promised child care at the last minute, 41.5% said 
he had called them repeatedly at work, 34% had been refused promised 
transportation at the last minute, and 33.9% had been beaten so badly 
they could not work.'' Id. at 4
---------------------------------------------------------------------------
    This places battered women in a particularly unique and dangerous 
predicament. If they cannot get their needs met by the TANF system as 
it exists today, they may find themselves in a situation where their 
options are to return to an abusive relationship or to live on the 
streets with their children.\5\ It is imperative that TANF is 
strengthened to address the barriers that keep battered women from 
gaining independence and self-sufficiency.
---------------------------------------------------------------------------
    \5\ ``A 1990 Ford foundation study found that 50% of homeless women 
and children were fleeing abusive homes.'' Joan Zorza, ``Woman 
Battering: A Major Cause of Homelessness,'' Clearinghouse Review, vol. 
25, no. 4 (1991).
---------------------------------------------------------------------------
    In preparing these comments, The National Network to End Domestic 
Violence (NNEDV) reviewed the research on the impact of welfare reform 
on battered women and consulted with state domestic violence coalitions 
and local programs. These comments will cover some of the key reforms 
that are needed to help battered women and their children achieve 
independence, stability and, most important, security. While these 
comments focus specifically on the impact of welfare reform on victims 
of domestic violence, NNEDV believes that the reduction of poverty for 
all families should be the focus of the TANF program. NNEDV advocates 
for an end to family violence in the framework of the larger struggle 
against violence, poverty, homelessness and other social ills in an 
effort to contribute the ultimate goal of a more just society.
2. Achieving Long Term Self-Sufficiency Should Be the Goal of TANF 
        Assistance
    The goal of TANF assistance should be to help people achieve self-
sufficiency through employment that pays a living wage. The goal of 
simply moving women off welfare into jobs without giving them the 
skills to maintain sustainable employment will not help create long-
term economic independence. To count the numbers of women who are 
working without assessing whether or not those jobs pay enough to 
support both the women and their children creates artificially high 
success rates.
    The focus on immediate job placement subverts the original purpose 
of welfare reform, which was helping women to transition from welfare 
to work in a manner that would keep them from repeatedly returning to 
public assistance. It also discourages TANF workers from strategizing 
with women on a case-by-case basis to create individualized plans that 
will address their specific needs.
    This individual approach is critical to battered women in 
particular. Although there may be some similarities among battered 
women, each woman's case is unique.

          [E]ach battered woman faces different risks and therefore has 
        different needs for safety and self-sufficiency. Because each 
        battered woman's risks are different, determining what battered 
        women need must be done on a case-by-case basis. There is no 
        formula for safety or self-sufficiency. Options that may work 
        for one woman will increase danger for another.\6\
---------------------------------------------------------------------------
    \6\ Jill Davies, ``Building Opportunities for Battered Women's 
Safety and Self-Sufficiency,'' at 5, Violence Against Women Online 
Resources, MINCAVA 1998.

    Each woman's situation must be assessed individually to accurately 
and effectively create a plan that will help her and her children move 
safely from assistance to independence. In order to do this, 
caseworkers must not have their decision making restricted by arbitrary 
caps. This means removing restrictions on the length of time that women 
can be involved in educational training as a legitimate ``work 
activity'' under TANF guidelines and eliminating the cap on the number 
of women whose educational training can count towards a state's work 
participation rate. This also means expanding the definition of ``work 
activity'' to include full time care of a disabled child or a child 
under 6, vocational or educational training at any level, and 
participation in activities addressing domestic or sexual violence, 
mental health, substance abuse and/or disability.
3. States, in Consultation with State Domestic Violence Coalitions, 
        Must Be Required to Address Domestic Violence as Part of their 
        Implementation of TANF.
    By enacting the Family Violence Option \7\ (FVO), Congress 
recognized that the combined experience of poverty and violence raises 
particularly difficult issues for battered women. However, a state's 
response to domestic violence needs to be broader than the range of 
protections offered by the FVO. The purpose of requiring states to 
respond to domestic violence in their administration of TANF funds is 
to address the root causes of poverty among battered women and provide 
the kinds of services that will assist battered women in removing 
barriers to self-sufficiency and permanently transition from public 
assistance to independence.
---------------------------------------------------------------------------
    \7\ 42 U.S.C. Sec. 602(a)(7).
---------------------------------------------------------------------------
    Exemptions from program requirements are a critical tool in 
assisting battered women, but in order to help battered women 
transition effectively and permanently from welfare to self-
sufficiency, a more holistic approach is necessary. Other important 
responses include providing ongoing support services, mandatory 
domestic violence training for TANF workers, and resources to create 
and sustain an ongoing collaboration between domestic violence 
advocates and TANF workers. Participation in such programs should be 
voluntary and not used to sanction or impose burdensome requirements on 
a battered woman.
A. Frequent Screening for Domestic Violence
    TANF caseworkers should begin screening for domestic violence at 
the initial intake interview and continue to do so at various points in 
the process. This screening should be voluntary and non-coercive. In 
the beginning, the caseworker is a stranger to the woman, and as such, 
it may take time for a woman to feel comfortable enough to disclose to 
a caseworker that she is being battered. That's why it is imperative 
that a woman be allowed to disclose at any point in the process without 
fear of sanction.
    In the event of a disclosure, the caseworker should follow up with 
immediate referrals, either to a domestic violence advocate already 
present in the office or to a domestic violence program that the TANF 
office has a relationship with. Again, services should never be imposed 
on a woman. No one is better qualified than the woman herself to assess 
the danger of her situation and choose the options that best protect 
her and her children.
B. Exemptions from Program Requirements
    Battered women face many pressures in their attempt to extricate 
themselves from abusive situations. Some women will require waivers 
from specific program requirements while they are in the process of 
rebuilding their lives. The clock should stop ticking while victim's 
taking time to address these barriers. It is imperative that time 
limits on assistance do not add extra pressure to women who are already 
dealing with the stress of leaving an abusive relationship and 
reestablishing themselves. States need the flexibility to create a 
range of services and responses to domestic violence. However, the 
state's plan to address domestic violence must include exemptions from 
program requirements and time limits when domestic violence interferes 
with a woman's ability to complete the required tasks.
C. Provision of Support Services
    Some battered women may want to participate and can meet the 
requirements of the program when provided with the necessary support 
services. They have less of a need for waivers than for a range of 
support services that will facilitate compliance with program 
requirements. Often times the barriers that battered women face to 
gainful employment are not only safety concerns, but also more basic 
considerations such as transportation, childcare, basic job skills and 
referrals to domestic violence program when requested. These concerns 
are not exclusive to battered women; they are common to many TANF 
recipients. Citing a survey done in Florida, Eleanor Lyon found that 
''51% of all the sampled women in Florida's WAGES (TANF) program cited 
transportation as an obstacle, 44% said childcare, and 31% said lack of 
job skills.'' \8\ In addition, many battered women also encounter a 
crisis in the availability of affordable housing, which often has 
waiting lists years long. Without access to affordable housing, a 
battered woman finds herself left with two unbearable alternatives--
returning to an abuser or enduring homelessness. Assistance in 
overcoming these obstacles to self-sufficiency should be offered as an 
integral part of a state's plan to address domestic violence.
---------------------------------------------------------------------------
    \8\ ``Welfare, Poverty and Abused Women,'' at 6.
---------------------------------------------------------------------------
D. Screening Required Prior to Enforcement of Any Available Sanction
    It is imperative that TANF workers not immediately enforce 
sanctions on battered women without assessing the individual's 
situation and referring the woman for voluntary participation in 
counseling or support services to help her overcome the obstacles she 
faces in meeting program requirements. This extra step between non-
compliance and sanction allows victims of domestic violence to address 
the challenges that may be unique to violent situations and should 
never be used to coerce a woman into services in order to avoid 
sanction. As noted in the report to the Department of Health and Humans 
Services about the experience of seven counties administering TANF to 
battered women,

