```

[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

                       HOW OUR WELFARE SYSTEM CAN
                            DISCOURAGE WORK

=======================================================================

                             JOINT HEARING

                               before the

                      COMMITTEE ON WAYS AND MEANS

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                and the

                        COMMITTEE ON AGRICULTURE

                       SUBCOMMITTEE ON OVERSIGHT

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 25, 2015

                               __________

            Committee on Ways and Means Serial No. 114-HR05

            Committee on Agriculture Serial No. 114-3, pt. 2

                               __________

         Printed for the use of the Committee on Ways and Means

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                         U.S. GOVERNMENT PUBLISHING OFFICE 

97-912                         WASHINGTON : 2016 
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                      COMMITTEE ON WAYS AND MEANS

                     PAUL RYAN, Wisconsin, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
DEVIN NUNES, California              JIM McDERMOTT, Washington
PATRICK J. TIBERI, Ohio              JOHN LEWIS, Georgia
DAVID G. REICHERT, Washington        RICHARD E. NEAL, Massachusetts
CHARLES W. BOUSTANY, Jr., Louisiana  XAVIER BECERRA, California
PETER J. ROSKAM, Illinois            LLOYD DOGGETT, Texas
TOM PRICE, Georgia                   MIKE THOMPSON, California
VERN BUCHANAN, Florida               JOHN B. LARSON, Connecticut
ADRIAN SMITH, Nebraska               EARL BLUMENAUER, Oregon
LYNN JENKINS, Kansas                 RON KIND, Wisconsin
ERIK PAULSEN, Minnesota              BILL PASCRELL, Jr., New Jersey
KENNY MARCHANT, Texas                JOSEPH CROWLEY, New York
DIANE BLACK, Tennessee               DANNY DAVIS, Illinois
TOM REED, New York                   LINDA SANCHEZ, California
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
JIM RENACCI, Ohio
PAT MEEHAN, Pennsylvania
KRISTI NOEM, South Dakota
GEORGE HOLDING, North Carolina
JASON SMITH, Missouri
ROBERT DOLD, Illinois

                                 ______

            Joyce Meyer, Staff Director and General Counsel

                  Janice Mays, Minority Chief Counsel

                                 ______

                    Subcommittee on Human Resources

             CHARLES W. BOUSTANY, Jr., Louisiana, Chairman

TODD YOUNG, Indiana                  LLOYD DOGGETT, Texas
KRISTI NOEM, South Dakota            JOHN LEWIS, Georgia
PAT MEEHAN, Pennsylvania             JOSEPH CROWLEY, New York
GEORGE HOLDING, North Carolina       DANNY DAVIS, Illinois
JASON SMITH, Missouri
ROBERT DOLD, Illinois
                        COMMITTEE ON AGRICULTURE

                  K. MICHAEL CONAWAY, Texas, Chairman

RANDY NEUGEBAUER, Texas,             COLLIN C. PETERSON, Minnesota, 
Vice Chairman                        Ranking Minority Member
BOB GOODLATTE, Virginia              DAVID SCOTT, Georgia
FRANK D. LUCAS, Oklahoma             JIM COSTA, California
STEVE KING, Iowa                     TIMOTHY J. WALZ, Minnesota
MIKE ROGERS, Alabama                 MARCIA L. FUDGE, Ohio
GLENN THOMPSON, Pennsylvania         JAMES P. McGOVERN, Massachusetts
BOB GIBBS, Ohio                      SUZAN K. DelBENE, Washington
AUSTIN SCOTT, Georgia                FILEMON VELA, Texas
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHELLE LUJAN GRISHAM, New Mexico
SCOTT DesJARLAIS, Tennessee          ANN M. KUSTER, New Hampshire
CHRISTOPHER P. GIBSON, New York      RICHARD M. NOLAN, Minnesota
VICKY HARTZLER, Missouri             CHERI BUSTOS, Illinois
DAN BENISHEK, Michigan               SEAN PATRICK MALONEY, New York
JEFF DENHAM, California              ANN KIRKPATRICK, Arizona
DOUG LaMALFA, California             PETE AGUILAR, California
RODNEY DAVIS, Illinois               STACEY E. PLASKETT, Virgin Islands
TED S. YOHO, Florida                 ALMA S. ADAMS, North Carolina
JACKIE WALORSKI, Indiana             GWEN GRAHAM, Florida
RICK W. ALLEN, Georgia               BRAD ASHFORD, Nebraska
MIKE BOST, Illinois
DAVID ROUZER, North Carolina
RALPH LEE ABRAHAM, Louisiana
JOHN R. MOOLENAAR, Michigan
DAN NEWHOUSE, Washington
TRENT KELLY, Mississippi

                                 ______

                    Scott C. Graves, Staff Director

                Robert L. Larew, Minority Staff Director

                                 ______

                       Subcommittee on Nutrition

                   JACKIE WALORSKI, Indiana, Chairman

RANDY NEUGEBAUER, Texas,             JAMES P. McGOVERN, Massachusetts, 
GLENN THOMPSON, Pennsylvania         Ranking Minority Member
BOB GIBBS, Ohio                      MARCIA L. FUDGE, Ohio
ERIC A. ``RICK'' CRAWFORD, Arkansas  ALMA S. ADAMS, North Carolina
VICKY HARTZLER, Missouri             MICHELLE LUJAN GRISHAM, New Mexico
DAN BENISHEK, Michigan               PETE AGUILAR, California
RODNEY DAVIS, Illinois               STACEY E. PLASKETT, Virgin Islands
TED S. YOHO, Florida                 BRAD ASHFORD, Nebraska
DAVID ROUZER, North Carolina         SUZAN K. DelBENE, Washington
RALPH LEE ABRAHAM, Louisiana
JOHN R. MOOLENAAR, Michigan

                            C O N T E N T S

                               __________

                                                                   Page

Advisory of June 25, 2015 announcing the hearing.................     2

                               WITNESSES

Olivia Golden, Executive Director, Center for Law and Social 
  Policy, Testimony..............................................    41
Chanel McCorkle, accompanied by Marsha Netus, Director of 
  Operations, America Works, Baltimore, MD, Testimonies..........    79
Casey Mulligan Ph.D., Professor, Department of Economics, 
  University of Chicago, Testimony...............................    13
Erik Randolph, Senior Fellow, Illinois Policy Institute, 
  Testimony......................................................    31
Eugene Steuerle Ph.D., Senior Fellow, Urban Institute, Testimony.    63

                       SUBMISSION FOR THE RECORD

Feeding Texas....................................................   109

 
               HOW OUR WELFARE SYSTEM CAN DISCOURAGE WORK

                              ----------                              

                        THURSDAY, JUNE 25, 2015

             U.S. House of Representatives,
                       Committee on Ways and Means,
                   Subcommittee on Human Resources,
                                  Committee on Agriculture,
                                 Subcommittee on Oversight,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:30 a.m., in 
Room 1100, Longworth House Office Building, the Honorable 
Charles Boustany [Chairman of the Subcommittee] presiding.
