WELFARE REFORM:

AN EXAMINATION OF EFFECTS 

HEARING

BEFORE THE 

SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS 

OF THE 

COMMITTEE ON EDUCATION AND 

THE WORKFORCE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

HEARING HELD IN WASHINGTON, DC, SEPTEMBER 20, 2001 

Serial No. 107-30 

Printed for the use of the Committee on Education 

and the Workforce

U.S. GOVERNMENT PRINTING OFFICE 

WASHINGTON : 2002 

80-213 pdf 

For sale by the Superintendent of Documents, U.S. Government Printing Office 

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ii

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN A. BOEHNER, Ohio, Chairman 

THOMAS E. PETRI, Wisconsin GEORGE MILLER, California 

MARGE ROUKEMA, New Jersey DALE E. KILDEE, Michigan 

CASS BALLENGER, North Carolina MAJOR R. OWENS, New York 

PETER HOEKSTRA, Michigan DONALD M. PAYNE, New Jersey 

HOWARD P. “BUCK” McKEON, California PATSY MINK, Hawaii 

MICHAEL N. CASTLE, Delaware ROBERT E. ANDREWS, New Jersey 

SAM JOHNSON, Texas TIM ROEMER, Indiana 

JAMES C. GREENWOOD, Pennsylvania ROBERT C. “BOBBY” SCOTT, Virginia 

LINDSEY O. GRAHAM, South Carolina LYNN C. WOOLSEY, California 

MARK E. SOUDER, Indiana LYNN N. RIVERS, Michigan 

CHARLIE W. NORWOOD, JR., Georgia RUBEN HINOJOSA, Texas 

BOB SCHAFFER, Colorado CAROLYN McCARTHY, New York 

FRED UPTON, Michigan JOHN F. TIERNEY, Massachusetts 

VAN HILLEARY, Tennessee RON KIND, Wisconsin 

VERNON J. EHLERS, Michigan LORETTA SANCHEZ, California 

THOMAS G. TANCREDO, Colorado HAROLD E. FORD, JR., Tennessee 

ERNIE FLETCHER, Kentucky DENNIS KUCINICH, Ohio 

JIM DeMINT, South Carolina DAVID WU, Oregon 

JOHNNY ISAKSON, Georgia RUSH D. HOLT, New Jersey 

BOB GOODLATTE, Virginia HILDA L. SOLIS, California 

JUDY BIGGERT, Illinois SUSAN DAVIS, California 

TODD RUSSELL PLATTS, Pennsylvania BETTY McCOLLUM, Minnesota 

 PATRICK J. TIBERI, Ohio 

 RIC KELLER, Florida 

 TOM OSBORNE, Nebraska 

JOHN ABNEY CULBERSON, Texas 

Paula Nowakowski, Chief of Staff 

John Lawrence, Minority Staff Director

SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS 

HOWARD P. “BUCK” McKEON, California, Chairman

JOHNNY ISAKSON, Georgia, Vice Chairman PATSY MINK, Hawaii

JOHN BOEHNER, Ohio JOHN F. TIERNEY, Massachusetts 

MICHAEL N. CASTLE, Delaware RON KIND, Wisconsin 

SAM JOHNSON, Texas RUSH D. HOLT, New Jersey 

LINDSEY O. GRAHAM, South Carolina DAVID WU, Oregon 

MARK E. SOUDER, Indiana LYNN N. RIVERS, Michigan 

FRED UPTON, Michigan BETTY McCOLLUM, Minnesota 

VERNON J. EHLERS, Michigan ROBERT E. ANDREWS, New Jersey 

BOB GOODLATTE, Virginia RUBEN HINOJOSA, Texas 

TOM OSBORNE, Nebraska 
iii

Table of Contents 

Table of Contents............................................................................................................ 1 

OPENING STATEMENT OF CHAIRMAN HOWARD P. “BUCK” McKEON, 

SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS, COMMITTEE ON 

EDUCATON AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, 

WASHINGTON, D.C..................................................................................................... 2 

STATEMENT OF RANKING MEMBER PATSY T. MINK, SUBCOMMITTEE ON 

21st CENTURY COMPETITIVENESS, COMMITTEE ON EDUCATON AND THE 

WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, D.C....... 3 

STATEMENT OF DR. RON HASKINS, SENIOR FELLOW, THE BROOKINGS 

INSTITUTE, WASHINGTON, DC ............................................................................... 6 

STATEMENT OF ROBERT RECTOR, SENIOR RESEARCH FELLOW, THE 

HERITAGE FOUNDATION, WASHINGTON, DC..................................................... 8 

STATEMENT OF JOEL POTTS, TANF POLICY ADMINISTRATOR, OHIO 

DEPARTMENT OF JOB AND FAMILY SERVICES, COLUMBUS, OHIO ........... 10 

STATEMENT OF DR. HEATHER BOUSHEY, ECONOMIST, ECONOMIC 

POLICY INSTITUTE, WASHINGTON, DC.............................................................. 13 

STATEMENT OF DR. SANFORD SCHRAM, GRADUATE SCHOOL OF SOCIAL 

WORK AND RESEARCH, BRYN MAWR COLLEGE, BRYN MAWR, 

PENNSYLVANIA........................................................................................................ 15 

APPENDIX A -- WRITTEN OPENING STATEMENT OF CHAIRMAN HOWARD 

P. “BUCK” McKEON, SUBCOMMITTEE ON 21st CENTURY 

COMPETITIVENESS, COMMITTEE ON EDUCATON AND THE WORKFORCE, 

U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, D.C................................ 35 

APPENDIX B -- SUBMITTED FOR THE RECORD BY RANKING MEMBER 

PATSY T. MINK, SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS, 

COMMITTEE ON EDUCATON AND THE WORKFORCE, U.S. HOUSE OF 

REPRESENTATIVES, WASHINGTON, D.C., ESSAYS, “REFORMING 

WELFARE, REDEFINING POVERTY,” FROM THE ANNALS OF THE 

AMERICAN ACADEMY OF POLITICAL AND SOCIAL SCIENCE. .................... 39 

APPENDIX C -- WRITTEN STATEMENT OF DR. RON HASKINS, SENIOR 

FELLOW, THE BROOKINGS INSTITUTE, WASHINGTON, DC .......................... 71 
iv

APPENDIX D -- WRITTEN STATEMENT OF ROBERT RECTOR, SENIOR 

RESEARCH FELLOW, THE HERITAGE FOUNDATION, WASHINGTON, DC.. 99 

APPENDIX E -- WRITTEN STATEMENT OF JOEL POTTS, TANF POLICY 

ADMINISTRATOR, OHIO DEPARTMENT OF JOB AND FAMILY SERVICES, 

COLUMBUS, OHIO .................................................................................................. 119 

APPENDIX F -- WRITTEN STATEMENT OF DR. HEATHER BOUSHEY, 

ECONOMIST, ECONOMIC POLICY INSTITUTE, WASHINGTON, DC ............ 131 

APPENDIX G -- WRITTEN STATEMENT OF DR. SANFORD SCHRAM, 

GRADUATE SCHOOL OF SOCIAL WORK AND RESEARCH, BRYN MAWR 

COLLEGE, BRYN MAWR, PENNSYLVANIA ...................................................... 149 

APPENDIX H -- SUBMITTED FOR THE RECORD, RESPOSE BY DR. RON 

HASKINS, SENIOR FELLOW, THE BROOKINGS INSTITUTE, WASHINGTON, 

DC, TO CHAIRMAN HOWARD P. “BUCK” McKEON AND RANKING MEMBER 

PATSY T. MINK, SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS, 

COMMITTEE ON EDUCATON AND THE WORKFORCE, U.S. HOUSE OF 

REPRESENTATIVES, WASHINGTON, D.C. ......................................................... 165 

APPENDIX I – SUBMITTED FOR THE RECORD, WRITTEN TESTIMONY 

SUBMITTED BY NETWORK: A NATIONAL CATHOLIC SOCIAL JUSTICE 

LOBBY....................................................................................................................... 175

APPENDIX J – SUBMITTED FOR THE RECORD, WRITTEN TESTIMONY 

SUBMITTED BY CHICAGO JOBS COUNCIL....................................................... 181 

APPENDIX K – SUBMITTED FOR THE RECORD, WRITTEN TESTIMONY 

SUBMITTED BY THE CENTER FOR WOMEN POLICY STUDIES.................... 193 

Table of Indexes.......................................................................................................... 208 
1

HEARING ON WELFARE REFORM: 

AN EXAMINATION OF EFFECTS 

______________

Thursday, September 20, 2001 

House of Representatives, 

Subcommittee on 21st Century 

Competitiveness, 

Committee on Education and the Workforce, 

Washington, D.C. 

 The Subcommittee met, pursuant to call, at 10 a.m., in Room 2175, Rayburn 

House Office Building, Hon. Howard P. "Buck" McKeon presiding. 

 Present: Representatives McKeon, Isakson, Boehner, Johnson, Osborne, Mink, 

Tierney, Holt, Rivers, McCollum, and Andrews. 

 Staff Present: Stephanie Milburn, Professional Staff Member; John Cline, 

Professional Staff Member; Scott Galupo, Communications Specialist; Patrick Lyden, 

Professional Staff Member; Whitney Rhoades, Legislative Assistant; Deborah L. 

Samantar, Committee Clerk/Intern Coordinator; Heather Valentine, Press Secretary; 

Brendan O'Neil, Minority Legislative Associate; Jennifer Helfgot, Legislative Assistant 

to Mrs. Mink; Michael Nardelli, Executive Assistant to Mr. Tierney; Cindy Brown, 

Legislative Director for Mr. Kind; Dana Grey, Legislative Assistant to Ms. Rivers; Erin 

Dady, Legislative Staff, Ms. McCollum; Charles Matthews, Legislative Assistant to Mr. 

Andrews; Richard Martinez, Legislative Assistant to Mr. Hinojosa; and Ruth Friedman, 

Minority Committee Fellow. 
2

Chairman McKeon. A quorum being present, the Subcommittee on 21st Century 

Competitiveness will come to order. We are meeting today to hear testimony on the 

effects of welfare reform. Under Committee rule 12(b), opening statements are limited to 

the Chairman and the ranking minority member of the Subcommittee. Therefore, if other 

members have statements, they may be included in the hearing record. 

 With that, I ask unanimous consent for the hearing record to remain open 14 days 

to allow members' statements and other extraneous material referenced during the hearing 

to be submitted in the official hearing record. Without objection, so ordered. 

 I will begin this morning with my opening statement and first apologize for being 

late. I appreciate your being here on time. There is a great deal of traffic out there this 

morning.

OPENING STATEMENT OF CHAIRMAN HOWARD P. “BUCK” 

McKEON, SUBCOMMITTEE ON 21st CENTURY 

COMPETITIVENESS, COMMITTEE ON EDUCATON AND THE 

WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, 

WASHINGTON, D.C. 