          [t]he programs that did best at identifying domestic violence 
        issues were those set up to identify all major barriers to 
        self-sufficiency--that is, those with a strong orientation to 
        use `carrots'. Programs focused more on immediate employment 
        rather than on longer-term self-sufficiency were not well set 
        up to identify any type of barrier, and the same was true for 
        domestic violence issues.\9\
---------------------------------------------------------------------------
    \9\ Martha R. Burt, Janine M. Zweig and Kathryn Schlichter, 
``Strategies for Addressing the Needs of Domestic Violence Victims 
Within the TANF Program: The Experience of Seven Counties,'' Chapter 8 
at 5, Urban Institute report to Department of Health and Human 
Services, June 30, 2000.

    Assessing the barriers a woman faces and offering necessary 
services before mechanically applying sanctions has proven to be a more 
effective way to facilitate the transition from welfare to work.
E. Training
    To help battered women navigate the TANF system, it is imperative 
that both TANF workers and domestic violence advocates are trained. 
TANF workers need to be trained to recognize the signs of domestic 
violence and to understand the unique barriers that battered women 
face. Domestic violence advocates need to be trained in the structure 
of the TANF system so they can assist their clients in obtaining all of 
the benefits to which they are entitled.
    Domestic violence is a complex phenomenon that can manifest itself 
in many different ways, and without a background in the issue, it can 
be very difficult for a TANF caseworker to properly assist a battered 
woman. In order to be able to help a woman create an individual plan to 
transition out of a violent relationship and into self-sufficiency, 
TANF workers need to be aware of all of the challenges that battered 
women face, including issues of safety, affordable housing, 
transportation, childcare and legal assistance. Mandatory domestic 
violence training for TANF caseworkers should be a fundamental 
component of a state's domestic violence plan. ``Training gives workers 
the understanding to interpret clues and indicators, to probe carefully 
and understand correctly. And to remain non-judgmental but 
supportive.'' \10\ If an individual's caseworker is not sensitive to 
these issues, the worker may push a woman to take actions that are 
either unworkable or unsafe. This kind of response may make a woman 
feel that her only available option is to return to her abuser.
---------------------------------------------------------------------------
    \10\ Burt, Chapter 8 at 3.
---------------------------------------------------------------------------
    It is critical that this training be federally mandated and done 
consistently by experienced domestic violence advocates. The training 
must be scheduled with regularity to ensure that even if an agency has 
a high turnover rate among caseworkers, all caseworkers will undergo 
some form of domestic violence training in their orientation process. 
This training should be conducted by and in coordination with a local 
organization whose primary purpose is to provide services to victims of 
domestic violence or a state domestic violence coalition who will train 
caseworkers in the empowerment model of working with victims of 
domestic violence. Finally, resources should be allocated to pay for 
training provided by domestic violence advocates whose time and 
resources are already stretched thin.
    The TANF system itself is also complicated and difficult to 
navigate for those not well versed in its intricacies. Domestic 
violence advocates are not usually trained in the details of what 
assistance is available to women, making it difficult to know what aid 
is available to a particular client under TANF. Considering the complex 
web of rules and exemptions governing what assistance is available to 
battered women--everything from what aid is available to undocumented 
immigrants to what options battered women have to stop the clock under 
the Family Violence Option or similar state legislation--navigating the 
system can be very difficult. Grants should be made available to states 
to conduct voluntary training for domestic violence advocates so that 
advocates will be better equipped to help their client access services 
and meet program requirements. Also, training between the two agencies 
can also increase contact and communication between the two agencies. 
This interaction can ease what in the past has been characterized as a 
difficult relationship between domestic violence programs and TANF 
agencies.\11\
---------------------------------------------------------------------------
    \11\ ``Cross-training and developing mutual understandings of each 
agency's mission, constraints, and resources have also been important 
in assuring that clients get the services and supports they need. Often 
this has meant overcoming histories of non-communication or, worse, 
distrust and suspicion.'' Burt, Chapter 8 at 5.
---------------------------------------------------------------------------
4. Confidentiality and Autonomy
    The cornerstone of state plans for assisting battered women in the 
TANF system must include strong protections for the woman's 
confidentiality and autonomy. Whether a disclosure is made to a 
caseworker, a child support advocate, or a domestic violence advocate, 
the information that a battered woman discloses must be held in the 
strictest confidence. This is a critical component in working with 
battered women. No information should be shared with other workers or 
agencies unless consent is obtained from the woman herself.