    [The advisory of the hearing follows:]

HEARING ADVISORY

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 

    Chairman BOUSTANY. Welcome to today's hearing. I will ask 
our witnesses to take their seats.
    As chairman of the Ways and Means Human Resources 
Subcommittee, I am honored to welcome Chairman Conaway of the 
Agriculture Committee, along with Chairwoman Walorski and our 
colleagues from the Agriculture Nutrition Subcommittee for 
today's joint hearing.
    In the interest of time and so we can move quickly to our 
witness testimony, both sides have agreed to limit members' 
opening statements to 3 minutes apiece.
    Since we are accompanied by Chairman Conaway, we will break 
precedent here, and I will yield time to Chairman Conaway to 
make his opening statement.
    You can go first, since you are set, and we will go to 
Chairman Ryan afterwards.
    Mr. CONAWAY. I want to thank the chairman. I want to thank 
Chairman Ryan and Chairman Boustany and the Ways and Means 
Committee for hosting the first joint hearing between our two 
committees as we explore how our welfare system can discourage 
work. It is surprising that our committees have not engaged 
formally before given the overlap in our recipient populations.
    According to the most recent SNAP characteristics report, 
20 percent of SNAP recipients receive Supplemental Security 
Income, 24 percent receive some form of Social Security income, 
9 percent receive child support enforcement payments, 7 percent 
receive support from TANF, and 4 percent receive unemployment 
income.
    While today's hearing is about work, the level of overlap 
suggests this is only the beginning of our efforts to better 
coordinate programs across the committee jurisdictions. 
Throughout our top-to-bottom review of the past, present, and 
future of SNAP, we have had an eye towards strengthening the 
program so that it doesn't become a trap, but rather a tool to 
help individuals move up the economic ladder.
    We have included a number of former recipients and front-
line, nongovernmental organizations who we now know are 
succeeding despite our welfare system.
    Our hearing series have shown us that SNAP does not operate 
in a vacuum and that it plays an important role in the lives of 
nearly 46 million Americans. This is why the hearings like 
today are important: Recipients don't think in terms of 
program. But while we do, it is our responsibility to look 
beyond our programs to understand the experience of the 
recipients and the potential unintended consequences.
    During our last hearing, we heard from practitioners about 
how they engage individuals to help them succeed in the 
workforce. We quickly encountered the reality of the ``cliff 
effect'' when programs designed to support work do just the 
opposite.
    There is great dignity that comes from being able to 
provide financially for one's own family, but that feeling can 
easily be overrun when our welfare system creates a situation 
where earnings do not necessarily translate into higher income. 
This is not a problem that can be addressed by SNAP alone. It 
is going to take a coordinated effort.
    Thank you again for hosting this important joint hearing. I 
look forward to working with Chairman Ryan, Chairman Boustany, 
and your committee to ensure that our welfare system is 
prepared to address current and future challenges.
    We know that work is the best way to help individuals climb 
the economic ladder, and we must ensure that our policies 
reward that work. I look forward to the hearing, and I yield 
back.
    Chairman BOUSTANY. Thank you, Chairman Conaway.
    Now I am pleased to yield time to Chairman Ryan, chairman 
of the Ways and Means Committee.
    Chairman RYAN. Well, first of all, thank you. Welcome 
everybody. It has been a long time since I have sat down here 
in these seats. The view is a little different, I got to admit.
    I want to welcome our colleagues from the Agriculture 
Committee, including my friend Chairman Conaway and Chairwoman 
Walorski and Ranking Member McGovern. We are happy to have you, 
we are happy to host this, but we want to thank you for letting 
us use your committee room twice when we were renovating this 
room earlier in the year.
    This is an important hearing because for the past 50 years 
we have been waging this war on poverty, and I don't think you 
can really call it anything but a stalemate. I am not saying we 
haven't made any progress. We clearly have. But the Federal 
Government has spent trillions of dollars on dozens of 
programs, and yet upward mobility is no better than where it 
was when we started. Today, if you were raised poor, you are 
just as likely to stay poor as you were 50 years ago.
    Here is the problem. We have created 80 different programs 
to try and fill 80 different holes in people's budgets, health 
care, child care, energy, education, and more. You qualify for 
these programs on income, naturally. If you don't make much, 
you get a lot of benefits, but as you make more, you start to 
lose your benefits very quickly in some cases. Because we have 
piled these programs right on top of each other, the falloff 
can be really steep, and the more you make, you can end up 
losing a ton.
    Take a single mom with one child earning the minimum wage, 
and she gets offered a job paying her $3 more an hour. When you 
factor in the taxes and the benefit cuts that she will 
experience, she will only get to take home 10 cents of every 
extra dollar she makes. What is the point in taking that job?
    So you find that we have been filling holes, but we have 
actually been building a trap, and we are isolating people from 
the rest of the communities, we are isolating people from 
getting out of poverty. Right now we have a safety net that is 
designed to catch people falling into poverty. What we need is 
a safety net to help lift people out of poverty.
    And so the way I see it, we have got three choices. Number 
one, we either accept the status quo and just do nothing. 
Number two, we reinforce the status quo and simply just do more 
of the same. That will only make it harder for people to get 
from welfare to work. Or number three, we reform the status 
quo, we try something different, get people in jobs or in 
training, customize benefits to fit people's needs, make sure 
that it always pays to work. These are the principles that we 
want to put into practice. We need another round of welfare 
reform so that we can actually have a safety net pulling people 
from poverty, from welfare, into work, into a better life.
    You know, Pope Francis recently said: ``Where there is no 
work, there is no dignity.'' That is the challenge we face, to 
protect and to promote the dignity of work. I look forward to 
working with our colleagues in the future to do just that, and 
I think this hearing is a great start.
    Thank you.
    Chairman BOUSTANY. Thank you, Chairman Ryan. I would like 
to amplify that this hearing is a very historic event. Since 
1995, the Human Resources Subcommittee has held joint hearings 
with other committees only twice and never with our colleagues 
on the Agriculture Committee. It is way overdue that we 
approach this subject matter in this way. That is despite the 
wide overlap between the programs we oversee that assist 
millions of Americans with food stamps and other welfare 
benefits.
    So today's hearing is long overdue and reflects the start 
of what I hope will be much closer cooperation ahead between 
our committees. What we will explore today is one of the worst 
side effects of current welfare program rules, the fact that 
getting a job or working more does not always make families 
better off. This poverty trap may be unintended, but for those 
in its grips, it is all too real.
    We need to review how we got here, how real people are 
affected, and how we can reform the system to help people go to 
work and earn more instead of making them worse off when they 
do just that.