 Good morning. Thank you for joining us for this important hearing. Today the 

Subcommittee is holding its first meeting to hear testimony on the effects of welfare 

reform and the temporary assistance for needy families block grant. This Committee 

played a central role in crafting the work-related provisions in the Welfare to Work 

program that make up the heart of the new system. I look forward to working with all of 

you as we continue the important debate on Welfare to Work. 

 We will examine the outcomes and impact on work and families as we look 

toward reauthorization of the far-reaching legislation of 1996. We particularly are 

interested in evidence regarding whether the law has resulted in reducing welfare 

dependence and increasing work. This hearing will give us a chance to look back on the 

law's implementation, assess the current situation and look forward to changes that may 

be necessary to build upon the foundation already created. 

 The effects of the law have been nothing short of dramatic. The caseload across 

the country and in my home State of California has dropped over 50 percent since its 

peak in the early 1990s. States continue to make significant investments in work 

programs and childcare to support working families, and employment by single mothers 

continues to rise. Since 1993, there has been a 50 percent increase in the number of 

never-married mothers who had a job. 

 Increased employment has resulted in higher earnings for families, and child 

poverty has declined. The average earnings of those who have left the welfare rolls are 

well above the minimum wage. Even with the robust economy of the late 1990s, recent 

studies confirm that welfare reform is largely responsible for the declining caseload and 
3

increase in work. 

 We know some families continue to face challenges as they move from welfare to 

employment and self-sufficiency. In our discussion today and in the future, I am sure we 

will have the opportunity to look at innovative approaches throughout the country that 

aim to address these issues. 

 As we look ahead, I anticipate much of our debate will center on the best way to 

support individual success in the workplace. I look forward to hearing the testimony of 

our witnesses today, who have expertise in this field as researchers and implementers. I 

know they will offer us insight into the tremendous strides that have been made, as well 

as thoughts on further steps that need to be taken.

WRITTEN OPENING STATEMENT OF CHAIRMAN HOWARD P. “BUCK” 

McKEON, SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS, 

COMMITTEE ON EDUCATON AND THE WORKFORCE, U.S. HOUSE OF 

REPRESENTATIVES, WASHINGTON, D.C. – SEE APPENDIX A 

Chairman McKeon. With that, I would like to recognize Congresswoman Mink for any 

statement that she has at this time. 

STATEMENT OF RANKING MEMBER PATSY T. MINK, 

SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS, 

COMMITTEE ON EDUCATON AND THE WORKFORCE, U.S. 

HOUSE OF REPRESENTATIVES, WASHINGTON, D.C. 

Mrs. Mink. I thank the Chairman, and I thank you for calling this hearing on the impact 

of welfare reform. I would like to share my thoughts on this subject for which I have a 

very deep interest and concern. As some might recall, I was the sponsor of the 

Democratic substitute during the final House debate in 1996. 

 The past 5 years have been nothing less than disastrous for many welfare 

recipients. Most are still living below the poverty line; 30 percent have not found jobs.

Those who have earn only around $7 an hour on average. With the median income 

among employed former recipients only $10,924 in 1999, many families who have lost or 

left welfare cannot afford health insurance or child care and sometimes cannot pay for 

food or rent. 

 Notwithstanding, many believe the 1996 welfare reform law has been a 

resounding success since the primary goal was removing people from the welfare rolls. 

But consider how TANF treats poor mothers. 
4

 TANF requires poor mothers to go to work and abandon their children all for the 

sake of the work ethic that ignores the economic and social value of caring for one's own 

children. TANF requires mothers to disclose who the father of their child is before they 

can receive welfare. This is massive invasion of privacy. 

 Later this month I will be introducing legislation that amends TANF in various 

ways.

 Education is an essential part of gaining access to better paying jobs that include 

benefits. My bill will expand the concept of work activity to include education skills 

enhancement and training. Welfare programs must encourage education and job training 

and not punish people by taking away their benefits when they are in school or training 

for a career. 

 The bill will also define care giving for one's own young or disabled children as a 

work activity that satisfies the TANF work requirement. Current work requirements are 

too restrictive. The "work first" policy forces individuals into low-paying jobs and forces 

parents to take jobs even though the children may need them at home. 

 The 5-year time limit for receiving TANF benefits must also be amended. My 

bill includes several instances where the clock is stopped, including when a parent is in 

school or training, job training, caring for a child under age six or is a victim of domestic 

violence. My bill prohibits full family sanctions and assures that children will never be 

without benefits even if their mother loses hers. 

 It also makes the paternity establishment and child support cooperation provisions 

voluntary for mothers. Current policy strips mothers of their constitutional rights by 

forcing them to disclose the identity of biological fathers to welfare agencies. 

 The illegitimacy bonus that is currently awarded to States who lower their nonmarital birth rate will be eliminated under my bill. Instead, a poverty reduction bonus 

will be awarded to States that lower poverty rates the most. The childcare guarantee must 

assure parents that their children will have quality childcare when they work or attend 

school.

 Finally, my bill will explicitly require TANF agencies to abide by title 7 and title 

9 prohibitions again sex discrimination. It also spells out the applicability of antidiscrimination and labor laws in the TANF program. TANF needs to be revised so that 

getting off welfare means being able to earn an education as well as enough money to 

support the family. 

Mr. Chairman, I would like to ask unanimous consent that four essays that are 

included in the Annals of the American Academy of Political and Social Science, entitled 

"Reforming Welfare, Redefining Poverty," issued September 2001, be inserted in the 

record.

SUBMITTED FOR THE RECORD BY RANKING MEMBER PATSY T. MINK, 

SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS, COMMITTEE ON 
5

EDUCATON AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, 

WASHINGTON, D.C., ESSAYS, “REFORMING WELFARE, REDEFINING 

POVERTY,” FROM THE ANNALS OF THE AMERICAN ACADEMY OF 

POLITICAL AND SOCIAL SCIENCE – SEE APPENDIX B 

Chairman McKeon. Without objection, so ordered. Thank you. 

Chairman McKeon. I would now like to welcome and introduce our witnesses. We 

will hear first from Dr. Ron Haskins. Dr. Haskins is a Senior Fellow and a Co-director of 

the Welfare Reform and Beyond project at the Brookings Institute. He is also a Senior 

Consultant at the Annie E. Casey Foundation. 

 Until January of this year, Dr. Haskins was Staff Director of the House Ways and 

Means Human Resources Subcommittee and was instrumental in the drafting of the 1996 

welfare reform legislation. 

 Then we will hear from Mr. Robert Rector, Senior Research Fellow at the 

Heritage Foundation, his areas of expertise being welfare and poverty. Mr. Rector is an 

authority on the U.S. Welfare system, and he too played a role in crafting the welfare 

reform legislation passed in 1996. 

Mr. Joel Potts is the Temporary Assistance for Needy Families Policy Administrator for 

the Ohio Department of Job and Family Services. He has also served as Deputy Director 

of the Ohio Department of Human Services Office of County Operations. Mr. Potts has 

been an integral part of welfare reform planning and assessment in the State of Ohio. 

 And then we will hear from Dr. Heather Boushey, an economist at the Economic 

Policy Institute. Her areas of expertise include labor markets, unemployment, gender and 

race inequality and welfare reform and, as such, she has authored many reports, books 

and articles on these subjects. 

 Finally, we will hear from Dr. Sanford Schram, a professor. Dr. Schram teaches 

social theory and social policy in the Graduate School of Social Work and Social 

Research at Bryn Mawr College. He is the author of numerous books on welfare and 

public policy. 

 Before the witnesses begin their testimony, I would like to remind the members 

that we will be asking questions of the witnesses after the complete panel has testified. In 

addition, Committee rule 2 imposes a 5-minute limit on all questions. 

 I think you all are familiar with how we work here. You have 5 minutes. We 

have your full written testimony in the record. 
6

 We are happy now to turn the time over to you. When that green light comes on, 

your time starts, the 5 minutes; when the yellow light comes on, you have a minute left; 

and when the red light comes on, it is all over. 

 We will hear first now from Dr. Haskins. 

STATEMENT OF DR. RON HASKINS, SENIOR FELLOW, THE 

BROOKINGS INSTITUTE, WASHINGTON, DC 

Mr. Haskins. Chairman McKeon and Mrs. Mink and members of the Committee, thank 

you so much for inviting me today. I am greatly honored to be here. As you pointed out, 

I was also greatly honored to have the opportunity to work on the welfare reform 

legislation and with many of the members and staff of this distinguished Committee. 

And we worked together as a team; the Education Committee played a very important 

role in drafting that legislation. 

 I would like to make just one major point and several minor points. The major 

point is this: Our Nation has decided that it will dramatically change the way it attacks 

poverty and dependency. In the old days, to put it in a colloquialism, "we gave stuff 

away”.

 Between 1964 and 1995, we increased spending on the means testing programs 

from about $40 billion to over $350 billion. And yet child poverty increased. Crime 

increased. Non-marital births increased dramatically. We did not solve any social 

problems despite an explosion of programs and spending. 

 In 1996, the Congress, on a bipartisan basis and in a law signed by a Democratic 

President, decided to change this course and the change involved this: Require people to 

work. Have a much more demanding welfare system that imposes time limits, imposes 

work standards, and sanctions people who don't meet them. Make the public benefits 

contingent on work, and then subsidize the work with an earned income tax credit, with 

food stamps, with Medicaid and a host of other benefits. 

 So, if you like, this is a highly bipartisan solution. For Republicans and hardliners there were tough work requirements that are consistent with what the American 

public expects and wants; and for liberals and Democrats there are very generous work 

supports that mostly have worked well. 

 There are some problems, and we should talk about those. So that is the major 

point I want to make. We should preserve this approach. It is the heart of the reforms to 

require work and then subsidize it. 

 Now, as you pointed out in your opening statement, and I give extensive details in 

my statement, there has been a substantial decline in the rolls. Several of the witnesses 
7

and many economists and others say that it is primarily because of the economy. I really 

cannot give credence to that argument. We had spectacular economies in the 1960s and 

in the 1908s; and the welfare rolls not only didn't decline, they increased; 12 percent in 

the 1980s as the economy added 19 million jobs. That is very difficult to explain if a hot 

economy sucks people off the welfare rolls. 

 So this is the first time that we have had a hot economy that really accounted for a 

substantial decline in rolls. And indeed if you look at figure one in my testimony, you 

will see we virtually never have had a decline in the rolls in the past. So this is 

completely unprecedented, and it is extremely important because it is the first step toward 

independence to get off welfare. 

 Second, and again I think almost nobody denies this, there have been very 

substantial, extremely impressive, unprecedented increases in employment among single 

parent families and especially among never-married, single parent families, exactly the 

families that Congress believed needed to be wrapped in a blanket of entitlement benefits 

because they were not capable of supporting themselves. And they have shown that they 

can move successfully into the workforce into $7- or $7.50-an-hour jobs; and along with 

earned income tax credit and food stamps, which if a mom has two children and earns 

$10,000, as Mrs. Mink offered as an average, that comes to $16,000, which is far more 

than welfare in any other State, even if you include food stamps in the welfare benefit. 