          There are very good reasons for privileging the information 
        disclosed by a woman facing a domestic violence situation and 
        giving her control over the amount of information she wants 
        generally known by the agency. Such protection of 
        confidentiality need not compromise the ability of either the 
        on-site advocate or any TANF caseworker to develop an 
        appropriate self-sufficiency plan. However, the lines of 
        communications and privacy need to be drawn clearly and 
        carefully, understood by all, supported the administration, and 
        communicated directly to staff.'' \12\
---------------------------------------------------------------------------
    \12\ Burt, Chapter 8 at 12.

    If this policy is not strictly enforced, it will deter women from 
divulging abusive situations. Without this information, managing a 
battered woman's case will be exceedingly difficult. In addition, the 
fear in some states that child protective services will find out about 
the abuse will also keep some women from coming forward.\13\ If women 
are not certain that the information they share with their caseworker 
will be held in the strictest confidence, not only will they be 
reluctant to come forward, they may elect to stay in the abusive 
relationship just to ensure that they keep custody of their 
children.\14\
---------------------------------------------------------------------------
    \13\ ``Women are afraid that their children will be taken away from 
them. Some women have had their children taken away from them due to 
endangerment. Batterers use this as a way to threaten women.'' Id 
Chapter 2 at 10.
    \14\ ``DCF has taken an aggressive stance on children residing in 
homes with domestic violence. Children are now removed with little 
investigations from homes in which domestic violence occurs. Women who 
lose their children are being forced to address the domestic violence 
issue before they are allowed custody of their children. Although this 
policy is not directly related to the activities of the One Stop Career 
Centers, it may effect women's willingness to disclose domestic 
violence as a barrier to work.'' Burt. Chapter 5 at 8.
---------------------------------------------------------------------------
    In addition, victims of domestic violence who come forward and 
disclose the abuse to their case workers should not be forced into 
services or into dealing with the criminal justice system in order to 
get the assistance is that is due to them under TANF. Battered women 
often know more about the intimate details of their own situations than 
any caseworker could independently assess.

          A battered woman will face one set of batterer-generated 
        risks if she stays in the relationship and a different set if 
        she leaves. Leaving a relationship does not guarantee the 
        reduction or elimination of violence, threats or other risks. 
        For some battered women, leaving may create new risks or 
        increase existing ones. Battered women continually analyze the 
        risks they face.\15\
---------------------------------------------------------------------------
    \15\ Davies at 3.

    These women know whether or not going to the police would help or 
hurt their situation, what services they need, and whether it is 
prudent to seek child support. For example, there are many reasons that 
a protective order may not increase the safety and security of battered 
---------------------------------------------------------------------------
women and their children.

          Some of the reasons a protective order may not work are: the 
        batterer will not obey court order; the batterer will increase 
        his violence when he is ``served'' with the order; the 
        protection order may not include protection of the children; 
        the batterer will lose his job as a result of the order and 
        this will reduce the likelihood of child support; she will lose 
        her job if she misses work because she must go to court to get 
        an order; the protection order will ``kick him out'' of the 
        home and she can't afford the rent on her own; or the batterer 
        will find the woman in hiding because the legal process for 
        obtaining an order may give him information about where she is 
        and the opportunity to have contact with her in court.\16\
---------------------------------------------------------------------------
    \16\ Davies at 12.

    All of the factors that figure into a TANF case where domestic 
violence is present calls for an independent assessment of how program 
requirements may affect the safety of that particular woman. 
Caseworkers should not be allowed to force a woman into support groups 
or other services in order to access TANF funds.
5. Marriage Promotion
    Any efforts to promote marriage should recognize the direct and 
imminent danger that women and children face when living in a violent 
home. There are many reasons why a woman may not be able to leave an 
abusive home. The answers were complicated and varied, with economic 
dependence being a significant cause. The danger inherent in marriage 
promotion activities is that women may feel additional shame and stigma 
if they attempt to flee a violent home and end an abusive marriage. 
They also may become even more economically dependent on the 
perpetrator if the TANF system provides more resources to women who 
stay married to the father of their children. Women should not have to 
stay in an abusive home in order to receive a larger TANF check. Nor 
should the stigma of divorce become so great that a battered woman 
chooses to remain in a dangerous situation to avoid the societal stigma 
and shame of a failed marriage. These are the real, unintended 
consequences of a policy that emphasizes marriage at the expense of 
safety.
    Additionally, programs that promote marriage may take a naive 
approach to the causes and impact of domestic violence. Programs that 
promote couples counseling, parenting education, or other basic 
services may not have the expertise to deal with the complicated nature 
of battering. Batterer intervention must be long term and focused on 
changing the belief system that the batterer holds about his right to 
use violence to control his wife and children. Traditional 
psychotherapy, conflict resolution and anger management have not proved 
to be efficacious in addressing abusive behavior. It is critical that 
marriage promotion programs not utilize such techniques in its bid to 
build healthy families. Such activities are dangerous for victims and 
their children and should not be promoted as solutions for battering. 
Instead, resources should be directed towards programs that address 
both victim safety and offender accountability and have the expertise 
to deal with the potential lethality of domestic violence situations.
6. Conclusion
    When provided with the necessary training and support, battered 
women can successfully make the transition from public assistance to 
total independence. However, this journey must be aided by 
individualized planning and protected by strict confidentiality. The 
system must be designed to address the root causes of the woman's 
poverty and respond to her individual needs, always keeping safety at 
the forefront. Implementing the strategies outlined in these comments 
will allow battered women to leave abusive relationships and establish 
independent, violence free lives for themselves and their children.