    Consider how destructive today's anti-work signals are. We 
have a chart. I will put it up on the screen. This chart shows 
one thing we know for sure is that work, and especially full-
time work, is really the only cure for poverty. Less than 3 
percent of people who work full-time are poor. In contrast, 
people who don't work are 8 to 10 times more likely to be poor.
    So promoting work is the real key to helping people avoid 
poverty. Benefits can and should serve as a temporary bridge 
between jobs or to supplement earnings when someone can find 
only part-time work. But unless we are willing to tolerate more 
poverty--and I am not--those benefits need to reinforce, not 
undermine the importance of work. Redesigning welfare benefits 
to do just that is the challenge before us.
    I look forward to all the testimony and to working with 
Members on both sides of the aisle to find solutions to this 
problem.
    And with that, I am happy to yield to my colleague, Mr. 
Doggett, the ranking member of the subcommittee, for an opening 
statement.
    Mr. DOGGETT. Thank you for the opportunity to consider 
these matters.
    You know, when Lyndon Johnson declared war on poverty, he 
got underway programs that have changed the lives of millions 
of Americans for the better. In 1996, when we approved welfare 
reform, which I supported, we recognized there was a need to 
consider some of those programs and make alterations.
    When I hear talk this morning of another round of welfare 
reform, I want to be sure that the reform that is coming 
achieves more than the 1996 reform, does not simply use Federal 
resources to permit the States to displace their own commitment 
and denies so much assistance to individuals compared to where 
we were in 1996. It needs to be about lifting people up, not 
just reform that is about cutting and numbers.
    There are things that this hearing can focus on that I 
think can be helpful. If you means test programs, benefits 
eventually stop after an individual earns a certain amount of 
money, we can and should mitigate the impact by preventing 
eligibility cliffs. And we have one model for that, though it 
is under constant attack in this room, and that is the 
Affordable Care Act. It did just that for low-income workers by 
allowing them to earn more and still receive Medicaid in those 
States that had the good judgment to accept 100 cents of the 
dollar to finance their Medicaid or to receive private tax 
credits for private insurance.
    But our Republican colleagues have continued to insist that 
these important steps must be repealed, and many governors, 
like my own, have refused to fully implement the promise of the 
Affordable Care Act. We can increase the phaseout range for 
programs so that benefits decline more gradually when a person 
goes to work. We can support programs that now actively promote 
and reward work, like the Earned Income Tax Credit, the Child 
Tax Credit.
    But for some people the solution to every problem--I view 
it as rather blockheaded--it is to block grant everything. 
Rather than pursuing these commonsense approaches of supporting 
work, I hope that this one-size-fits-all answer of block grants 
is not the only one advanced along with cutting Federal 
funding.
    Mr. Chairman, Americans deserve better than a cut-and-run 
strategy. We need concrete proposals for helping Americans 
find, keep, and advance in employment, not a reduction in the 
Federal commitment to reaching this critical goal. I hope our 
witnesses will provide additional insight and recommendations 
for how we achieve that objective.
    And I yield back, and thank you.
    Chairman BOUSTANY. I thank the gentleman for his statement.
    I now yield time to the chairwoman of the Agriculture 
subcommittee, Mrs. Walorski, for the purposes of an opening 
statement.
    Mrs. WALORSKI. Thank you, Chairman Boustany, thank you to 
Chairman Ryan as well, for hosting this historic joint hearing 
between our two committees as we better explore how our welfare 
system can discourage work.
    As the chair of the Nutrition Subcommittee, we have spent 
the past 5 months exploring the Supplemental Nutrition 
Assistance Program, also known as food stamps. Our review of 
the past, present, and future of SNAP is why we are here today. 
We will explore real issues with another committee that is 
having many of the same discussions as we are.
    Throughout our review, I have stressed that we cannot just 
examine SNAP in a vacuum. We have to recognize there are other 
programs that exist and explore how they work or don't work 
together. In my home State of Indiana, my fellow Hoosiers 
aren't concerned about whose jurisdiction of committees this 
is. They care more about how we as legislators work together. 
Today is the next step in that process.
    During our last hearing, witnesses discussed the importance 
of case management and how they engage with recipients. We 
heard stories detailing the barriers they face. For example, 
workers near the poverty line who are eligible for multiple 
assistance programs stand to lose financially by increasing 
their income as their benefits are phased out. This is 
described by analysts as the welfare cliff.
    In the face of such a scenario, many people forego raises 
or put in fewer hours. Individual programs may attempt to 
address this, but it still requires a broader view of how 
programs interact to ensure that we as policymakers are not 
inadvertently discouraging work.
    Welfare programs should support those in need, not deter 
them from reaching their full potential in the workplace. I do 
worry that this cliff is a serious obstacle when recipients try 
to enter, reenter, and remain in the workforce in order to 
climb the economic ladder. Helping recipients move into better 
paying jobs not only benefits their families, but also benefits 
taxpayers.
    I am looking forward to hearing about ways to explore how 
we can improve the operation of these programs in order to help 
millions of Americans seeking a better future.
    Again, I thank Chairman Ryan and Chairman Boustany for 
hosting, and I look forward to working with them in the future. 
I also want to thank all of our witnesses for being here today 
with us and look forward to their testimony.
    Chairman BOUSTANY. I thank the gentlelady.
    I now yield time to the ranking member of the Agriculture 
subcommittee, Mr. McGovern.
    Mr. MCGOVERN. Thank you.
    You know, the hard reality is that we can and we must do a 
better job in fighting hunger and poverty in America. For 7 
years now I have called for a White House conference on food, 
nutrition, and hunger. Holding a White House conference like 
this would be a major step forward in our effort to reduce 
hunger and poverty by better connecting the dots amongst 
Federal and State agencies, nonprofits, faith-based 
communities, schools, hospitals, and the business community. 
Such a conference would help us better understand and meet the 
needs of the millions of Americans struggling to put food on 
the table and to help them transition to a better place.
    Being poor in America is hard work, and quite frankly, our 
safety net has some holes in it, and it must be strengthened to 
meet some of our families' most basic needs. Talk to those who 
run our food banks. They will tell you that at the end of every 
month SNAP families are at their doors because they can't 
afford to purchase any more food.
    And while we all want to encourage work, let's state for 
the record that a majority of those on SNAP are kids, elderly, 
and the disabled. They are not expected to work. Of those who 
are expected to work, more than half do. Among those who work, 
58 percent work full-time for 6 months or more after receiving 
SNAP. Remember that the next time you hear someone claim that 
SNAP recipients don't work. About 60 percent of SNAP recipients 
who are expected to work do work for 6 months or more after 
receiving SNAP benefits.
    The real problem is that those who work earn so little that 
they still are eligible for the program. I believe that if you 
work in this country, you ought not to live in poverty. Where 
is the outrage over lousy wages? And yes, Pope Francis, and I 
agree with him, said: ``Where there is no work, there is no 
dignity.'' But what about the indignity of low wages, of 
working hard two, three jobs, and still living in poverty?