 And indeed, in almost every State, if you take half-time work at a minimum wage 

and get all the benefits to which you are entitled; you are better off than you were on 

welfare in that State. So the system works and employment has increased dramatically to 

kick in these work benefits. 

 Third, poverty has also declined very substantially. I did several different views 

of poverty in my testimony. And figures 1 and 2 both give lots of details. Let me just 

mention a few things. First, in every year, the welfare rolls have declined since 1996, and 

poverty has declined. Now think of that for a minute. Welfare is down more than at any 

time in the past and poverty is down. Black child poverty in 1997 and 1999 declined 

more than in any single year in history, and at the end of 1999 black child poverty was 

the lowest it has ever been. 

 Similarly, child poverty was lower than it has been since the late 1970s. So there 

have been big declines in poverty. 

 I also want to mention that there has been substantial leveling off in family 

composition, in the increase of non-marital births, which is something that has been a 

huge problem in this country; and after several generations, we have a leveling-off. And, 

in fact, the most recent data shows that in 1999 we had a slight up tick for the first time in 

over 30 years in the percentage of kids and two-parent families. 

 There are definitely problems, and I assume we will have a chance to talk about 

those during the question-and-answer period. One of the most important is that some 

families have been left out of this progress, and they are worse off. 
8

 Finally, let me say that in doing reauthorization, Congress, I think, should do 

three things. First, they must maintain full funding. I have no doubt that there will be 

serious attempts to cut the funding; I believe that would be a huge mistake. 

 Secondly, we should perfect the food stamps program, and we have already taken 

small steps in that direction. The single biggest impact on child poverty of anything the 

Congress could do, in my opinion, is to make the food stamp program work so the 

families leaving welfare get their food stamps. 

 And finally, like Mrs. Mink, I would end the illegitimacy bonus. I would also end 

the overall performance bonus, and I would make that money available every year to 

States to do large demonstrations to attack these problems that we just talked about 

families that are worse off, increasing marriage, and also making sure families get their 

food stamp benefits and also programs for fathers. 

 We are on the right track. This new system is working better than anything we 

have had before. We should maintain the direction we are moving in now. Thank you. 

WRITTEN STATEMENT OF DR. RON HASKINS, SENIOR FELLOW, THE 

BROOKINGS INSTITUTE, WASHINGTON, DC – SEE APPENDIX C 

Chairman McKeon. Thank you very much. Mr. Rector. 

STATEMENT OF ROBERT RECTOR, SENIOR RESEARCH 

FELLOW, THE HERITAGE FOUNDATION, WASHINGTON, DC 

Mr. Rector. Thank you for having me here to testify today. 

 Since the beginning of the War on Poverty, this country has spent $8.1 trillion 

aiding the poor. But for most of that period, prior to the 1990s, most social indicators 

about the poor and the conditions of the lower-income class has actually been getting 

worse rather than better. I think that in the mid-1990s, at least with regard to AFDC and 

TANF, we did turn a corner and began to design a new type of welfare system that has 

been dramatically more effective in meeting our social goals and actually helping the 

poor.

 The conventional welfare system basically said two things. It said to a mother 

who had children that we would give her $14- to $15,000 a year in combined welfare 

benefits on two conditions. We didn't just hand this out. We were very precise. We said 

we don't want you to work and we don't want you to be married to an employed male. 

 I call this "The Incentive System From Hell." It is a truly psychotic system that 

has destroyed the lives of millions of children, and it is very disturbing to me to hear any 
9

suggestion that we would return to that type of system of open-ended, one-way 

entitlements that rewards non-work and non-marriage. 

 When we passed welfare reform, almost all of the welfare establishment in this 

country was unanimous in its dire predictions. They told us that even in good economic 

times, and I repeat, even in good economic times, that bill would increase the number of 

poor people in the United States by 2.6 million. But, in fact, what has happened is that 

we have decreased the number of poor people in the U.S. during this period by nearly 5 

million. There are 2.3 fewer million poor children in the U.S. Today. 

 But, at the same time, as poverty has gone down, the welfare caseload has been 

cut by roughly 50 percent. The black child poverty rate is now at the lowest point in U.S. 

history. At any point in the history of this country, from 1757 to the present, we now 

have fewer black children in poverty than at any other time. 

 The poverty rate of children living in single-mother families is now at the lowest 

point in U.S. history, the lowest point in any measured point. From 1775 to the present, 

we have fewer poor children and single-parent families than ever before. 

 Everyone told us that this bill would generate huge increases in child hunger. In 

fact, according to USDA, the child hunger rate in the United States has been cut in half in 

the last 4 years. 

 The deep poverty rate, the percentage of families with incomes less than half the 

official poverty threshold has also been substantially cut by over a million families during 

the same period. 

 Employment of single mothers, particularly the quote, "least employable single 

mothers" has increased at really almost unbelievable rates. If you look at single mothers 

who are high school dropouts, the single mothers who were never married, these are our 

most vulnerable group. Employment in that group has increased some 50 to 100 percent 

since the passage of reform, absolutely unprecedented changes. 

 The out-of-wedlock childbearing rate when the War on Poverty began in 1965, 7 

percent of children were born out of wedlock. During the entire course of the traditional 

War on Poverty, that rate grew at almost 1 percent per annum until, by 1995, the rate was 

around 32 percent, increasing at about one percentage point a year. And if we had 

continued that trend, we would now be approaching close to 40 percent of all American 

children born out of wedlock. 

 But what happened was, that rate leveled off and has flattened out. The 

percentage of black children residing in married-couple families, for the first time in 

recorded history since the last half century, has actually substantially increased, thereby 

contributing to a decrease in black child poverty. The percentage of black children 

residing simply with single mothers has gone down substantially. 

 Almost any credible analysis would say that these changes are unprecedented and 

they cannot be linked to any changes in the economy. The economy was clearly a good 

background-contributing factor, but the economy alone would not have been at all 
10

sufficient. It was the good economy, coupled with the work requirements in the act that 

caused these significant changes. 

 Now, if I would just point out two things that we need to look at in the future.

One is, it is completely erroneous simply to look at data on mothers that exited off the 

AFDC rolls. The most important thing is that many, many mothers never entered AFDC 

or TANF, and thereby had a better route out of poverty because they never fell into 

dependence in the first place. 

 The second thing to recognize is that welfare spending, even with this reform, 

continues to grow too fast. Today, we spend $1.30 on means-tested aid for every $1 we 

spend on national defense. Under the President's proposed budget, that will rise in the 

next 5 years to $1.70 on means-tested welfare for every $1 on national defense. Clearly, 

we cannot continue to simply expand in that manner. 

 Thank you very much. 

Chairman McKeon. Thank you. 

WRITTEN STATEMENT OF ROBERT RECTOR, SENIOR RESEARCH FELLOW, 

THE HERITAGE FOUNDATION, WASHINGTON, DC – SEE APPENDIX D 

Chairman McKeon. Mr. Potts. 

STATEMENT OF JOEL POTTS, TANF POLICY ADMINISTRATOR, 

OHIO DEPARTMENT OF JOB AND FAMILY SERVICES, 

COLUMBUS, OHIO 

Mr. Potts. Yes, sir. Thank you Mr. Chairman, members of the Committee. 

 In Ohio, we have been able to successfully implement the Ohio Works First 

welfare reform program. The unprecedented flexibility and approach afforded the agency 

by Congress has allowed Ohio to move forward with fundamental reform in the welfare 

system. While safety nets still remain in Ohio to serve the children of those who do not 

work, the primary focus of welfare reform in the State has moved from a system focused 

primarily on providing cash payments to a system bringing stability and self-sufficiency 

to people's lives through the promotion of a Works First workforce philosophy. 

 Today, there are fewer Ohioans receiving monthly benefits than at any time since 

1967, a 74 percent reduction. This reduction in caseload has provided the State with 

significant funding to go along with the flexibility provided by Congress. The result is a 

model for welfare reform highlighted with more families being served, fewer welfare-
11

dependent families, increased earnings, decreased poverty for those formerly in the 

system and broad community support and involvement. 

 We operate our system in Ohio very much like TANF is functioning with the 

States. We provide the same types of flexibility in more or less block grants, a good 

portion of the funding to the counties. And the counties have done a lot of very unique 

things that we would have never thought possible before. 

 I would like to point out also, I think one of the real misunderstandings about 

welfare reform, especially in Ohio, but certainly in the other States that I have worked 

with, this has not been a harsh approach on welfare reform. This has been a very 

compassionate approach. It has allowed us to do things and work with families in a way 

that would never have been funded or allowed in the old AFDC program. 

 To meet the needs of poor families, these counties are now making use of the 

programs in a wide variety of ways to deal with problems unique to their communities. 

Just quickly, a couple of examples: 

 In Hamilton County, or Cincinnati, they work with a group of not-for-profit 

individuals and groups to provide services to what we used to refer to as the hard-toserve, generational welfare families. They have worked with these families since 1997. 

They have worked with over 3,000 families that, again, were generational. Of those 

3,000 families, fewer than 150 have returned to public assistance. The rest have been 

able to stay off the system at an average cost of $1,500 per case served. 

 In Montgomery County, in Dayton, Ohio, they have worked with juvenile justice 

systems and have taken 150 cases of individuals that had been repeat offenders, and they 

have had problems in and out of the juvenile justice system for years; 150 of those 

individuals were referred to the county child and family service agencies if they were 

already involved in the welfare system. 

 Over the last 18 months, the agency has been able to work with these families and 

work with these children; and of those 150, only one of them has returned to the juvenile 

justice system, with 40 percent of those individuals being teen women. There have been 

no teen pregnancies during that period. 

 Again, it is unprecedented the types of things they have been able to do. But, 

again, the primary focus is clearly on work. 

 We want to make sure the cornerstone of welfare reform in Ohio remains and we 

want to make work pay. Frankly, I think it is unconscionable that we operated a system 

in this country for 60 years that encouraged people to stay home, instead of providing 

support so that they could work, get out of poverty and provide adequate support for their 

families. And what we are finding is nothing short of remarkable. 

 We are finding that they are working, that two-thirds of former recipients are 

currently in the workforce. Of those who are not working, according to studies that we 

have performed, over 90 percent of them said they were not currently looking for work.

They are working a full week or averaging 38-1/2 hours. Their earnings are up, earning 
12

on average, in Ohio, $8.65 an hour or $1,410 a month. 

 Their children are over 83 percent indicate that their children have health care 

coverage. They are finding work close to home; 50 percent of those respondents travel 

less than 15 minutes to work and 85 percent of them travel less than 30 minutes. 

 And they are not coming back. Most say that they don't intend to return to the 

system. For the first time in our history, we are spending more money in welfare dollars 

to support work than to support dependency. 