                                

Statement of Sister Mary Elizabeth Clark, NETWORK, A National Catholic 
                          Social Justice Lobby
    NETWORK, A National Catholic Social Justice Lobby, is a membership 
organization made up of more than 11,000 groups and individuals, many 
of them faith-based social service providers. Our mission is to 
educate, lobby and organize to influence the formation of federal 
legislation to promote economic and social justice.
    In 1996, soon after its signing, NETWORK initiated a multi-year, 
nationwide study to examine the effects of The Personal Responsibility 
and Work Opportunity Responsibility Act on people living in poverty. 
Almost 4,000 patrons of soup kitchens, health clinics and other 
private, primarily faith-based social service facilities were 
interviewed during three separate surveys. Results of the first two 
surveys, conducted in 1997 and 1998, were published in the 1999 report, 
Poverty Amid Plenty: The Unfinished Business of Welfare Reform. Results 
of the third survey, conducted from November 2000 through January 2001, 
appeared in Welfare Reform: How Do We Define Success?, a report that 
was released at a Capitol briefing in July 2001.
    The study has shown that a significant number of current and former 
welfare recipients with incomes both below and above the poverty line 
are unable to meet their most basic needs. As a result, many turn to 
emergency facilities to provide for themselves and their families.
    During the most recent survey, we found that almost half of those 
we interviewed in emergency facilities had household yearly incomes 
under $8,500, while 30 percent lived on less than $6,000. Sadly, 
roughly two-thirds of these desperately poor families included 
children. Despite their extreme poverty, only 28 percent of these 
families received government cash assistance.
    We also found welfare reform ``successes''--people with jobs who 
had moved above the poverty line--in our soup kitchens and other 
emergency facilities. Fully one-third of those we surveyed came from 
households with incomes that exceed the federal poverty income level, 
and three-quarters of this group had at one time been on welfare. Why 
are they relying on emergency services? Mostly because of lost benefits 
and inadequate wages. Also, a shortage of affordable housing means that 
housing costs consume a high percentage of their earnings.
    NETWORK believes that the ultimate test of the success of welfare 
reform is whether welfare-to-work families are able to achieve 
independence and a secure future. This requires job training, 
childcare, education and other supports such as transportation, stable 
housing, addiction treatment, domestic violence protection and 
counseling.
    We are concerned that the Administration's TANF proposal makes it 
difficult for states to do much more than provide inexpensive, short-
term services to people who need much more. By mandating that more 
people be engaged in some kind of ``work activity'' while not boosting 
funding to provide the support they need, the proposal forces states to 
do more with less.
    We also worry that the current proposal is more restrictive 
concerning the types of education and job training that are allowed. 
For example, the limiting of training activities to three months within 
a 24 month period rules out post-secondary education. To make matters 
worse, the President is also calling for cuts in federal funding of job 
training programs for low-income adults.
    One of the most difficult aspects of the 1996 legislation was the 
instituting of time limits. Like many groups, NETWORK found these new 
restrictions arbitrary and inherently unfair. Recognizing the low 
political likelihood that time limits will be abolished this year, 
NETWORK supports a number of measures to lessen the suffering they 
cause. These include:
    1. Redefining work. This means stopping the time clock for people 
who play by the rules, people, for example, who are:

           actively looking for a job
           enrolled in job training classes
           attending school
           caring for children under the age of six
           unable to find quality, affordable child care for 
        their children
           employed but not earning a living wage.

    2. Increasing the percentage of families who receive extended time 
limits, currently limited to 20 percent of a state's average caseload. 
NETWORK supports increasing it to at least 20 percent of the state's 
caseload when welfare reform was enacted in 1996, a larger number.
    More generally, welfare-to-work families need all the tools 
necessary to achieve long-term self-sufficiency--a living wage, health 
care, affordable housing, transportation, daycare, training, and 
education. States need appropriate levels of funding and flexible 
requirements to provide for these families.
    The welfare reform reauthorization process provides Congress with 
an important opportunity to take concrete steps to lift millions of 
people out of poverty by providing the tools they need to become 
independent. The people of the U.S., acting out of compassion, hastened 
to provide assistance to the victims of September 11. We have cared for 
the victims of the terrorist attacks. It is now time for Congress to 
extend that caring to people who struggle in poverty each day.

                                