    No doubt this is a complex problem, and I think American 
families deserve more, but that means talking about raising the 
minimum wage to a livable wage so that workers can earn enough 
to support their families, and it means creating a sustainable 
path to phase out safety net benefits only after they are on 
solid footing.
    Some of my friends have suggested we lower the marginal tax 
rates. An easy way to accomplish that is to extend phaseout 
ranges for programs in addition to SNAP, which I am sure some 
of my friends might not be crazy about because it will cost 
more. But without that critical investment, any changes in SNAP 
could hurt the program and actually make poverty worse.
    I am all for flexibility too, but if flexibility is code 
for block grants, I have got a big problem with that. Too often 
this results in anti-hunger programs like SNAP being 
underfunded and our most vulnerable families being left behind.
    Passing the buck to States, finding more ways to avoid 
adequate Federal investments in battling poverty solves 
nothing. Cutting SNAP as we did last year in the farm bill, 
cutting funding for job training, not permanently extending key 
features of the EITC or Child Tax Credit, these are dangerous 
policies that have often been presented by some of my 
colleagues as solutions.
    These ideas make me nervous about what the majority is up 
to, and everyone at today's hearing should think carefully 
about the consequences of such reckless approaches to the very 
programs that are essential to helping America's most 
vulnerable families get on the path to the middle class.
    And I thank the chairman.
    Chairman BOUSTANY. I thank the gentleman for his opening 
statement. Without objection, each member will have the 
opportunity to submit a written statement and have it included 
in the record at this point.
    Now we will turn to our panel of witnesses. I want to 
remind our witnesses to limit their oral statements to 5 
minutes. However, without objection, all of the written 
testimony will be made part of the permanent record.
    This morning we will hear from Dr. Casey Mulligan, 
professor, Department of Economics, University of Chicago.
    Next--and we are going to accommodate our next witness' 
schedule when she arrives, she has had a little transportation 
issue--we will have Chanel McCorkle of Baltimore, Maryland, 
accompanied by Marsha Netus, director of operations at America 
Works of Baltimore.
    Thirdly, Erik Randolph, senior fellow, Illinois Policy 
Institute. Fourth, Olivia Golden, executive director, Center 
for Law and Social Policy. And fifth, Dr. Eugene Steuerle, 
senior fellow, Urban Institute.
    We welcome all of you. Your testimony is going to be very 
helpful as we carve a path forward on this.
    And so with that, Mr. Mulligan, please proceed with your 
testimony.

 STATEMENT OF CASEY MULLIGAN, PH.D., PROFESSOR, DEPARTMENT OF 
         ECONOMICS, UNIVERSITY OF CHICAGO, CHICAGO, IL

    Mr. MULLIGAN. Chairman Boustany, Chairman Walorski, Ranking 
Member Doggett, and Ranking Member McGovern, and all the 
Members of the Subcommittee, thank you for really the 
opportunity and the honor today to discuss with you about how 
public policy has affected the reward to working.
    A basic economic principle is that the monetary reward to 
working has important effects on how many people are employed 
and how much they work. People without jobs or otherwise with 
low incomes sometimes receive benefits from social safety net 
programs. The benefits themselves are rarely called taxes by 
laymen, but economists understand the benefits to have many of 
the characteristics of tax rates because a program beneficiary 
loses some or all of her benefits as a consequence of accepting 
a job.
    I have illustrated the reward idea in figure 1 of my 
testimony. The left bar in that figure measures the resources 
available when working, and the right bar measures the 
resources the same person would have if not working, including 
subsidies net of taxes paid. The difference between the two 
bars is the monetary reward to working.
    Now, consider adding a new safety net program, which I put 
in green, or expanding an old one. Exactly because it gives 
more help when not working, the new program reduces the reward 
to working. The combined effect of taxes and subsidies on the 
reward to accepting a job can be summarized as a penalty, the 
effective amount that is lost from paying taxes and replacing 
benefits associated with not working. I like to express that 
penalty as a marginal tax rate, namely as a percentage of 
employee compensation.
    If there were no penalty, then the marginal tax rate would 
be zero. Thanks to a labyrinth of tax and subsidy programs, the 
marginal tax rate can equal or exceed 100 percent, which means 
that at least as many resources are available when not working 
as when working.
    Government tax and spending rules reduce the reward to 
working for two separate reasons. First, the rules include 
income contingencies. The more income from work means more 
taxes and fewer benefits. But second and separate and not 
unimportant is the rules include employment contingencies. More 
employment for a family affects its taxes and benefit amounts 
even if their income is the same.
    For unmarried middle-class Americans, SNAP is not a 
marginal tax on their income, despite the 30 percent benefit-
reduction rate, because they are ineligible for the program 
whenever they are working. But SNAP is a marginal tax on their 
employment because every month out of work is another month of 
SNAP eligibility. This is one of the many examples where a 
program's employment contingencies have different economics 
from its income contingencies.
    Legislation that cuts or credits taxes, so to speak, can 
nonetheless reduce the reward to working and increase the 
marginal tax rate if it cuts taxes more for those who work than 
it cuts taxes for those who work less.
    At the same time the safety net programs implicitly tax job 
acceptance, they also implicitly subsidize layoffs because the 
programs absorb some of the income and production that employer 
and employee together lose when an employee stops working. 
Layoff subsidies give employers and employees less incentive to 
take the steps that might avoid or delay layoffs.
    Let me be clear, America absolutely must have taxes and 
safety net programs even though they reduce the reward to 
working and even though they subsidize layoffs. But if you want 
to understand what is happening in the labor market or to the 
budgets of social programs, it is counterproductive to 
approximate marginal tax rates as zero or to assume that they 
are eternally constant regardless of what comes in new 
legislation.
    The resources provided for people not employed or 
underemployed have increased in the past decade. SNAP program 
rules have changed in a variety of ways. Unemployment benefits 
are now paid in a variety of new circumstances. The Recovery 
Act and now the Affordable Care Act help unemployed people pay 
for their health insurance.
    Figure 2 shows my estimates of 9 years marginal tax rates 
coming from tax and subsidy programs, taking into account that 
some of the poor and unemployed do not participate in all or 
sometimes none of the safety net programs. The combined effect 
of these and other changes through this year was to reduce the 
reward to work, that is, increase marginal tax rates for most 
of the nonelderly population.
    The cumulative effect of all this legislation is to 
increase average marginal labor income tax rates by 7 
percentage points over what they were in 2007. A presumably 
unintended consequence of the recent safety net expansions has 
been to reduce the reward to working and thereby keeping 
unemployment and poverty rates high, keeping national spending 
low, longer than they would have been if safety net program 
rules had remained unchanged.
    Thank you.
    Chairman BOUSTANY. I thank the gentleman.
    [The prepared statement of Mr. Mulligan follows:]
   
   
   
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
   
    
    

                                 

    We will defer on Ms. McCorkle and Ms. Netus' testimony 
until she arrives. So next we go to Mr. Randolph.