 I think in order to really understand what we are doing you have to recognize that 

welfare reform is a package. You can't look at it as an individual thing. It is not just the 

economy. It is not just sanctions. It is not just time limits. It is not just work supports. 

Different things will motivate individuals in different ways. And what we have been able 

to do is put together a package that really helps provide the support families need to break 

that cycle of dependency and to get out of poverty. 

 Our requests from Congress for reauthorization are quite simple. We have three 

things we would like. First, stay the course. We think that with the 34-year low in case 

loads and studies show that 60 percent of those families formerly dependent on welfare 

are no longer living in poverty is a clear indicator that this is a much better way to spend 

our funding than to support dependency. 

 Second, we urge Congress to continue funding at the same levels. 

 And, third, we want to continue the option to transfer 30 percent of TANF dollars 

to the Child Care Development Fund and social service block grants, which provides 

tremendous support services to again help us make work better. 

 We are at a true crossroads. We know more about these families than we have 

ever known before. We learned more in the last 5 years than we knew in the last 60 

years.

 We talk about the hard-to-serve; the truth is, some of these families were never 

served. We didn't know what their needs were. We now know an awful lot. We have 

had experiences and experiments from all over the country that we can learn from. 

 We need to decide whether we want to go forward or not. Something we have 

always known is that employment is the best long-term plan for parents in order for them 

to be able to support their children, and we would like to continue in that process. 

 Thank you. 

Chairman McKeon. Thank you very much. 

WRITTEN STATEMENT OF JOEL POTTS, TANF POLICY ADMINISTRATOR, 

OHIO DEPARTMENT OF JOB AND FAMILY SERVICES, COLUMBUS, OHIO 

– SEE APPENDIX E 
13

Chairman McKeon. Dr. Boushey. 

STATEMENT OF DR. HEATHER BOUSHEY, ECONOMIST, 

ECONOMIC POLICY INSTITUTE, WASHINGTON, DC 

Ms. Boushey. Thank you, Chairman McKeon and Mrs. Mink, for inviting me to speak 

here today. 

 The Personal Responsibility Act marked a profound change in American social 

policy, and it is a privilege to be able to talk to you about this legislation's effect on 

working families. Since this legislation was passed 5 years ago, researchers have 

undertaken a great deal of research to understand what has happened, and I would like to 

go over a few of the most important findings. 

 First, we all know and it has already been pointed out today that case loads have 

fallen dramatically, and they began falling prior to the passage of the Personal 

Responsibility Act. However, economists have looked at this issue and found that a great 

deal of the falling case loads can actually be attributed to the strong economic growth and 

strong labor demand that we experienced in the second part of the 1990s. In fact, most of 

the fallen caseload is attributable to the strong economy. 

 As the economy dips into a recession over the next few months, we must be clear 

about the limits of this piece of legislation to help people acquire and maintain 

employment as unemployment rises. Many families have been unable to maintain fulltime, stable employment even during this economic boom. 

 We know from studies in communities and States around the Nation that 40 to 70 

percent of families have someone who is working. Among those who are working, 

however, only a slight majority are working more than 35 hours a week. This means, at 

most, in communities all around the country that only a slight majority, and perhaps a 

minority, of former welfare recipients are employed in stable, full-time employment. 

Again, as we think about what is going to happen as the economy dips into a recession, it 

may be difficult to maintain these employment levels with rising unemployment. 

 For those who are employed, wages are often too low to enable families to escape 

poverty and to avoid material hardships. Average wages for former welfare recipients 

range from $6 to $8 per hour, which puts these families below the poverty line. Those 

low wages show up in a proportion of working families living in poverty. 

 Although poverty has fallen dramatically for most families around the country, 

there is one demographic group for whom it has not fallen, and that is for people living in 

families headed by a single, working mother. Between 1995 and 1999, the poverty rate 
14

for these kinds of families remained stagnant after accounting for taxes and transfers. 

 Further, people living in families headed by a single, working mother are actually 

deeper in poverty now than they were in 1995. This is after substantial decreases in the 

poverty rates for these families between 1993 and 1995. 

 There are real consequences for these high poverty rates for these families. 

Among families that left welfare over a year ago, who have a full-time worker, the 

success cases, one-quarter of them go without food, adequate shelter or necessary 

medical care. 

 And we have made great progress in implementing the kind of work supports that 

could help families move into employment and care for their families. However, we still 

have very far to go. Looking only at child care as an example, particularly because it is 

such an important area seeing as welfare families are, by definition, almost always 

families with young children headed by single women the total Federal dollars available 

for child care have nearly doubled since the early 1990s. But, still, only about 12 percent 

of families who are eligible for these subsidies are actually receiving it. 

 So I cannot stress enough that it seems to be one of the most important areas to be 

thinking about in terms of TANF reauthorization. There is some good news, but for 

millions of the current and former welfare recipients, the economic well-being has not 

improved. 

 I cannot stress enough the role of the strong economy that we experienced in the 

second half of the 1990s and the potentially less robust economic times in front of us. 

The long economic boom is surely over now, and the tragic events of last week will most 

likely tip the economy into a recession. 

 The unemployment rate had jumped four-tenths of a percentage point in August 

and it is highly likely that it will jump again when we get the numbers for September. 

This is a full percentage point higher than it was a year ago. 

 Since the success of TANF was highly dependent on strong labor demand, we 

need to be thinking about ways that TANF reauthorization can work with policies to help 

keep unemployment low and policies such as raising the minimum wage to help these 

families maintain employment. 

 Thank you. 

WRITTEN STATEMENT OF DR. HEATHER BOUSHEY, ECONOMIST, 

ECONOMIC POLICY INSTITUTE, WASHINGTON, DC – SEE APPENDIX F 

Chairman McKeon. Thank you. Dr. Schram. 
15

STATEMENT OF DR. SANFORD SCHRAM, GRADUATE SCHOOL 

OF SOCIAL WORK AND RESEARCH, BRYN MAWR COLLEGE, 

BRYN MAWR, PENNSYLVANIA 

Mr. Schram. Thank you, Chairman McKeon and Congresswoman Mink, for inviting me 

here today. 

 Some aspects of welfare reform have worked for some families. Some aspects 

have not, so much so that I would suggest that the much-heralded claim that welfare 

reform is a success is very much premature. 

 A good part of the problem stems from the fact that public discourse has, in 

questionable ways, shifted the frame of reference from poverty to dependency. As a 

result, reductions in welfare caseloads are misleadingly seen as the primary measure of 

success, when poverty remains the pressing issue. 

 In addition, numerous claims have been made for the success of welfare reforms 

that are questionable at best. These claims are that welfare reform has reduced poverty 

and done other wonderful things for families. Yet I would suggest that important 

questions need to be asked about these claims before we can develop a clearer picture of 

what welfare is doing. Taking a critical eye to existing research helps us pose these 

questions.

 First, contrary to numerous claims, it is not even clear from available research that 

welfare reform is the major reason for the dramatic declines in case loads that occurred in 

the early 1990s. Economic growth of the 1990s may very well have been a much greater 

factor in reducing the number of recipients, and reform of welfare may have, instead, 

played only a marginal role. 

 In addition, where welfare reform has had an effect, it has most often been where 

the economy has created opportunities for people to forgo needed assistance. 

 Lastly, welfare reforms limited contribution to reducing caseloads has included 

forcing people off welfare when they are not ready to support their families on their own. 

Sanctions are far less effective than education in promoting self-sufficiency. Therefore, 

for these reasons and others, caseload declines that have occurred should not be seen as 

primarily the result of welfare reform assisting people to leave welfare. 

 The focus on welfare reform as the key factor in reducing the case loads has been 

overemphasized and exaggerates the extent to which reform is helping recipients leave 

welfare and achieve self-sufficiency. 

 Second, there is no real evidence that welfare reform has done much to reduce 

poverty. The trend line data that is offered by some analysts is misleadingly confusing 

correlation with causation. While poverty rates overall have declined during the years of 

welfare reform, it is not clear that it is the result of welfare reform. More to the point, a 

recent report from the Center on Budget and Policy Priorities indicates, quote, among 
16

people in families headed by working single mothers, there is no progress in reducing 

poverty between 1995 and 1999 despite an expanding economy. In fact, it very well may 

be the case that welfare reform has erased what poverty reduction the economy produced 

among single mothers with children. 

 While economic growth in the 1990s reduced poverty among the single mothers 

with children, welfare reform increased poverty among this group. The net effect has 

been that poverty levels for single mothers with children have not changed much at all, 

even as poverty has declined among the population overall. While economic growth was 

reducing poverty for single mothers with children, welfare reform replaced welfare 

receipts with low-wage jobs for many and no jobs for still others. 

 In addition, welfare reform has resulted in many families who now go without 

assistance also not receiving needed entitlements of food stamps, medical assistance and 

childcare. As a result, welfare reform has for many families resulted in net reductions in 

income transfers for government, thereby reducing their incomes and erasing the gains in 

income that have come from taking paid employment. 

 Third, the overemphasis on the people leaving welfare has led to insufficient 

attention being given to the hardships suffered by family who have left welfare. Studies 

of "leavers," as they are called, indicate that most are working, but not full-time; and 

many others, as much as a third, are not working at all and are without consistent income 

support. Many of these "leavers," as many as half, are among the families that end up not 

getting needed assistance such as health insurance, food stamps, child care and the like 

for which they remain eligible. 

 Therefore, low wages, underemployment and other factors are combined with a 

bureaucratic disentitlement to the make the transition extremely painful for many families 

leaving welfare. As a result, the overwhelming majority of the "leavers" remain poor 

several years after going off public assistance. Therefore, a closer examination of the 

research on welfare raises troubling questions about its effects and calls into question its 

supposed success. 

 Welfare reform has not been known to play a major role in reducing welfare 

dependency; it is also being shown to increase poverty. It is imposing new hardships and 

introducing new forms of discrimination. Thank you. 

WRITTEN STATEMENT OF DR. SANFORD SCHRAM, GRADUATE SCHOOL OF 

SOCIAL WORK AND RESEARCH, BRYN MAWR COLLEGE, BRYN MAWR, 

PENNSYLVANIA – SEE APPENDIX G

Chairman McKeon. Thank you very much. One thing that I didn't hear any of you 

address, maybe I just missed it; but it seems to me that when people get off of welfare 

that there is a benefit other than dollars and cents, and that is the help that it gives to their 

self-esteem. 
17

 I was visiting a program in our county, and one of the ladies that had graduated, 

gone through the program starting from very low level, training up to, you know, how to 

get a job and helpful measures in teaching her. This lady had been on welfare for years, 

and she was back now as a graduate; successful, off the program, talking to a class of 

participants in the program. And the story she related to them, how much better she felt 

about herself and how her children felt better about her; and how she was now able to 

buy them shoes and the things that they desired that she never could help them with 

before, and how much better she felt about herself and the fact that she never ever again 

was going to let herself fall into needing welfare. 