   Statement of Gloria Guard, Executive Director, People's Emergency 
                   Center, Philadelphia, Pennsylvania
    I appreciate the opportunity to submit written testimony as the 
Executive Director of People's Emergency Center (PEC), Pennsylvania's 
oldest service agency for homeless families founded in 1972. PEC offers 
a comprehensive ``continuum of care'' to address the housing, 
employment and social service needs of homeless families in 
Philadelphia. PEC has served over 6,000 homeless women and children and 
been remarkably successful in helping these families achieve permanent 
self-sufficiency. PEC understands and addresses the needs of low-income 
families and communities more broadly. PEC created the People's 
Emergency Center Community Development Corporation in 1992, to serve as 
its community revitalization agent. Since its inception, PECCDC has 
leveraged $14 million of investment into West Philadelphia and 
converted 70 vacant and blighted properties into 94 units of affordable 
transitional and permanent housing, 3 social service facilities, a 
community playground, and green space. PECCDC has an additional $8 
million of important facilities and housing projects in various stages 
of the development pipeline.
    Directly related to welfare, PEC, through its Job Opportunities and 
Basic Skills Program (JOBS), has provided specialized employment 
services to homeless women transitioning from welfare to work. JOBS 
conducts outreach at 11 of the City's homeless family shelters and 
enrolls an average of 125 women per year. Nearly 50% of those placed in 
jobs are still working after a year, which is positive compared to 
industry standards. In addition, PEC has almost completed the 
construction of Families First, a one-stop welfare to work center that 
will house under one roof child care and afterschool for 120 children, 
a JOBS program assisting 100-120 women annually and a preventive 
healthcare center. Finally, PEC has increasingly been recognized as an 
organization that can speak confidently on welfare reform policy 
issues, particularly from the perspective of an experienced provider 
serving women with multiple barriers to employment. In the past year, 
PEC was instrumental in calling attention to the expiration of the 
federal Department of Labor's welfare-to-work funding and for 
soliciting other public sector resources to maintain essential 
components of Philadelphia's welfare to work program. PEC was selected 
from among the United Way of Southeastern Pennsylvania's member 
agencies to provide the provider perspective on welfare reform at 
United Way's welfare reform forum in November. PEC recently took the 
lead in organizing a planning group and establishing the Philadelphia 
Welfare Coalition to address critical welfare issues over the next six 
months. The Coalition hosted a forum in January aimed at developing a 
cohesive and broad-based response to the Pennsylvania Department of 
Public Welfare's (DPW) proposed regulations related to the five-year 
time limits. The Coalition is now beginning to focus its attention on 
the federal reauthorization of TANF.
TANF Work Requirements:
    Since the purpose of the testimony is ultimately to inform the TANF 
reauthorization discussions, I want to comment specifically on the 
Administration's proposed increase in the work requirement to 40 hours 
per week.
The 40-hour per week work requirement is nearly impossible to meet 
        consistently:
    The 40-hour per week work requirement is onerous, particularly for 
single moms with children. A large part of the difficulty of meeting 
the 40-hour per week work requirement is the need to meet it 
consistently every week for as long as the person needs welfare 
benefits. The 40 hours is strictly implemented and does not allow for 
office holidays, vacation days, sick days or personal days. Welfare 
recipients are not currently entitled to these critical options the 
rest of the working population uses to help them balance work and 
family needs and sustain employment.
    On March 12th, President Bush came to PEC in Philadelphia to 
announce the USA Freedom Corps. I had the opportunity to speak with him 
directly about welfare reform. I told the President with what I refer 
to as ``the Christmas Story'' to illustrate how difficult it is to meet 
the work requirement. Each year our JOBS Program has clients placed in 
paid work experiences with other nonprofits or public sector agencies 
throughout the City. Many of these employers close down their offices 
for the holidays between Christmas and New Years. Unfortunately, our 
clients still need to meet their hours-per-week requirement and so we 
scramble to accommodate with hours at our agency or with other agencies 
that might be open. It is always a major challenge to find enough 
supervised positions in Philadelphia during the holidays to accommodate 
all of those who must meet their work requirement.
    Another important point that I did not make to the President but 
would have made given more time is that between Labor Day and the end 
of January, with national holidays, there is not a single month when 
offices are actually open 40 hours per week consistently. Each month, 
there is at least one observed holiday, which means that one week of 
every month between September and January welfare recipients are 
scrambling to make up 8 hours in that same week of the holiday.
    The President responded that clearly no body intended 
implementation of the work requirement to be so rigid that it created 
these consequences. He promised to look into the issue and to think 
about potential solutions.
    I would like to offer a few points to guide the Administration and 
Congress' welfare policy related to work requirements.

           The increase in the work requirement from 30 hours 
        to 40 hours per week significantly exacerbates the problem of 
        meeting the work requirement every week.
           The Administration might be tempted to argue that 
        this is not a real issue because only 24 of the proposed 40 
        hours of work are strictly defined. However, in practice, it is 
        a real problem. Take the person who is in paid work experience 
        24-hours per week on Mondays, Wednesdays and Thursdays and who 
        has a GED program on Tuesdays and Fridays. When Thanksgiving 
        falls on a Thursday and her office is closed, this woman cannot 
        just make up those hours another day that week. The nonprofit 
        doesn't have her supervisor staying late that Monday and 
        Wednesday so that she can squeeze in 8 additional hours. If she 
        tries to make up the work on Tuesday or Friday she meets the 
        24-hour component of the work requirement but misses her GED 
        program and fails to meet her 40 hours of weekly participation. 
        It is almost impossible for her to remain consistently 
        compliant, and thus, for the state to count her toward their 
        work participation rate.
           A good starting point for a solution would be to 
        allow welfare recipients the same leave policies that other 
        employees in this country get, including vacation, sick days, 
        personal days and official holidays. This leave policy would 
        give welfare recipients hourly credits toward their work 
        requirement. We all need these options and, in fact, poor 
        people need them more. For example, PEC's homeless clients on 
        welfare have to interact with several bureaucracies--the County 
        Assistance Office, the Section 8 office, family court, and 
        others--in their effort to stabilize their lives. All of these 
        agencies require that clients come to the office in person 
        during regular business hours. Each time they are required to 
        go to one of these offices, they need to make up those hours in 
        that same week or fail to meet their work requirement.

    I focused my discussion with the President around this one major 
implication of the 40-hour work requirement. However, there are others. 
It is the ``all or nothing'' nature of the 40-hours per week 
requirement that is most problematic. A respected colleague articulated 
the issue well when she said, ``I have never before encountered a test 
when the only passing grade was 100%.''
    We know from experience the past few years that it was extremely 
difficult for welfare recipients to meet the 30-hours per week 
requirement. Obviously, very few welfare recipients will be able to 
achieve 40-hours per week of activity.
    We also know from experience that states are driven to hit their 
work participation rate targets and are unlikely to offer programs that 
are not structured to maximize the number of people meeting work 
participation rates.
    In the Administration's proposal, states are only allowed to count 
families that meet both the 24-hour work requirement and the 40-hour 
full participation requirement toward their work participation rate. 
(States will apparently be able to obtain pro-rata credit for families 
engaged in activities less than full-time as long as they meet their 
24-hour work requirement, but it is not clear what that means). What is 
clear is that under the Administration's proposal, the following would 
not be considered successful outcomes:

           A person with a disability working 25 hours per week 
        but unable to commit to other activities above and beyond that.
           A single Mom working 30 hours per week and caring 
        for her disabled child the hours her child is not in school.
           The homeless client who works 24 hours per week and 
        spends 12 hours per week pursuing permanent housing she and her 
        family so desperately need.
           The single mom with school age children who works 
        only 32 hours per week so that she can still be there to see 
        her children off to school in the morning, meet them at the bus 
        stop in the afternoon and supervise them throughout the rest of 
        the day.
           The person who attends substance abuse treatment for 
        three months but requires a more gradual reintroduction to the 
        workforce over the following months.
           The person working for UPS at $12.00 per hour who 
        does not work the same number of hours or the same schedule 
        every week but who can count on the fact that they are earning 
        more for their family than if they worked a more consistent 
        minimum wage job 24 hours per week.