    Mr. Randolph, you are recognized for 5 minutes.

  STATEMENT OF ERIK RANDOLPH, SENIOR FELLOW, ILLINOIS POLICY 
                     INSTITUTE, CHICAGO, IL

    Mr. RANDOLPH. I want to sincerely thank the chairwoman, the 
chairman, and all the Members of the Subcommittees for inviting 
me to be here today and allowing me to speak.
    You have before you a very challenging issue. This is 
difficult and complex, and I am pleased that you have the 
courage to undertake it. It is solvable. Let me say it is 
solvable, and you can succeed, and I think you will succeed, 
and this Nation will be better because of your efforts.
    My name is Eric Randolph, and I am a senior fellow with the 
Illinois Policy Institute, and I also provide analytical 
services as an independent consultant. Last year, the institute 
sponsored me to develop a computational model examining welfare 
benefits, Federal, State, local, and to determine the impact of 
economic incentives relative to employment. The results of the 
study are nothing short of astounding. In some cases, it 
literally does not pay to climb up that career or opportunity 
ladder.
    Now, just imagine that you are a single parent with two 
children living in Lake County. It is a suburb of Chicago. You 
have a job earning $12 an hour. Someone offers you a job for 
$18 an hour. Should you take the job? Well, under the scenario 
that we studied, the answer is no, keep your $12 per hour job.
    At first glance, this makes no sense. Of course someone 
would prefer to make $18 as opposed to $12. But as a single 
parent managing a household with children you want to maximize 
all your resources. You have children to take care of, yourself 
to take care of, and it doesn't matter if those resources are 
earned through work or if it is given to you through benefits.
    A single parent in Lake County earning $12 an hour brings 
home just over $22,000 a year. However, that same single parent 
is eligible for an array of welfare benefits that we can 
categorize, the refundable tax credits, the food assistance, 
housing assistance, subsidized childcare services, and medical 
assistance. When you add up the value of all the benefits that 
they can receive from these programs, it comes to an astounding 
$40,000. Now, that makes the total receivables, when we include 
the earned income, almost $62,000.
    Now, in comparison, suppose this mother would take the job 
earning $18 an hour, okay? She would lose almost $34,000 in the 
benefits to gain only $11,000. Now, why would anyone take a job 
to gain $11,000 but lose $34,000 in benefits?
    This is the welfare cliff that we are talking about, and 
this is what traps people. This is just but one scenario we 
studied using the computational model. We studied two other 
counties in Illinois, and we studied two-parent households, and 
guess what, it is essentially the same.
    So the system that we--well, let me just say, we drew a 
number of conclusions looking at this. The very first one is 
the magnitude of the potential benefits of the family that they 
receive is large. It is a general conclusion. $40,000 is not a 
small sum of money. The second is that the welfare cliff can be 
significant, and it is cruel. The third is economic 
disincentives are real, major, and they can indeed trap 
families. The fourth is the system is inequitable, and that is, 
to compare someone who is not receiving these benefits, could 
be worse off financially than someone receiving these benefits. 
That is not equitable. Fifth, programs with the steepest 
cutoffs are the greatest culprits.
    Finally, everyone should agree that there ought to be an 
income ladder such that when someone earns more money, he or 
she is in fact better off. However, this is not the system we 
have as a Nation today. It will take the cooperation of many 
individuals and political courage.
    In my opinion, we will not be successful by giving more 
control to the Federal Government. We can only succeed if we 
take advantage of the laboratories of democracy, allowing 
States to innovate and finding the best solutions.
    Chairman BOUSTANY. I thank the gentleman.
    [The prepared statement of Mr. Randolph follows:]
   
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    Ms. Golden, you are recognized for your oral testimony.

STATEMENT OF OLIVIA GOLDEN, EXECUTIVE DIRECTOR, CENTER FOR LAW 
               AND SOCIAL POLICY, WASHINGTON, DC

    Ms. GOLDEN. Good morning, Chairman Boustany, Chairman 
Walorski, Ranking Member Doggett, Ranking Member McGovern, and 
Members of the Committees. Thank you so much for the 
opportunity to testify. I am Olivia Golden, the executive 
director of the Center for Law and Social Policy, an anti-
poverty organization that promotes effective Federal and State 
policies.
    In addition, I bring to this testimony experience in 
directly administering safety net programs at the Federal, 
State, and local levels, as well as studying them as a 
researcher at the Urban Institute. I will briefly summarize 
three main points from my written testimony.
    First, researchers have demonstrated that the Nation's core 
safety net programs, programs like the Earned Income Tax 
Credit, SNAP, childcare assistance, health insurance, sharply 
reduce poverty. They cut it almost in half. They improve 
nutrition and health care for millions of children and 
families. And--and this is really important emerging research--
they have positive effects on children's health, work 
trajectory, and income many years later into adulthood. Just to 
take one example, SNAP benefits alone kept more than 10 million 
people, including almost 5 million children, out of poverty in 
2012.
    Second key point. The research evidence indicates 
overwhelmingly that the safety net as a whole supports work, 
particularly for low-income parents. It is not too much support 
from the safety net but too little, such as the absence of 
enough help with child care, that typically holds people back 
from working.
    While some individuals encounter barriers to work related 
to safety net programs, researchers find that these effects are 
much smaller than the programs' work-promoting effects, and 
many past barriers have been fixed in recent years. I think Mr. 
Doggett alluded to the Medicaid improvements. In fact, the 
majority of people who get help from core safety net programs 
today are working but earning too little to make ends meet 
without help.
    To take a moment to summarize the research, theories about 
work disincentives are just not supported by what researchers 
find about low-income families' actual experiences. Rigorous 
studies find that when low-income working parents can get and 
keep the full package of work support programs, they are better 
able to stabilize their lives, keep a job, move up, and help 
their children thrive.
    For example, studies of parents leaving welfare for work 
have concluded that families accessing these supports were more 
likely to be stably employed. Studies of the Earned Income Tax 
Credit show large effects in increasing labor force 
participation. And empirical studies of the effects of the 
safety net taken as a whole confirm that, in practice, these 
programs' work disincentives are so small as to have, quote, 
``almost no effect on their anti-poverty effectiveness.''
    In fact, one of the major success stories of the past two 
decades is that the safety net has made work pay as a result of 
specific decisions by Congress and the States to improve work 
incentives. One striking piece of evidence: Poor and near poor 
mothers who are eligible for the widest range of safety net 
benefits have become far more likely to work than they used to 
be. By contrast, employment has declined among childless 
adults, the group with least access to the safety net.
    Finally, my testimony highlights practical next steps. I 
urge the Members of the Committees to consider six next steps 
that build on past success.
    First, extend the improvements to the Earned Income Tax 
Credit and Child Tax Credit that now expire at the end of the 
2017.
    Second, expand the EITC to childless workers, including 
young adults, who now don't benefit from this work incentive.