 It seems to me that that is one of the great benefits that we can't compare just in 

dollars and cents, but just the good feeling that a person has when they are able to provide 

for themselves, which I know that we would like it see all people able to accomplish. 

Dr. Haskins, you mentioned that you had other problems that the 5 minutes didn't give 

you time to relate to. Let me just give you one question and maybe you can address that, 

and we'll talk about some of those other things. 

 In your testimony you State that Congress should address the plight of 

floundering families that have found it difficult to either work or maintain their eligibility 

for welfare, as well as families that are working, but having difficulty advancing to better 

jobs. You suggest Congress can do this by establishing demonstration programs to 

determine effective means of assisting these families. 

 Can you share any examples of existing demonstration projects in States that aim 

to address these issues and assist these families. What successes are States and localities 

having in this? 

Mr. Haskins. We don't know at this point what success States are having, because we do 

not have any good evaluations of these studies that I am aware of. Some of the other 

panelists may be aware of it. I do know that this is an effect that was almost inevitable, 

that if you are going to have a system based on work, which apparently we now are, there 

are going to be families that have trouble working. They have personality disorders, they 

have borderline retardation, they have lots of children, and they have transportation 

problems and so forth. 

 And we have pretty good studies showing that there are lots of families with these 

multiple barriers to employment. So we shouldn't just forget them. They are on the rolls 

both because they haven't been able to get off and, even worse, they are off the rolls and 

we lose track of them because they don't even meet the demands of the welfare system. 

In the old days they could just stay on welfare forever. They can't do that anymore, so 

they are both off the rolls and they are on the rolls. 

 So what we should do is learn how to do a better job with these families. Now 

there is a woman named Toby Herr that would be excellent, if you are interested in 

pursuing this. She is in Chicago, and she has been studying this problem for years and 

years; and probably the main message that comes out of her work is small steps, lots of 
18

failure, go back to the beginning. 

 It is exactly like addiction programs. Addiction programs take in a bunch of 

people. They don't work. Maybe 10 percent of the people stay out, you know, on the 

wagon for a year or more. But if the clients come back for a second and third and fourth 

time, and if they remain committed, then they succeed. And that is the same thing that 

Toby Herr has found with these families, that eventually they can become productive, 

they can hold a full-time job. 

 Now, I do think that we should realize that not everybody will be able to do that.

I think we will always have a certain number of families that will not be able to support 

themselves. And so I think we have to have a system that allows for them to stay on 

welfare well beyond the 5-year limit. 

 We have a 20 percent exemption now. When we passed the 20 percent 

exemption, Congress thought that was a big denominator. It is 20 percent of a big 

number, 5 million, and now it is down to almost 2 million, so it is many, many fewer in 

that 20 percent. 

 But no State has yet shown that it needs more than 20 percent. I think we ought 

to look at that number. The Committee should try to find if 20 percent is an adequate 

number. The trick is to maintain that tension so that people feel the pressure to get off 

welfare, which I think is what has been driving the case load down, because people feel 

they must work as a responsibility, and yet accommodate people who in the end cannot 

do it or cannot do it consistently. 

Chairman McKeon. As I talk to people about welfare, those on and those that are not, 

they all seem to have a concern, they want able-bodied people to work. They want those 

who are not able-bodied always to be able to receive assistance. And I think people are 

pretty consistent in that feeling. 

 And I see my time is up. Mrs. Mink. 

Mrs. Mink. Thank you, Mr. Chairman. I thank the panelists for their testimony. 

 There appears to be a wide distance between the statistics that are cited by the 

three gentlemen on my left and the two witnesses on the right with respect to the degree 

of poverty that continues to affect families on welfare. And as I listen to the testimony, I 

have to conclude that the statistics that show a downturn in poverty most likely have to 

do with the general conditions of our society; less people in the poverty arena, based 

upon total statistics for the entire population. 

 My concern is, a definition of the condition of families who were on welfare and 

who went off welfare; the statistics cite that everybody went off of welfare, went into job 

training, or education, and found a job, and were then taken off welfare. 

 To what extent do we know the specific condition of this group of persons over 

the last 5 years who were on welfare, the ones that are cited most, that were on welfare 

for a number of years, and because of the enactment of the welfare reform legislation, 
19

then were put on a job track, obtained a job, and were then taken off of welfare. 

 If I could ask Dr. Schram first, do we have any good statistics that track the 

people on welfare, not just relate to the general economic conditions in our society of the 

total poverty among children, hunger among children in general, or the number of black 

Americans in poverty and so forth that we have heard earlier? Do you have anything that 

we could look at that relates specifically to our welfare recipients that we were directing 

the 1996 legislation towards? 

Mr. Schram. Yes, I think that is a really good question, and I like the way you framed it. 

In terms of the general population, overall things have improved. For the welfare 

population I think it is a much different story and the picture is somewhat murky. 

 There are a lot of studies, and in fact, there is major survey being done by the 

Urban Institute that looks at families over time, the National Survey of American 

Families, and there is a lot of good evidence in that. It indicates that families leaving 

welfare are confronting all kinds of problems. I think when their incomes go up, they are 

doing better; and that would be great. 

 But for a lot of families leaving welfare, their net income is not going up; their 

wages may be higher; they may be working more; they may actually, in that sense, have 

more paid income coming in, which may increase their self-esteem if they can continue 

to sustain employment, which they often cannot; and find it very debilitating and 

crushing to their well-being, psychologically and emotionally, when they have to go back 

on welfare, which nobody wants. 

 They, however, often find that their incomes go down. And there is increasing 

research that indicates when their incomes go down, especially because they are not 

getting their income transfers that they got before; especially their Medicaid, their food 

stamps, their child care that they remain eligible for, and for various reasons are not 

getting; then they don't do as well. 

Mrs. Mink. Well, what are those various reasons that they are not getting this other 

program assistance, even though they are entitled? What is the main obstacle that 

prevents them from getting these other entitlements, which other panelists have said, if 

you add to their low wages, means that they are getting more? But the problem is, they 

are not receiving these? 

Mr. Schram. Right. I think this is a really big issue that reauthorization needs to 

address seriously. I think Congress had foresight and it put aside money to help States 

deal with what they call "decoupling" when these entitlement programs are going to be 

separated from welfare, and people were to get them even after they were no longer 

receiving welfare. 

 But a lot of States didn't use all that money. When they did use it, they didn't use 

it effectively. There was a lot of confusion. Caseworkers weren't really prepared for the 

shift. Clients were confused as well. 
20

 The system is largely designed to make sure people don't get benefits that they 

aren't entitled to. It is not designed to reach out and get people who are entitled to get 

their benefits. And we were just caught unprepared for this shift. Even though we tried 

to put money in the bill and tried to anticipate this, the problem is much larger and 

continues to persist in States across the country, where family after family is leaving 

welfare and they are not getting their entitlements. And in many cases, that means the net 

effect is that their income, overall, their net income, is going down. 

 And there is now evidence coming in that children under those circumstances 

aren't doing well, that their school performance declines, that their overall well-being 

declines. 

 And this is a major issue. A lot of families are moving off welfare, and the net 

effect is a decline in their income and a decline in family well-being, and this needs to be 

addressed.

Mrs. Mink. Thank you, Mr. Chairman. Are we going to have a second round? 

Chairman McKeon. Mr. Isakson. 

Mr. Isakson. Thank you, Mr. Chairman. 

 You know, as I listen, it is two members of institutes and economists and a 

professor; and the numbers of two of them are diametrically opposite to the others' 

numbers on exactly the same subjects. And if you read the testimony, it just depends on 

who subtracted what from which basis as to whether it justifies their position. 

 So I would like to ask my questions, and I respect the testimony of everybody, but 

we are really trying to find out. I particularly like what Dr. Haskins said about us not 

forgetting about those places we need to do some things to fix, which there certainly are. 

 But I thought Mr. Potts, the testimony that I read and the testimony that he gave 

was compelling, particularly with regard to the prevention, retention and contingency 

program in the State of Ohio. And we really ought to be focusing on those types of 

things rather than trying to justify whether we have done good or done bad. 

 I would just observe that if the welfare rate never declined until after this passed, 

then there is some reason to believe the economy wasn't the total reason that worked; and 

it doesn't take much to figure that out. 

 I want to ask Mr. Potts, as I understand the prevention and retention and 

contingency, that is primarily designed to provide training as well as assistance and 

include public diagnosis of problems where those who have, as the professor said, left the 

welfare system, so they don't lose benefits that they are still entitled to. Am I correct? 

Mr. Potts. Mr. Chairman and members of the Committee, absolutely. About half the 

prevention, retention and contingency program in Ohio focuses on direct supports for 

work and training, ongoing supports. In many cases, we work with employers. 
21

 One of the staggering statistics that we had heard early on from business was that 

they felt that over 57 percent of the employees that they currently had would be the same 

employees they would have 10 years from today, but that less than a quarter of those 

employees actually had the types of skills that they felt would be necessary to be able to 

perform the job, as computer technology and different things caught up to them. 

 So we are focusing down to the community level. What does it take to help 

stabilize peoples' lives? Once we get them into work, how do we keep them at work? 

How do we continue to provide that continuing service so that they never fall back into 

the system? 

Mr. Isakson. Does the contingency portion of the acronym, the C in the acronym to 

those contingencies the doctor was addressing, that people who were eligible weren't 

getting, such as in health care and Medicaid, if the numbers are true in what they are 

making, they are still Medicaid eligible. 

 The CHIP program certainly can cover their children, but I know from my 

experience in Georgia, many people aren't getting information about it. Therefore, they 

are not getting covered. The benefit is there, it is just the education is not. 

 Is that what the contingency does? 

Mr. Potts. Mr. Chairman, Congressman, it could. A contingency is any type of 

emergency situation that family is facing that we need to address immediately. It could 

be things as simple as the car breaking down, the hot water tank going out, maybe there 

has been a flood that has damaged property. Maybe there has been a fire. 

 But it could also be the types of things referring to food commodities. For some 

reason, something happened; they need help in those areas. So it is any type of thing that 

we deem to be an emergency, one-time crisis situation that family is facing. 

 There are specific prohibitions in TANF that we can't use those dollars for health 

care, so we can't use them for those specific things. But we are using it for a lot of 

counseling referrals, casework management, long after the family is no longer eligible for 

cash assistance. 

Mr. Isakson. How closely does the department track a former recipient after they gain 

employment and go off the rolls? 

Mr. Potts. Mr. Chairman, members of the Committee, that is a great question. 

 Probably the biggest challenge we have had early on was to find out what 

happened to families once they left the system. For 60 years nobody asked. You know, 

we had 30-, 40,000 people who left public assistance every single month. Even though 

our caseloads may have been showing only a slight increase during these periods, there 

was always a churn. You could have 30- or 40,000 going off, 30-, 40,000 coming on. 