    It is also clear that with work requirements so strictly defined, 
states will end up sanctioning many families--the most vulnerable 
families--off the caseload.
    Finally, under the Administration's plan, the stated overarching 
purpose of TANF would be to improve the well-being of children. I think 
that is a critically important goal of TANF. I want to point out that 
the 40-hour per week work requirement is not in the best interest of 
children. First, it is likely that many families will be sanctioned off 
of welfare rolls for not meeting the work requirement. It is definitely 
not in the best interest of children for their family to have no 
income. It is not in the best interest of children for their parents to 
be penalized for working part-time so they can care for and supervise 
them. We know from the research on the first wave of welfare reform 
that Teens were more likely to be negatively affected with studies 
suggesting decreases in school achievement and increases in risky 
behavior. (Source: Welfare Reform & Beyond, Brief #1). The increase 
from 30 hours to 40 hours is likely to increase the negative impacts on 
teens, particularly since the Administration's proposal does not 
allocate additional funds for the afterschool programs that will be 
necessary for children whose parents are working these additional 
hours.
    We all want welfare reform to be a success. I am concerned that the 
Administration's proposed work requirements set the clients, providers, 
states and the welfare program up for failure.
    I would also like to take this opportunity to present PEC's 
position on TANF Reauthorization more broadly.
    PEC makes the following recommendations in the hope that, when 
reauthorized this year, the TANF block grant will become an even more 
powerful asset in helping us to carry out our mission.
    First and foremost, the reauthorization discussions should reflect 
that (1) the welfare population of today differs from the caseload of 
five years ago, with a substantially higher percentage of recipients 
facing multiple barriers to employment; and (2) the economy, though on 
the mend, is not booming at the rate it was over the past five years. 
Nevertheless, we can and must maintain the goal of personal 
responsibility and high expectations that people still on the rolls can 
move from welfare to work. To make these expectations a reality, states 
continue to need maximum flexibility to support programs that respond 
to their unique caseload and labor market realities. They also need 
sufficient resources--Congress simply must increase the block grant 
level at least to account for inflation. A more substantial increase is 
required if we wish welfare reform to evolve to the next phase of 
reaching even the most troubled families and further reducing poverty. 
Additionally, to sustain the momentum of welfare reform, we urge the 
Administration and Congress to:
          (1) Make the rules of the game for families transitioning 
        from welfare to work the same as they are for the rest of us. 
        We expect welfare recipient to work 40 hours per week like the 
        rest of us. But most people do not work 40 hours per week every 
        week. Think of Christmas and Thanksgiving. Welfare recipients 
        are penalized if they work less than 40 hours in any week, 
        regardless even of national holidays. This is unfair. They 
        deserve a reasonable leave policy to enable them to balance 
        work and family needs and retain employment, just like other 
        employees. Also, people transitioning from welfare to work 
        should not be required to work for less than the minimum wage. 
        Nor should they have to work off checks and food stamps at 
        artificially low wage rates. Finally, to the greatest extent 
        possible, welfare recipients should be paid wages that allow 
        them to benefit from the Earned Income Tax Credit and build an 
        employment history for unemployment compensation and social 
        security purposes. We at PEC find that welfare recipients want 
        to give an honest day's work; we owe them an honest day's pay--
        coupled with time for their family and a chance to build for 
        that family's future.
          (2) Give providers on the front lines, like PEC, the 
        flexibility we need to provide appropriate services to assist 
        families with multiple barriers to move toward employment and 
        self-sufficiency. Unfortunately, the combination of the 
        proposed 40-hour per week requirement, 70% work participation 
        rate and the elimination of the caseload reduction credit 
        incentivizes states to offer a ``one-size fits all'' program. 
        We urge the Administration to examine options, including 
        retention of the caseload reduction credit, for allowing states 
        to support the full range of programs they will need.
          (3) Recognize that affordable housing is essential to the 
        successful transition from welfare to work. The first purpose 
        of TANF is to ``provide assistance to needy families so that 
        children may be cared for in their homes or in the homes of 
        relatives,'' yet the TANF program fails adequately to recognize 
        the critical importance of this work support. Research shows 
        that people leaving welfare that receive housing assistance 
        have significantly higher employment rates and earnings, while 
        housing problems threaten families' ties to work. Accordingly, 
        the reauthorized legislation should clearly define housing 
        subsidies as a work support, similar to childcare or 
        transportation, instead of as assistance. States should also be 
        required to address housing in their TANF plans. This is just 
        common sense--it is hard for TANF recipients to meet our 
        heightened expectations when, even after going to work, these 
        vulnerable families lack a stable home due to overwhelming 
        housing cost burdens.

    Thank you for your time and consideration.

                                

                                                      Project IRENE
                                        Springfield, Illinois 62704
                                                     March 18, 2002
To: House Human Resources Subcommittee
Re: New Vision for Reauthorization of TANF
From: Rose Mary Meyer, BVM; Project Director, Project IRENE
    The Vienna Declaration and Programme of Action Adopted at the World 
Conference on Human Rights, June 25, 1993 reads:
          . . . Recognizing and affirming that all human beings derive 
        from the dignity and worth inherent in the human person, and 
        that the human person is the central subject of human rights 
        and fundamental freedoms, and consequently should be the 
        principal beneficiary and should participate actively in the 
        realization of these rights and freedoms. . . . (italics in 
        original)
    In order to assure these rights and freedoms for TANF recipients, 
we need a new vision for reauthorization. Opportunities include:

           reconsideration of time limits
          The well-being of the family ought to be primary in the new 
        vision. If parents have sick children or infirm relatives, the 
        current time limits ought to be suspended. The effects of 
        domestic violence also have to be factored into the equation. 
        Families engaged in part-time work or school ought not to be 
        terminated because of time limits.
           restoration of benefits to lawfully present 
        immigrants
          A study by the National Immigration Law Center found that 1.3 
        million children who are U.S. citizens lost benefits because 
        their parents were dropped from welfare roles. The 1996 law 
        made most lawfully present immigrants ineligible for Federal 
        public benefit programs such as food stamps, Medicaid, SSI, 
        TANF. Nutrition assistance and health care benefits need to be 
        restored to lawfully present immigrants.
           expansion of educational opportunities
          A U.S. Department of Health and Human Services study, which 
        followed TANF recipients for one year, indicates that only 5.9% 
        received job training or education. The 1996 law limits states 
        in their ability to include education and job training in their 
        TANF programs. However, job training and education are 
        essential for economically poor women in order to access jobs 
        that pay wages that allow these women to support a family. 
        Adequate housing, food and health care are human rights, not 
        privileges.