    Third, expand funding for childcare assistance whose 
importance was recognized by a recent bipartisan 
reauthorization in the Congress.
    Fourth, fully fund implementation of another program 
reauthorized in a bipartisan manner, the Nation's workforce 
program, so low-income workers can move into family-supporting 
employment.
    Fifth, explore two-generational strategies that help 
parents move up at work and enhance children's life chances at 
the same time.
    And sixth, avoid counterproductive ideas such as block 
grants that would turn back the demonstrated successes of the 
safety net.
    In conclusion, as a result of policy improvements over the 
last two decades, the major national safety net programs 
combine a strong impact on poverty with positive work 
incentives for low-income families. I urge you to consider 
building on this momentum with additional practical steps such 
as those I have highlighted here.
    Thank you very much, and I look forward to your questions.
    Chairman BOUSTANY. Thank you, Ms. Golden.
    [The prepared statement of Ms. Golden follows:]
  
  
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    Next we will go to Dr. Steuerle.
    You are recognized, Dr. Steuerle.

   STATEMENT OF EUGENE STEUERLE, PH.D., SENIOR FELLOW, URBAN 
                   INSTITUTE, WASHINGTON, DC

    Dr. STEUERLE. Thank you, Chairpersons Boustany and 
Walorski, Ranking Member Doggett and McGovern, Chairman 
Conaway, and Chairman Ryan, if he returns. I thank you for this 
opportunity to testify before you again. My name is Gene 
Steuerle, and I have worked with you on many tax, budget, and 
welfare issues over time, and again, it is an honor to be here 
again. My remarks reflect my own views and not those of the 
institutions with which I am associated.
    Despite the rhetoric about living in an age of austerity, 
we live in a time of extraordinary opportunity. On a per-
household basis, our income is higher ever than even before the 
Great Recession, and 60 percent higher, by the way, than when 
Ronald Reagan was elected President.
    The best options, in my view, for the future of a social 
welfare budget cannot possibly be determined well by the needs 
and parameters established decades ago in a very different 
economy and driving the programs we are talking about today. 
Two examples enlighten us as to how bipartisan efforts actually 
led to important forward-looking shifts from past policies.
    Republicans and Democrats did not always agree on the 
merits of either AFDC or the Earned Income Tax Credit, yet they 
did favor a shift from welfare toward wage subsidies. Ditto for 
moving from public housing to housing vouchers. To me, these 
give evidence that there are bipartisan ways of getting around 
the type of problem we are talking about today.
    I also sense that both the American public and you, their 
elected representatives, are united in wanting to create a 21st 
century social welfare budget. That budget, I believe, should 
and will place greater focus on opportunity, mobility, work, 
and investment in human, real, and financial capital. However, 
for the most part, we have never really had a social welfare 
budget that is focused on mobility and work.
    As I show in ``Dead Men Ruling,'' you hold office at a time 
unique in our Nation's history, a time when the politically 
unattractive option of reneging on promises the public feels it 
has been made has been turned into a requirement. Economic 
growth, even if modest, always provided new opportunities. It 
is just that you now operate within a budget where too many 
choices have already been preempted by dead and retired elected 
officials who continue to rule.
    For instance, projections by the Congressional Budget 
Office and others imply that government is scheduled to spend 
in excess of $1 trillion more annually in about 10 years. And 
by the way, those numbers come about whether you are dealing 
often with a Republican or a Democratic budget because they are 
derived from economic growth. Yet all of that money, plus some, 
has already been absorbed by other commitments that have been 
made, and the traditional source of flexibility in the budget 
has been removed.
    Now, one important component of the reform that is 
necessary, if we could reallocate those future resources, 
increased resources, would be the combined marginal tax rates 
imposed mainly on lower-income households and their potential 
negative effects on work, wealth accumulation, and marriage.
    To see how many programs combine to reduce the reward to 
work and marriage, I invite you to look at the first figures in 
my testimony. There I show that for households with children, 
combined marginal tax rates from direct taxes and universally 
available programs, like the Earned Income Credit, SNAP, and 
health insurance, average about 66 percent when moving from 
about $15,000 of income to about $55,000 of income, typically 
when moving toward full-time work, taking a second job in the 
household, and particularly facing the very large penalties if 
you happen to marry another worker.
    Those beneficiaries of additional housing and welfare were 
not even included in this first figure. You add those in, and 
the rates get up above 75 percent on average.
    Now add in items like transportation, consumption, and 
childcare costs--childcare costs are dealt with quite clearly 
by the testimony by Ms. McCorkle--and the gains from work fall 
even more. Sometimes there are no gains at all.
    So while there is widespread disagreement on the size of 
these disincentive effects on work and marriage, there is 
little doubt that they do exist. One way out of this bind, as I 
keep trying to emphasize, would be to focus future increased 
resources more towards an opportunity budget that emphasizes 
early childhood, quality teachers, work subsidies in lieu of 
more subsidies just for consumption, decent neighborhood 
environments, and similar items.
    Combined tax rates could also be made more explicit, and 
work could be made a stronger requirement when they receive 
some benefits. And by the way, cutting healthcare cost plays a 
big role here too.
    I will be glad to discuss these options further with you as 
the hearing proceeds. Thank you.
    Chairman BOUSTANY. Thank you, Dr. Steuerle.
    [The prepared statement of Dr. Steuerle follows:]
    
    
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    And we now welcome Ms. McCorkle. We are glad you were able 
to make it. I know transportation can often be treacherous 
around here. But anyway, we certainly welcome you, and you may 
proceed with your testimony.

  STATEMENT OF CHANEL MCCORKLE, BALTIMORE, MD, ACCOMPANIED BY 
     MARSHA NETUS, DIRECTOR OF OPERATIONS, AMERICAN WORKS, 
                         BALTIMORE, MD

    Ms. MCCORKLE. Hello. How is everyone today? Thank you for 
allowing me the opportunity to testify before you today. My 
name is Chanel McCorkle, and I am grateful to share my story.
    I moved to Baltimore in April 2011 with my daughter and her 
father. We were new to Baltimore and had no place to go. I 
moved in with my two sisters and was told about the City Homes 
program. I was told it was an organization that would help me 
find affordable housing for my family and me.
    The same day I applied, I was rejected. According to City 
Homes, I had not worked in the State for at least 18 months and 
therefore was ineligible for assistance. Forced to remain with 
my sisters, my next step was to go to the Department of Social 
Services for additional support. Fortunately, I was granted 
food stamps and medical assistance.
    I found a job at Rite Aid Pharmacy as a cashier making $9 
an hour. When I let the Department of Social Service know of 
this job and my earnings, they dramatically lowered my food 
stamps. The $200 reduction made it difficult to make ends meet.