Nobody ever asked. 
22

 And frankly, when people are on public assistance, they don't like dealing with 

bureaucracies anyway. They don't like us prying into their personal lives. So when they 

left the system, the last thing that they wanted to do was talk to a caseworker on the 

phone and have somebody showing up on their porch and saying, What is going on? 

How is everything going? Can you answer some of these questions? 

 It was a real challenge early on. It has also been a real challenge for States in 

particular, the types of things that we have heard, the types of measurements of whether 

or not this a success or not. 

 If you read the Personal Responsibility Act, one of the things that is most glaring 

is, there is no mention of poverty in there whatsoever. You know, we were talking about 

totally turning a system upside down, on its head, creating a temporary program, focusing 

on work; and without question, every State that I have worked with has been successful 

in doing that. By "work," I think common sense would tell you if you really want to get 

somebody out of poverty, the only way you are really going to be ultimately successful at 

doing that is by supporting work; and I do think that the reduction in poverty is a byproduct of welfare reform. It wasn't the goal of welfare reform. 

 So the measurements and the types of things that we are looking at, that target 

keeps moving, and whether we consider it to be a success or not depends on, you know, 

which side of the aisle you are on. 

Mr. Isakson. Thank you, Mr. Chairman. 

Chairman McKeon. Ms. McCollum. 

Ms. McCollum. Thank you, Mr. Chairman. This is a very interesting and important 

topic that we are going to be dealing with. I was at the receiving end as a State legislator 

when the devolution came forward for this, so I worked on this as a State issue. And I 

am just going to briefly, Mr. Chairman, go through a few bullet points and then let the 

panel possibly respond, rather than direct individual questions, because my time is so 

limited. 

 Housing plays a huge and critical role and we know that housing is just as 

important as parents working to provide children stability, especially in education. In 

Minnesota, where I represent the metropolitan area, housing is at a crisis level for all 

families; child care, waiting lists for child care, child care being available when States 

were putting in educational programs, so that they would track with their vocational 

schools. And our 2-year institutions are in crisis and continue to be. 

 Health care, Minnesota had MinnCare, which had some provisions for poverty, 

working families. When the TANF and the child care CHIPS program and all the health 

care programs came in, Minnesota found itself being held in harm's way for having 

instituted programs. Before, it has handcuffed us from moving forward for families, 

especially those coming off welfare. 

 Education, 2-year programs, 18-month programs, and childcare: What do you do 

about somebody working? Do we expect a single mother to go to school, work part-time, 
23

and then be a responsible parent being active in their child's development? 

 And I see the gentleman from Ohio. These are States' issues. 

 I am going to talk as a private sector manager for a few minutes. This is where it 

gets tricky for me. I know that the private sector works very carefully to keep down at 

times with some employers the amount of hours employees are working, because it kicks 

them into receiving health care and other kinds of cost benefit analysis. I know that 

because I used to get the report delivered to my desk, red-flagged for employees that had 

gotten to the point where they were at 32 or 35 hours consistently for 4 weeks in a row. 

 And then the other thing that I am finding very interesting in this discussion, Mr. 

Chairman, and we need to work as a Committee, working off one set of statistics, one set 

of definitions, so that we are all talking the same thing when we hear from panelists, 

when we hear from each other; because I am very interested in the statistics that were 

used by Mr. Rector in particular, which talked about the number of dollars spent on 

welfare.

 And so I will start with that question, and then people can respond to the rest. 

Mr. Rector, did you just include single families in your welfare, quote, unquote, 

statistics? Or did that include people on permanent Social Security disability? Did that 

include senior citizens? 

Mr. Rector. The statistics I used are my own, but they very closely track a report that is 

done every 2 years by the Congressional Research Service. They are the total spending 

on means-tested or income-tested aid in the U.S. Means-tested programs are programs 

that are only available to someone below a certain income level. So food stamps, for 

example, are means-tested. 

Ms. McCollum. Mr. Chairman, if I may, I asked, I thought, a fairly simple question. 

Did you include more than single mothers and single families in your statistics? Yes or 

no? 

Mr. Rector. Yes. 

Ms. McCollum. Thank you. 

Mr. Rector. Single mothers receive about $150 billion a year out of total means-tested 

aid of 430 billion. But you do have to look simply beyond TANF to recognize that of all 

the aid that we give, we spend about $200 billion a year in means-tested aid for families 

with children. About 80 percent of that goes to single-parent families with children. 

 The welfare system as it affects children is almost exclusively a subsidy system 

for single parenthood. And if we had not had the collapse in marriage that we have had 

over the last 25 years, welfare, as this Committee understands it and as we currently 

spend money on it, simply would not exist at all. You have very close to a $150 billion 

expenditure that is the result of the growth of single parenthood. 
24

 Virtually the bulk of child poverty in the U.S. is also the result of this growth of 

single parenthood where we now have one child born out of wedlock about every 25 

seconds. This is a huge national tragedy, and one of the goals of welfare reform that I 

don't think we did all that well with was trying to reduce out-of-wedlock childbearing.

There have been some good secondary effects that have come from the work standards, 

but we need to do much more about that in the future. 

Chairman McKeon. Mr. Johnson. 

Mr. Johnson. Thank you, Mr. Chairman. 

Dr. Haskins, I wonder if you could tell me, in your view, I think you said many young 

mothers who leave welfare for work lose their jobs and come back on the welfare roll. 

Do you know what the common reason for that is? 

Mr. Haskins. I would say, by far the most frequent reason is a voluntary separation from 

employment. That certainly is true in coverage for unemployment. In order to get 

unemployment benefits, you have to have lost your job. You can't voluntarily separate. 

 And there have been studies that have shown that most of the women who are no 

longer employed and used to be on welfare, they don't qualify for unemployment 

insurance, not necessarily because they didn't meet the income standards and so forth, but 

because they voluntarily left their employment. 

 Another reason is undoubtedly that they lost the job. The job went away. 

 We are going to see a lot of that in this area over the next 6 months, and that is a 

perennial problem. A lot of low-wage jobs are temporary jobs, and people take them and 

work for 3 months or 3 weeks or 6 months, and then the job goes away, or the company 

folds; or there could be any number of reasons. So there are a whole host of reasons why 

mothers lose their jobs. 

 Also, another cause that people talk about, I have never seen a number on it, but it 

is a demise of childcare arrangements. Mothers run into problems with their childcare 

arrangements, and they are late or they miss days of work; and then they get fired, or they 

quit.

Mr. Johnson. Mr. Potts, are you in agreement that they lose their jobs because of 

unemployment insurance? 

Mr. Potts. Mr. Chairman, members of the Committee, one of the things we are trying to 

study now also is, what are those driving factors. One thing that is fairly clear in the two 

statewide studies that we have done is that individuals that get jobs that don't provide 

benefits are the ones that are most likely to return. The more benefits they have, the less 

likely we are to see them return to the system. So we certainly have seen some indication 

of that. 

 We do some things in Ohio to help the employers even pay for the unemployment 

insurance, you know, to take chances to hire individuals that they may not have 
25

considered in the past. So it is certainly a problem. 

Mr. Haskins. Mr. Johnson, I didn't mean to say they lost their jobs because of 

unemployment insurance. What I said was that if you look at why mothers who left 

welfare do not qualify for unemployment insurance, it is because they voluntarily 

separated from their jobs. They left their employment without being laid off, and under 

our unemployment insurance systems, you can't cover someone who leaves voluntarily. 

They have to be laid off. 

Mr. Johnson. Yes, but the question I asked you was why. And I think she indicated that 

it is hard for a woman to do childcare, work and go to school all at once; and I understand 

that. Do you think she is correct in that assessment? 

Mr. Haskins. I think we are at a disadvantage here because I don't think we have good 

numbers for this. 

Mr. Johnson. So we have no studies? 

Mr. Haskins. I wanted to make the point to you, Mr. Johnson, that many of these 

separations are voluntary. One of the criticisms of the low-wage job market is that 

crummy jobs, they go away and people lose them and so forth. But there is control that a 

person has in those jobs, that in many cases based on their own decisions, whether it is 

their child care arrangements or whatever other factor, that they decide that they are 

going to leave the employment. And we shouldn't lose sight of that. That is a very 

important factor in answering your question. 

Mr. Johnson. Okay. 

Mr. Rector, you had a comment. 

Mr. Rector. I think that probably the best way to approach this idea is to recognize that 

for very low-skilled workers; and the typical welfare mother has math and cognitive skill 

levels at 15 percent of the 85 percent of people are better skilled than she is. They have a 

hard time staying consistently in work. 

 However, if you look at the State of Wisconsin now, Wisconsin has cut its 

caseload by over 90 percent. And the remaining 10 percent of adults in Wisconsin are all 

engaged in community service work full-time. And what they found is, it is very 

difficult. 

 If your sole goal is just to say, we are going to take a hard-to-employ mother and 

try to put her in a job where she is never going to lose it, it doesn't work that way. But if 

you get her out and get her a job, she will bounce back in. But what they do is, when she 

comes back on the roll, the very day she comes back on the roll she goes back into 

community service work. She goes back into a sheltered workshop. 

 So she is always engaged. And what they find is when they do that she goes back 

out again. And she does, she bounces in and out because that is the nature of life. 
26

And she bounces in and out because that is the nature of life. But as long as you 

say, we welcome you back. If you lost your job, by gosh we are here to help you. And I 

believe with the bottom of my heart. But when you come back on the roll, you have to 

everyday from the day you come back on, be engaged in constructive activity or 

community service work as a condition of getting the aid. And when you do that they 

don't stay on the roll very long. They go back in and they work their way up. It is never 

going to be a straight shot, where we get you one job, that it is it forever, good-bye, we 

don't have to worry about you. They are going to move in and out of the roll. But as 

long as you keep them busy you are going to help them climb out of poverty. 

 As a result of that, the child poverty rate in the State of Wisconsin has been cut in 

half. It has dropped more dramatically than any other State. They have cut their caseload 

by 90 and the whole caseload that is left on there is engaged in community service work.

And that is the model that we need to go on. We need to realize that we have 2 million 

mothers still left on TANF. In my estimate, half of those mothers on any day of the week 

are sitting at home and not doing anything. It is a travesty. We shouldn't permit it. 

 Also, in many States, an individual, if you require them to come in and look for 

work, they can say drop dead. I absolutely refuse. I will not come in and look for work 

and they continue to get the bulk of their benefits. That is particularly true in California 

and New York State. They can tell you to your face, drop dead. I refuse to do what you 

want and they continue to get their benefits as an entitlement. Federal money should not 

be spent in that way and we should not allow that to occur. It is harmful to the recipient, 

the taxpayer and the kids. 

Mr. Johnson. Thank you. Thank you, Mr. Chairman. 

Chairman McKeon. Mr. Holt. 