    In the new vision of the reauthorization bill, educational 
opportunities need to be expanded. The limits on education and job 
training need to be eliminated.

           reconsideration of work requirements
          Work requirements have to be flexible in order for the 
        necessary education or job training to occur. Research 
        indicates that most of the current TANF recipients have 
        multiple barriers to employment. Therefore, assessment of needs 
        and provisions of services ought to be considered as facets of 
        the work requirements.
           reduction of poverty
          Reduction of poverty is life-giving. Reduction of case loads 
        does not guarantee reduction of poverty. Securing jobs which 
        pay higher wages than the minimum wage and also offer benefits 
        such as health insurance are essential to reduce poverty.

    All of us benefit from poverty reduction--government, business, 
neighbors, families, friends. A new vision for TANF reauthorization 
will strengthen families and reduce poverty.
    Conclusion
          I am confident that you will foster a new vision of TANF that 
        will guarantee the rights and freedoms of TANF recipients. 
        Thank you.
    Project IRENE (Illinois Religious Enabling Nonviolent Endeavors) is 
a project of the Leadership Conference of Women Religious, Region 8. 
This not-for-profit corporation engages in analysis, education and 
advocacy which impact women and children.

                                

                                    Protestants for the Common Good
                                            Chicago, Illinois 60601
                                                      March 7, 2002
Hearing Clerk
House Human Resources Subcommittee
Washington DC
    To the Subcommittee:
    I wish to offer several concerns about work requirements and time 
limits related to TANF reauthorization on behalf of Protestants for the 
Common Good, a faith-based education and advocacy organization with a 
thousand members in the Chicago Metropolitan Area of Illinois.
    Protestants for the Common Good has been involved in studying and 
analyzing TANF at the federal and state levels, and advocating for 
realistic policies that will help move welfare recipients not only into 
the workforce but also out of poverty. Based on our knowledge of the 
welfare caseload in Illinois, and also a knowledge of the history of 
implementation in this state, we offer these comments pertinent to the 
issues before your committee:
Work requirements: (With special attention to the proposal that has 
        been put forward by the President)

           Research shows, and our own state Department of 
        Human Services concurs, that most of the remaining caseload in 
        Illinois (30,000 now available to work, compared with about 
        175,000 in 1997), has multiple barriers to work: illiteracy, 
        lack of work history, mental illness, physical impairments, 
        substance abuse, homelessness, caring for a disabled child or 
        family member, living in an area where there are no jobs 
        available or no transportation to get to employment. Research 
        also shows that TANF recipients can generally overcome one or 
        perhaps two barriers, but finding and keeping a job with 
        multiple barriers is very difficult if not impossible.
           Given the makeup of the caseload, it makes no sense 
        to limit full-time services that could address only one of 
        these barriers to three months out of 24 as is proposed by the 
        President. It will more likely take various full-time services 
        for all 24 months to ready most of these welfare participants 
        for employment, where employment is in fact an option.
           Similarly, it makes no sense to require these 
        multiple-barriered people to work 40 hours when most have not 
        been able to successfully find and keep 30 hours of work. Some 
        of the 30,000 available to work in Illinois are in fact 
        working, about 36%, but have not been able to find enough hours 
        or earn enough to work their way off the welfare rolls, but 
        they are clearly trying. And they should not be penalized, nor 
        should the state. Their continuance on the rolls is not for 
        lack of insistence by the Department of Human Services that 
        they must find a job or be engaged in work activities. The 
        Department has in fact been severe in its treatment of those 
        who have not for whatever reason been able to follow the rules. 
        Requiring 40 hours of work a week does not change the nature of 
        the caseload or alleviate the multiple barriers they face.
           Those who wrote the President's proposal may think 
        they are doing people with multiple barriers a favor by 
        requiring only 24 hours of the 40, or three days a week, to be 
        ``real'' work, and the other two can be education or training 
        or substance abuse treatment etc. That plan might fit a few 
        people who are lucky enough to find a three-day-a week job, 
        where the three days will exactly fit the two days where they 
        could find education and training programs or open substance 
        abuse slots. This is highly unrealistic and extremely 
        inflexible. There are not enough substance abuse slots now, and 
        education and training programs that can be combined with work 
        have not been developed in Illinois.
           Many companies have a 35-hour or 37.5 hour work 
        week.
           Where are the additional funds that will pay for the 
        services that theoretically could be supplied during the two 
        days a week of the 40 hours not required to be at work, 
        provided such new programs could be set up with new funding? 
        Without an inflationary increase in bloc grant funding, 
        providing extra services would be impossible, especially when 
        this state is already cutting its human services budget to meet 
        a budget crisis.
           It makes no sense to require of the state that 70 % 
        of that 30,000 is to be working, again a very inflexible and 
        unrealistic requirement. The present 50% requirement is not 
        only not being met, it is not currently a requirement, because 
        there is now a credit for caseload reduction, which has 
        disappeared in the president's proposal. To get more people 
        working does not require a stiffer requirement, it requires 
        more services.
Time limits
           The big need of the states is for flexibility. The 
        President's party is supposed to be the party that allows 
        states to experiment, to innovate, to be leaders, to be a 
        laboratory for developing good public policy. What happened to 
        that? There should be great flexibility given to states to stop 
        their time limits clock from running. States should be able to 
        do this by defining work and work activities, and by allowing 
        welfare participants to engage in full time education and 
        training so that they can truly work their way out of poverty.
Conclusion
    Protestants for the Common Good recommends that the work 
requirements be maintained as in the 1996 Act, preserving flexibility 
for the states, with two exceptions that add more flexibility: (1) more 
services that address multiple barriers should be allowed to count as 
``work'' and (2) more flexibility should be allowed for education and 
training programs of all kinds and at all levels, both full-time and in 
combination with work.
            Sincerely yours,
                                                       Nancy Brandt
                                       Co-Chair, Board of Directors
                                  Welfare and Poverty Issue Manager