    One year later, I found a better opportunity as a grill 
chef at St. Joseph's Hospital. The full-time position required 
me to find and maintain stable and reliable daycare for my 3-
year-old daughter. I again went to the Department of Social 
Service for help. I applied for daycare vouchers and was turned 
down. I was informed that $11 per hour was too high of an 
income to receive vouchers. I was forced to rely on friends, 
family, and neighbors to babysit while I worked.
    I found myself bouncing my daughter around from place to 
place, from person to person, in order to keep my job. After a 
while, the holes in my daycare situation became more and more 
apparent as friends and family were not able to commit full-
time due to their own work obligations. I struggled with my 
attendance every day, and over the course of 2 years, I was 
calling out weekly due because I had no sitter for my child and 
I could not afford to pay a childcare center.
    In 2012, I became pregnant with my son, and after he was 
born, I needed additional help with childcare. I added him to 
my social service case and still was not eligible for daycare 
vouchers. I was eventually let go from St. Joseph's Hospital 
for missing too many days of work.
    After I lost my job, I applied for temporary cash 
assistance through the Department of Social Services. Thirty 
days after I applied, I was granted cash assistance and 
immediately received daycare vouchers and an increase in food 
stamp assistance. The daycare vouchers I so desperately needed 
while I was working were finally granted to me after it cost me 
my job.
    I was also placed with America Works of Maryland, Inc. 
America Works taught me how to dress professionally, answer 
interview questions, format a resume, and seek current and 
worthwhile job opportunities. I feel like I had to lose my job 
in order for social service to really help me.
    I have recently accepted a job working 40 hours per week 
with excellent benefits. I am really excited to return to work. 
I know that after the Department of Social Service gets 
notified, I will lose some, if not all of my benefits, and that 
is scary. I am sure they will take my daycare vouchers from me 
or make the copayment too high, my food stamps will be 
decreased or nonexistent, and my medical benefits may end.
    I have tried to make provisions if those things should 
happen. I have just started to get back on track, and I know I 
am well on my way, no matter how much of an uphill battle it 
may be. I am fighting to get back to work to support my family 
and become independent once again.
    Thank you for allowing me this opportunity. I look forward 
to any questions.
    Chairman BOUSTANY. Thank you, Ms. McCorkle, for sharing 
your story with us.
    For the members, we have three votes. There are about 9\1/
2\ minutes left. We are going to continue for a while longer, 
and then we will recess for votes when we get down a little 
further on the clock.
    With that, Ms. Netus, you may proceed with your testimony.
    Ms. NETUS. Chairman Boustany, Chairman Walorski, thank you 
for the opportunity to speak before the committee today. I 
would also like to thank the House Ways and Means Committee 
Chairman Paul Ryan and the rest of the distinguished committee 
members. My name is Marsha Netus. I am the vice president and 
general manager of America Works of Maryland, Inc. It is my 
pleasure to testify before you today.
    America Works was founded in 1984 and was the first for-
profit company dedicated to helping individuals become self-
sufficient through employment and retention services. Founder 
Peter Cove and president and CEO Dr. Lee Bowes made it their 
life mission to improve workforce development programming by 
connecting socially deemed hard-to-serve job seekers with 
private sector employment.
    In 1997, the Maryland office located in downtown Baltimore 
was opened with the goal to help long-time welfare recipients 
find unsubsidized employment. Since then, the Maryland office 
has expanded its services to assist even harder-to-serve 
populations, such as violent ex-offenders who have been 
incarcerated for at least 1 year, long-time SSI or SSDI 
beneficiaries, disabled veterans, and youth aging out of foster 
care.
    Collectively, we have placed over 10,000 people into stable 
employment. Our networks of employers rely on us to connect 
them with qualified individuals eager to work. I have been part 
of this branch since its inception, witnessing the 
implementation of the Personal Responsibility and Work 
Opportunity Act through the transition to the Deficit Reduction 
Act of 2005.
    Through my observation, regardless of the population 
served, Chanel's testimony demonstrates a true reality for 
those facing upward mobility. Fear is linked to the reality of 
the clients we serve. Even when finding clients to testify 
before you today on their realities of life, fear surfaced 
among them that retribution could occur, making an already 
difficult situation worse, like sanctions for choosing to be 
selective with employment.
    Individuals will turn down a job for fear their other 
support services could be interrupted. Here you have Chanel, a 
single mother raising two young children, highly motivated to 
work, but apprehensive of taking full-time employment because 
although she will earn a livable wage, her daycare copay and 
the loss of food stamps could keep her in the same 
socioeconomic status as before employment.
    When I met Chanel, she was elated to share she was hired at 
the new Amazon distribution center in Baltimore, a 40-hour-a-
week job with excellent benefits, but gravely concerned that 
this opportunity could result in a repeat of the past. She had 
great jobs before, decent wages, good benefits, and chances to 
create a career path for her family, but lost them because 
although it sounds like a good situation, the reality is she 
still needed transitional assistance.
    Although she is excited about this new opportunity, she is 
feeling a bit leery about her outcome. Will this really be the 
chance to get off the system? Although our retention team will 
provide her with the guidance and supports needed to succeed, 
certain supplements are simply out of our control. Clients have 
declined good jobs for fear it could affect their extended 
supports, such as housing, child care, medical assistance, and 
food stamps.
    As wages increase, the likelihood of the client 
contributing more equally increases. Our experience has found 
that there are others that will just take the opportunity, 
eager and determined to provide more for their families, only 
to result in being terminated because the reality is they are 
still relying on public assistance like daycare vouchers.
    Without a true support system, they cannot make it work. 
Sadly, once their earnings exceed a federally defined hardship 
amount, they no longer qualify for assistance, and in all 
likelihood it may be eliminated altogether.
    This could be the case for Chanel. Despair enters their 
world, and my staff and I aggressively work to instill hope 
back into their lives. This is even more challenging for those 
who have gone through specialized training programs.
    Chairman BOUSTANY. Ms. Netus, because of the vote schedule, 
can I get you to wrap up on your oral testimony? We have your 
full written testimony for the record.
    Ms. NETUS. Sure.
    [The prepared statement of Ms. McCorkle and Ms. Netus 
follows:]

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    Chairman BOUSTANY. Thank you.
    Ms. NETUS. Often at a financial cost to themselves, never 
resulting in employment, yet alone earnings initially marketed 
to them.
    America Works has developed several programs where skills 
development is in direct correlation with private sector needs, 
providing the individual with not only the theory aspect of the 
job, but the realistic experience of understanding.
    I petition the committee to truly evaluate the transitional 
process and support systems for helping low-income working 
families leave the welfare system. Unfortunately, the priority 
is aimed at ensuring full participation of work activity, as 
defined by the law, to not accrue penalties instead of a system 
designed to guarantee stable employment.
    Through our experiences, we know people want to work. With 
proper matching, there is a job for everyone, but we need an 
unmitigated system to ensure longevity of employment, which 
will result in reduction of the welfare rolls.
    Thank you for the opportunity to testify before you today.
    Chairman BOUSTANY. Thank you, Ms. Netus.