Mr. Holt. Thank you, Mr. Chairman. Just to follow on that last comment, I want to 

emphasize and I think all of my colleagues know this; what we are looking for is not 

anecdotes about some recipient saying drop dead. What we are looking for is good, hard 

evidence. And this is a field where for years ideology has colored the evidence. And one 

thing that is apparent to me after listening to the witnesses, reading their testimony, is that 

we are still a long way from having good data. And it is certainly premature to call 

welfare reform a success. And I would even say it is premature to say that the benefits 

exceed the detriments of welfare reform so far. I have yet to see the evidence that is 

really reliable for that. 

 Let me just ask one point pursuing a line of earlier questioning and comments.

What fraction of the people; and I understand Mr. Potts and others have talked about the 

difficulty of getting data for people who have left welfare; what percentage of the people 

who have left welfare, to the best of the data that we have available, receive minimum 

wage or within, let us say, 20 percent or 10 percent of minimum wage? And that is not 

just for Mr. Potts but anyone who has data. 

Mr. Potts. What we have found is very few actually receive minimum wage. They are 

receiving well in excess. Minimum wage has really not been an issue. There are some 
27

who are leaving to take minimum type jobs. 

Mr. Holt. Well, in excess meaning what? 

Mr. Potts. Six to $7 an hour jobs are the norm for people who are first leaving public 

assistance who are finding within the first year of work they are increasing their income 

by about 25 percent. If they got a job making $6 an hour, within a year they would be 

making $8 an hour. 

Mr. Holt. Dr. Boushey. 

Ms. Boushey. We see that the majority of people who have left welfare, earn about 6 to 

$8 per hour. Most of them aren't necessarily getting these minimum wage jobs. What we 

have also been seeing, people aren't actually moving up the job ladder all that quickly. 

The rate of growth of wages in low-skilled jobs typically is only about 1 to 2 percent a 

year at best. And many of these jobs people actually move up in real terms, real wages, 

which is adjusted for inflation, actually experience wage declines over time because the 

wage gains are not all that great. That is another important consideration. 

Mr. Haskins. I think this is very well known. There have been many Lieber studies. 

There are national studies; I think we know it is approximately $7 an hour. That is the 

average. And there is a range in there. But relatively few earn the minimum wage. I 

don't think there is any disagreement on that point. 

Mr. Holt. And Mr. Rector. 

Mr. Rector. If I could just make a point here and I hope you won't regard it as a 

statistical trick. But as I indicated earlier, one of the biggest effects of this reform, there 

are several million families who would have entered the old AFDC program who didn't 

enter. And when the work standards were designed in this room 6 years ago, that was the 

strongest anticipated effect, non-entry. And not getting on welfare, but staying in the job 

market is a great way of advancing. You don't want people to sidetrack off onto welfare.

So the Lieber studies, which are people that got on welfare and then got off, they are sort 

of like the bottom of the barrel. There is this whole other effect out there of people who 

would have ordinarily gone into TANF and churned on and come in and out, didn't get in 

at all. They are probably our biggest success story and we don't track them. So it is 

important to look at the Lieber studies but it is probably also equally important to look at 

single mothers in general, many of who never got on welfare but would have under the 

old system. 

Mr. Holt. In the few seconds I have remaining, for those who get $7 or whatever, what 

fraction of them receive health benefits and other employee benefits? 

Mr. Potts. Mr. Chairman, members of the Committee, we did a 12-site study 

specifically looking at those types of things. And it was close to half; about 47 percent 

were receiving full benefits, which would include not only health care but also sick leave 

and personal leave. And there was a huge difference between those who got those types 

of benefits and were able to stay off versus those who got jobs and didn't offer those 
28

benefits.

Mr. Holt. Thank you. Thank you, Mr. Chairman. 

Chairman McKeon. Mr. Andrews? 

Mr. Andrews. Thank you, Mr. Chairman. I appreciate the testimony from the panelists 

and I regret not being here personally, but I have read the testimony. When this hearing 

was conceived a while back, the circumstances were quite different than we find 

ourselves this morning. I voted for the welfare reform law in 1996 and I would vote for it 

again if given the opportunity based on what I know. I think that the positives far 

outweigh the negatives. But we are obviously in some acutely different circumstances 

this morning. There is every reason to believe that economic growth has stopped and 

perhaps we will be in a recession, as the economists define that term, perhaps even more 

than the two quarters of negative growth that recession means. This seems to me to bring 

us to a very difficult stress point in the welfare system. The first stress is that economic 

growth has evaporated. There is every reason to believe that unemployment will escalate 

rather rapidly and the job market that was expanding to accommodate those coming off 

the welfare rolls will no longer be there. 

 A second consideration; many of the 5-year limits are being approached by 

individuals as we speak. Casting aside our legitimate debate over what the data tells us 

about what has happened, what does the panel think we ought to do in the near term when 

we are confronted with the likely reality of significant increases in unemployment and 

large numbers of people hitting their 5-year lifetime limit? Mr. Rector, I think you 

wanted to say something. 

Mr. Rector. I am not a big fan of time limits. I am a big fan of work requirements and I 

do believe as a Nation we do not want to be in a situation where any sick mother who 

legitimately can't find work is not going to get aid because she has hit some arbitrary time 

limit. That is a sad thing and we don't need to do that. On the other hand, the 5-year time 

limit is a great symbol. It is what most people perceive welfare reform was about. So I 

do think we need perhaps to be flexible with that 20 percent exemption rate and things 

like that, to make sure that we don't create the stress that is unnecessary. But what I 

would say_. 

Mr. Andrews. If I may just stop you, would you favor tolling the 5-year limit because of 

the crisis we find ourselves in? 

Mr. Rector. No. And we ought to look at this. If we wanted to do this, the 20 percent 

could be set off of a higher base. No one expected the base to get this low. In fact I was 

very involved in this, and I wasn't fully aware that it was a declining base, so I think that 

if we find this as a problem. But let me just if I could put in some optimistic news here. 

What you want to do is what Wisconsin did during the recession of the early 1990s.

Wisconsin had semi-tough work programs that are similar to what most States have 

today. But what Wisconsin did was it allowed people to come on the rolls but it said 

come back on in a recession but when you are here, you are going to have to engage in 

community service, job search. You are not going to come back on the rolls and be idle. 

And what you see from that is that prior to the 1990 recession, the Wisconsin caseload 
29

with its early reform was going on. The recession comes in. The caseload in almost 

every other State goes up 30, 40 percent, 100 percent in some States. Wisconsin, it was 

flat. It was flat through the whole recession. Not that you want to throw anybody off, 

but as long as you say, by gosh, if you can't find a private sector job, we are here to help 

you, but we don't want you to just come back on and be idle. 

Mr. Andrews. I would like from the other panelists their position on tolling or extending 

the 5-year limitation given the national emergency. 

Ms. Boushey. Given the fact that many of the folks that left welfare and became 

employed in the low wage labor market will be unlikely to be able to apply and get on 

unemployment insurance, tolling the 5-year lifetime limit could be incredibly important 

for those families who have no other option because with this lifetime limit there may be 

no other source of short-term income that they can turn to and, alternatively, we would 

need to be thinking about reforming laws so all workers from the labor market are 

eligible for unemployment when they are unemployed. 

 A couple of other things. One is that there are other smaller things we could be 

thinking about, there is a huge need for childcare providers and childcare assistance, an 

unmet need that is part of this whole TANF issue. And one way of perhaps adding to the 

job creation in this time of higher unemployment would be to put more money into 

creating child care facilities which provides jobs for those job care providers and 

provides those services that people moving from welfare to work and low wage people 

more generally need. 

Mr. Andrews. I would just say for the record, and I know my time is up, that I am very 

glad the President and bipartisan leaders of Congress met yesterday to talk about some 

intermediate term economic relief for the country. And things like the extension of cash 

to the airline industry are necessary, and other financial vehicles for our financial services 

sector and health care sectors are necessary. But I want to be sure we do not forget these 

millions of people who have come into the workforce in recent years and those who are 

struggling to get there who are the most likely to lose their jobs as the labor market 

evaporates, and I hope this Committee takes a lead in ensuring that. 

 I yield back. 

Mr. Haskins. Mr. Chairman, could I make a brief point on this? I don't think the 5-year 

limit is going to make much difference. I don't think it will have any impact on this 

problem because very few families are going to hit the 5-year time limit. They have been 

cycling on and off the rolls and there are going to be so few families that will hit that. 

But there will be States that have shorter time limits that may run out of money. The 

average State has only about half of the caseload it had when the amount of money was 

set. So what they need to do to bring those people back on the rolls and I totally agree, 

people that need welfare should be able to get it, they need to bring that money back into 

the system. The biggest problem that could occur is that the States would run out of 

money. And so we have a provision in the legislation called the contingency fund, which 

is very poorly constructed. We did the best we could years ago, but it is ineffective. So 

if you want the answer about what to do about this problem, the answer is the 

contingency fund. Change the trigger. Make sure it is easier for States that need it to get 
30

money out of the contingency fund. And I think that is the most important thing you can 

do.

Chairman McKeon. I think this discussion has been very valuable this morning. It 

seems like in the time I have been in Congress, the way we set up these hearings is we 

pick people who will espouse one position and you pick people who will espouse another 

position and we fight. Maybe it is as a result that has happened last week that has 

changed the whole tenor of what is going on here. I don't know. Or maybe we are all 

interested really in helping these people and what is the best way to do it. 

 Probably the thing that generates the difference of opinion, and I was talking a 

little earlier to Ms. Mink about this, this is a large country and it is a large problem and 

we try to solve a problem here in Washington that affects people in 50 States; I don't 

know how many cities and communities. It is really difficult. And I think politically we 

get put in different positions and different boxes. Whereas if we were; and this is what I 

told Ms. Mink; if each of us were working in a county and sitting at a desk and deciding 

the fate of people as they come in, we probably wouldn't treat people that much 

differently because I think we all have the same goal in life. But it is handling and setting 

the law. We work together; some of you were very much involved in this; we wrote a 

law 5 years ago. Then the regulators take it and they interpret it the way they think it 

should be and they send the regulations out. The States get those regulations and try to 

figure what we had in mind and the best interpretation they can put on it, and then it gets 

down finally to the person who is sitting at that desk that has to deal with all of those 

things in solving this person's problem. And it is a very difficult thing to do. And I think 

we all have good intentions but the way those are interpreted and changed down through 

time has real impact on peoples' lives. And we can sit here and we can pat ourselves on 

the back and say we passed this law and statistically it has done a lot of great things and 

has helped a lot of people, it probably has hurt people, too. And so there is probably no 

simple answer. It is the system we have and I think it is the best system in the world, but 

we just need to understand that there are unintended consequences that affect peoples' 

lives every time we do something. 

 One question I have, we have all talked about poverty. Do we use one number 

across the Nation that fits people? 

Mr. Haskins. The answer is yes. There is a federally computed poverty statistic that is 

done by the Census Bureau and takes into account family size and very little else. 