                                

                      Women and Poverty Public Education Initiative
                                         Milwaukee, Wisconsin 53206
                                                     March 19, 2002
To: Members of TANF Subcommittee
From: Jean Verber, Director of Women and Poverty Public Education 
        Initiative
    I appreciate the opportunity to weigh in before the March 21 
deadline with comments on work requirements and time limits as they are 
being considered in the reauthorization process.
    I have worked with poor women in central city Milwaukee since 1995, 
the end of AFDC through the transition to the present when many women 
are dealing with time limits and economic hardship.
    Over the past 6 years, we have interviewed hundreds of welfare 
mothers, one-on-one as a way to document and track their progress and 
measure of well-being in the W-2 program. It is from this history and 
vantage point that I offer these comments and recommendations.
    Several key barriers clearly stand in the way of owmen moving 
toward some measure of self-sufficiency:

           low wage jobs, temp work, only part time employment 
        options
           lack of education and training for better paying 
        jobs

    To truly get out of poverty, policies need to support
    1. a combination of work and training to be eligible for family 
supporting jobs.
    2. professional assessment and referrals for those with personal 
barriers to work. Services offered need sufficient time and count as 
`work' to assure readiness, not only for successful employment but also 
to remain employed.
    3. With a soft labor market, factories closing, downsizing, hours 
reduced, and more part time than full time positions open, women should 
NOT be tied to time limits. In Milwaukee's central city, the Oct., 2001 
survey of business openings showed a 10 to l job gap (ten active job 
seekers for every full time opening). There is no way that arbitrary 
time limits will force or keep participation in this kind of labor 
market.
    Furthermore, those in training, therapy, victims of domestic 
violence (more than we ever realized!), these cases need to be dealt 
with according to need and not locked in to an arbitrary lime limit. 
Many, in our opinion, should be exempt due to insurmountable problems 
like caring for disabled children, those in rehab working with 
addiction, the mentally ill, physically ill, those struggling with 
abuse.
    Somehow, the reauthorization policy language needs to be crafted to 
assure understanding of the above mentioned and humane treatment as 
primary and accountability facets as secondary to be truly effective 
and productive for families, as well as the community where they 
reside.
    I urge you to engage with real families living in these situations 
so the reality comes from real experience. We are challenged to create 
policies that we would want for our own mothers, sisters, and 
daughters. The present policy program is a disgrace, punitive, and 
demeaning. Our women and children deserve more. Let's give hope back to 
them. Thank you for giving these comments your careful consideration.

                                                        Jean Verber
                                                           Director

                                

 Statement of Jenny Wittner, Senior Policy Associate, Women Employed, 
                           Chicago, Illinois
    Thank you for the opportunity to submit comments on welfare work 
requirements and time limits to the House Human Resources Subcommittee. 
Women Employed is a membership organization that works for the economic 
advancement of women. Besides engaging in education and advocacy 
activities, Women Employed provides job-training services to low-income 
women who are struggling to enter the workforce. Based on our 
experience as service providers and advocates, and on behalf of the 
members of Women Employed, we submit the following recommendations.
    The newest research from the National Evaluation of Welfare-to-Work 
Strategies joins other research in consistently demonstrating that the 
most effective welfare-to-work programs maintain a strong focus on 
employment and provide opportunities for some participants to engage in 
job search and others in education and training-not exclusively one or 
the other. Additionally, in Illinois and elsewhere, the fastest-growing 
occupations require skills that most TANF recipients do not have. Those 
jobs that do require only minimal or basic skill levels pay poverty-
level wages and offer few prospects for advancement. Indeed, research 
shows that by itself, gaining work experience does not increase low-
skilled workers' earnings. Depending on an individual recipient's 
current skills, TANF recipients can gain between $5,000 and $10,000 of 
annual income by increasing their skill levels through education and 
training. Additionally, those with higher levels of education are more 
likely to remain off welfare once they have left it. Research conducted 
for the Illinois Department of Human Services shows that those without 
a high school degree are more than twice as likely to return to welfare 
than those who have a high school degree or a GED.
    New TANF legislation should encourage states to make education and 
training a part of the menu of services that are offered to those on 
TANF and those who have recently left the TANF rolls. As Congress 
considers welfare reauthorization this year, Women Employed recommends 
changes in the federal welfare law to enable states to enroll greater 
numbers of welfare recipients in education and training that leads to 
employment. We recommend that Congress legislate a welfare program that 
will:
           Allow increased flexibility for states to count 
        education and training as a work activity. New TANF legislation 
        should expand the definition of ``work activity'' to include 
        vocational training without the current 12-month limit as well 
        as literacy, ESL and GED instruction and higher education.
           Include the types of activities that help remediate 
        barriers such as substance abuse, mental illness and learning 
        disability in the definition of a work activity so that state 
        agencies are able to address the needs of low-income clients 
        without penalty. The care of a disabled spouse or child should 
        also count as a work activity for those for whom such care 
        prevents other employment.
           Provide funding for supportive services to working 
        families as they undertake work activities until they reach 
        economic self-sufficiency. Working families, on and off TANF, 
        depend on crucial supports such as child care subsidies to 
        ensure that they can meet basic needs. These subsidies should 
        be available to those attending education and training part-and 
        full-time, to those attending other types of activities such as 
        drug rehabilitation and mental health programs, and to those in 
        low-wage employment.
           Eliminate time limits for people still on welfare 
        who are trying to overcome barriers to employment. Families who 
        are making good faith efforts to overcome barriers such as 
        disability, mental illness, substance abuse, domestic violence 
        and lack of literacy or job skills need continued support. 
        Families that face barriers to employment or job loss due to a 
        contracting economy also need continued access to TANF.

    Once again, thank you for the opportunity to submit comments.

                                
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