Chairman McKeon. When you are talking about the poverty line that is what you are 

referring to? 

Mr. Haskins. There are 14 exceptions. The Census Bureau because of the criticisms of 

the poverty measure in about 7 or 8 years ago started computing several alternative 

measures. One of the biggest flaws in the measure was it did not take into account 

having anything to do with taxes, including earned income tax credit. And it didn't 

consider in-kind benefits like food stamps. If you had a mom that left welfare and she 

earned 10,000, for the official poverty number her income is 10,000. But they now 

compute an alternative measure, number 14, in which they consider the EITC and food 

stamps and now that mother has now 16,000. The whole system we created was one that 
31

took income and greatly increased income, everybody agrees, huge increases in income.

And then on top of that income, we created this work support system that gave additional 

benefits. So you couldn't measure the impacts of that new approach unless you took this 

alternative definition. And when you do that, the progress in child poverty in the 1990s 

was more than twice as great as during the 1980s. 

Mr. Rector. The original poverty system was set up in 1963. It set a poverty threshold 

for different families of size. And since that time it has been adjusted. It is one uniform 

thing across the Nation, one standard. One of the problems with that and most of the 

statistics we have used are simply that, that factor that counts only cash income. There 

are other measures that the census also provides which include taxes and earned income 

tax credit and food stamps. In my testimony, in every case I gave both measures so that 

you could look at both of them. And in all cases when you add in the earned income tax 

credit, which is designed to supplement the wages of low income working parents, you 

get a much lower poverty rate and also a more substantial drop in poverty. 

 In particular, we have been arguing about single mothers. No matter how you 

define it, if you look at the Census Bureau numbers, no matter which income standard 

you use, the poverty rate among single mothers has dropped by about 8 percentage points 

during the late 1990s. 

Chairman McKeon. My concern is that we know like in L.A., where I live, it costs 

more to live than it does in parts of Arkansas, I mean, you know, across the country. But 

we are using one number? 

Mr. Haskins. Yes. 

Chairman McKeon. That is a problem. Dr. Schram? 

Mr. Schram. The poverty line is a highly contestable concept and there is a tremendous 

amount of research that has been done on it. People complain about what is counted and 

not counted. People complain about the threshold being too low in terms of what 

families really need to achieve self-sufficiency. There are studies showing selfsufficiency standards would put the levels of need much higher, that you would need 

much more money. In some ways, poverty, welfare, many of these terms are 

anachronisms. The levels of hardship in this country go way beyond these things. And 

measuring whether or not poverty goes up or down, how many people are on welfare or 

not, this is beside the point. 

 The levels of hardship in the country go way beyond that. We need to be looking 

at what is it that people need to be able to thrive in this country. I think the big problem 

here, the difference is that some people are using measures about, as Congresswoman 

Mink said, the general condition of society overall. In that sense, things overall for most 

families improved. But for people who are really poor, things didn't. And I think welfare 

reform, as you said, had some unintended consequences for some families. It created 

increased hardship for them and I think that is what we need to be looking at. 

Chairman McKeon. I have known some people who are fairly well to do that don't have 

enough, in their mind. I mean people look at them and say; they are out of their mind. 
32

They have cars. They have fancy homes. They have way more than they need, but in 

their mind they don't have enough. In some way, Gandhi seemed to be satisfied with 

very little. I don't know how we work that out. But there seems to be a tendency in our 

culture that there is never enough. Somebody always has more. So those who die with 

the most toys wins, that kind of concept. I think what we are really looking at in this 

program is making sure that people have sufficient food and clothing and housing, and 

you know there should be some basic needs met, and I don't think with this welfare 

program, we were trying to penalize people. If somebody went to work, we didn't want 

to say, okay, you go out and work 40 hours a week and now you end up with less, and I 

don't think that was anybody's intent. 

 My time is up and we did have a second round. Ms. Mink? 

Ms. Mink. Thank you very much. I am still troubled by the comparison of the total 

economy and the total society with what we are supposed to be directing our attention to, 

and that is the outcomes to families that were on welfare and the consequences to them as 

a result of the 1996 legislation. It is all well and good to have a statistic that says 

everybody should be getting food stamps, everybody should have paid for childcare, and 

everybody should have paid for health care. But the reality is that a vast majority of the 

people that are driven from welfare dependency into a job do not have those benefits 

made available to them. And what I was trying to pursue with either Drs. Boushey or 

Schram is, is that reality for these welfare families that go to work as a consequence of 

State legislation or State indifference or the failure of the Federal Government to enforce 

a requirement of provision of Medicaid and food stamps and so forth? What is the source 

of this problem, which I am told exists and what can we do about it? 

Mr. Schram. I think it is a very important issue and I think there are a lot of different 

factors involved. I mean to some extent the Federal Government do give States a lot 

more discretion, and that is an issue that needs to be looked at. And there is evidence that 

in some cases States did promulgate administrative guidelines to case workers that they 

called light touch procedures to not necessarily work intensively with clients to ensure 

that they would get all of their entitlements for various reasons that need to be examined. 

And there was a change in the administrative culture of agencies where case workers 

often said it is a new day, everybody has to go to work even if it is a low wage job. You 

are not supposed to get any benefits of any kind. They wanted to instill that. And I think 

a lot of confusion was introduced by that change in the climate of administrative agencies 

at the front lines on the street level. And I think clients were put in a difficult position. 

Ms. Mink. I thought TANF had a specific requirement of a 1-year carryover of 

Medicaid for all recipients that left welfare cash benefits for a job. 

Mr. Schram. And States can extend that.

Ms. Mink. Is there a suggestion that some administrators of the Medicaid program did 

not comply with the law and did not extend it for at least that 1-year period? 
33

Mr. Schram. Well, no. It is not so much that they didn't extend it. I think it is they 

didn't ensure that everybody who could get it would be getting it. They didn't work with 

clients and their caseworkers to be sure they would be working with clients. They didn't 

give sufficient attention to being proactive to ensure that decoupling in this transition 

where people would be leaving welfare but still eligible for these benefits would still be 

able to get them. And a lot of clients were confused. The clients find the system 

extremely erroneous. The system is largely designed to ensure that people don't get 

benefits when they are not entitled. It is not designed to ensure that people can get 

benefits when they are entitled. 

 If you look for years how the Federal Government would determine error rates, 

the error rates were always slanted one way; a State was committing an error in 

determining eligibility if it allowed ineligibles to get assistance. But if they allowed 

eligible people to not get assistance, that wasn't an error. And the system really still 

hasn't shifted to ensuring that people can get their entitlements. And until we at the 

national level make a commitment to that shift, I think that problem is going to persist. 

Mr. Haskins. Could I address two things? For one thing, this is what often happens. 

Someone is on welfare and then they don't come in for appointments. They just leave. 

People don't know. So when it comes for their Medicaid to be renewed or food stamps, 

they are out of touch. That is a big part of this problem. The States have to have ways; if 

you want a system where the State initiates a contact with that person and says your 

Medicaid is about to run out, you got to come in and renew it or call in or whatever the 

procedure is. 

Ms. Mink. I don't see why we could be that generous in our criticism of the system that 

the States were given the responsibility to administer. It is their responsibility to ensure 

that these families have at least Medicaid. And I hear this constantly repeated. Many of 

them don't have medical care. 

Mr. Haskins. That is true. But there are States that have made serious efforts to do 

exactly what you are saying. They make it as easy as possible to apply. Everything 

could be done on the phone. They have taken actions to make people understand they are 

eligible for this Medicaid. They have done everything bilingually and so forth. States 

have been aggressive, and they have much higher Medicaid participation. And in one 

case, in fact three, Ohio, Oklahoma and Florida, it went down and then it came back up 

because they instituted these procedures. 

Ms. Mink. Before my time is up, and I see the red light but I do have this one final 

question that I want to address to all the panelists and they could insert the response in 

the record. And that is, from your analysis, your research, and your statistics that you 

have available, how many people will be out totally of any assistance under TANF 

because the 5-year time limit has expired for them? I have not seen any national 

statistics. I know that in my State, it is 2,000 families that have reached the 5-year limit. 

And that is excluding the 20 percent that the State has already eliminated from this time 

limitation. And what the State did was take a whole island where the unemployment 

figures for Molokai constantly exceed 15 percent and there are no job opportunities and 
34

nobody can force these people to leave the island and look for work elsewhere because 

nobody is able to absorb the transportation, housing and other kinds of liabilities. So the 

State just wrote off that island and that constituted 20 percent. So we have a huge 

number, I believe it is 2,200 and something families at the end of the year who will have 

reached the 5-year limit and we are at a real crisis. And I wanted to know what the 

statistics were if any of you had them for the Nation as a whole. And if you have those 

figures I would appreciate, Mr. Chairman, that the record be left open so they could 

forward their responses. 

 Thank you very much. 

SUBMITTED FOR THE RECORD, RESPOSE BY DR. RON HASKINS, SENIOR 

FELLOW, THE BROOKINGS INSTITUTE, WASHINGTON, DC, TO CHAIRMAN 

HOWARD P. “BUCK” McKEON AND RANKING MEMBER PATSY T. MINK, 

SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS, COMMITTEE ON 

EDUCATON AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, 

WASHINGTON, D.C. – SEE APPENDIX H 

Chairman McKeon. I hope that you will comply with Ms. Mink's request. I think that 

is very important. I would also add as we go through this process, we will be holding 

some other hearings in preparation for the reauthorization of this bill next year. And I 

will hope that you will follow this process and make yourselves available and feel free to 

contact us at any time with things that you want to add, things that you haven't had the 

opportunity to put in the record today and we will see that it gets to the Committee. This 

is, as you can see, going to be very difficult. 

 We also have concern that we have the responsibility for the Workforce 

Investment Act, and that also ties in with this, and my concern is that the adequate 

funding is not there right now, especially as we are moving into a period of 

unemployment. So that is another area that we really have to look at. I want to thank 

each of you witnesses for your valuable time for spending it here with us today. 

 There being no further business, the Subcommittee stands adjourned. 

 [Whereupon, at 11:50 a.m., the Subcommittee was adjourned.] 
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Table of Indexes 

Chairman McKeon, 2, 3, 5, 8, 10, 12, 13, 14, 16, 18, 20, 22, 24, 26, 28, 30, 31, 34 

Mr. Andrews, 28, 29 

Mr. Haskins, 6, 17, 24, 25, 27, 29, 30, 31, 33 

Mr. Holt, 26, 27, 28 

Mr. Isakson, 20, 21, 22 

Mr. Johnson, 24, 25, 26 

Mr. Potts, 10, 20, 21, 24, 26, 27 

Mr. Rector, 8, 23, 25, 27, 28, 31 

Mr. Schram, 15, 19, 31, 32, 33 

Mrs. Mink, 3, 18, 19, 20 

Ms. Boushey, 13, 27, 29 

Ms. McCollum, 22, 23