    I will inform members that we have just over a minute left 
on the vote if members do want to break out to vote. There are 
three votes. And when we do recess for the vote, we will come 
promptly back and resume the hearing.
    So with that, I will begin questioning of our witnesses. We 
will go through a round of questions.
    These programs, we have a myriad of welfare programs that 
have been created over a course of years. They were 
individually designed to help families in need. But the 
collective effect of this, as we have heard in testimony, can 
discourage people from working and make them actually 
financially worse off because of cliffs and the things that we 
have heard about.
    Ms. McCorkle, your story is very compelling and very 
helpful to us, to give us a real-life example of what happens, 
because our goal is to help individuals like yourself who are 
trying to do the right thing, working hard day in and day out 
to do the right thing, taking a job, trying to get ahead, 
trying to improve, but we want to make sure that these programs 
work appropriately and don't penalize you when you try to do 
the right thing.
    So in your opinion, how are we doing, based on your 
experience?
    Ms. MCCORKLE. Based on my experience, I feel like you are 
doing okay. I just feel like you should allow more time, don't 
just snatch the benefits away from the client because they 
found a job. Give like a couple of months to get yourself 
together. If you didn't save money, give you time to save your 
money, give you time to just get yourself established, and then 
decide if you are making enough money, you can handle it, then 
go ahead and take it out. Don't take it all the way away, just 
knock it down a little bit until they are established enough to 
actually get off the system.
    Chairman BOUSTANY. So as you were looking to go back to 
work, were you afraid that you might end up worse off? Did you 
encounter fear or were you concerned? And then once you went 
back to work, did you feel like, ``Well, this is not working 
out for me, I am worse off''? Is that the case?
    Ms. MCCORKLE. When I wasn't working, I felt like everything 
was okay. I went back to work, I felt like I was worried 
because of the hours I was working. You couldn't find a daycare 
open for those hours, and then you couldn't pay the cost, and 
then you had to find people. But then if the people didn't work 
out for you, I had to call out, so I was worried.
    So I am not working now, but I do start my new job 
tomorrow. I will be back. I am excited. At the same time I am 
worried about losing the vouchers or having the copay too high. 
You just start getting paid, so how are you going to pay your 
copay, and then you have to pay somebody to watch your kids. So 
it is actually like a worry. And then they are going to cut 
your food stamps, so who is to say you made enough to put 
enough food in your house for your kids?
    Chairman BOUSTANY. Did you feel like you were in a trap?
    Ms. MCCORKLE. It kind of does, yes.
    Chairman BOUSTANY. Okay.
    Ms. MCCORKLE. It does.
    Chairman BOUSTANY. Thank you. Your story is very strong. It 
is a very helpful story to us because it is a real-life example 
of what we are trying to deal with as we coordinate these 
programs.
    Individually the intentions have been good over time to 
create a good safety net, but the problem is, the way these 
programs have interacted, I think they are not fair to 
individuals like yourself. And so the whole purpose of this in 
coordinating with the other committee is to try to figure out 
how we can better make these programs work for those that they 
are intended to help.
    Dr. Steuerle, this problem, I assume you would answer yes, 
that this problem calls for a national answer. This is a 
national problem. It is Federal policy interacting with State 
policy. But we need certainly guidance from Congress as we 
clean this up.
    Dr. STEUERLE. I think that is correct, Chairman Boustany. 
And part of the issue, as you say, this issue has arisen over 
the years and the decades, and the question is whether there is 
any quick fix.
    Part of what I am trying to lay out in my testimony is, is 
if we think ahead 15, 20 years when resources in the economy 
are going to be greater, we can, I think--I think we have an 
established base to provide people minimum levels of 
consumption. I think we can start moving on this particular 
problem.
    So, for instance, primary education, we don't think of it, 
creating marriage penalties and work disincentives. There are a 
lot of things we do. Visiting nursing programs that a number of 
people are engaged in.
    The other issue, which nobody wants to address a lot, is a 
lot of this has arisen jurisdictionally when spending used to 
be determined by the expenditure committees and taxes were 
basically paying for public goods. Now that we have about 
$35,000 on average per household in transfers coming from the 
government, now the tax-writing committees do transfers, the 
spending committees do taxes.
    And so I think there is a jurisdictional issue too that you 
are trying to address by having this joint committee of how you 
can make joint decisions about these issues, and I don't think 
that is resolved at all.
    Chairman BOUSTANY. Right. Yeah. Well, I think we are just 
getting started on that, and hopefully we will be able to clear 
up a lot of this. But then the other issue is how do you 
empower those closest to those in need, working with the States 
and people at the State level to coordinate those efforts? 
Because we have to do work up here, but we also have work at 
the State level since these are combined programs.
    Dr. STEUERLE. So I have a lot of options in my testimony, 
but one of them is to think about giving at the State level, 
there is this debate about whether you actually give grants to 
the States, but you could give State workers more flexibility 
to, say, combine some of the programs, provide the same level 
of benefits, say, to somebody who is getting these benefits, 
but merge them in a different way. Maybe they need 
transportation, maybe they are willing to sacrifice something 
to do education. To create a little more of those types of 
options I think----
    Chairman BOUSTANY. More of a customized casework approach 
perhaps, with the flexibility built in.
    Ms. GOLDEN. Can I comment?
    Dr. STEUERLE. In conjunction with the client.
    Chairman BOUSTANY. Yeah, Ms. Golden, quickly, because I 
have to run to vote here.
    Ms. GOLDEN. I am just going to comment on Ms. McCorkle's 
situation and your courage.
    First of all, you should be a reassured. Given the numbers 
in Maryland, you should end up with your income almost 
doubling, and that is because of one thing that is Federal, 
just to highlight the committee's jurisdiction, the Earned 
Income Tax Credit and the Child Tax Credit.
    But second, I want to highlight your concern about child 
care, which again goes to that Federal-State relationship, is 
an enormous issue for mothers across the country, and the 
challenge there, I think, is not flexibility but money. The 
State of Maryland does enable people who leave welfare to stay 
on child care, but you couldn't get on before when you were 
working because they have a waiting list, and that is because, 
flexibility or not, they just need those resources and they 
can't stretch them far enough. So I think that is a piece of 
the Federal-State dynamic.
    Chairman BOUSTANY. Thank you.
    I am going to have to recess the hearing now. We have 
votes. We have three votes. We will resume immediately upon 
concluding the last vote. So with that, the committee stands 
recessed.
    [Recess.]
    Chairman BOUSTANY. The subcommittee will now resume 
proceedings. And given that I have concluded my questioning of 
the witnesses, I will now turn to Mrs. Walorski for 
questioning.
    Mrs. WALORSKI. Thank you, Chairman Boustany. And, again, 
thank you to the panel for being here.
    Ms. McCorkle, I didn't get a chance to say hi when you came 
here, and we just came back from votes. But thank you so much 
for being here and testifying, Ms. Netus as well accompanying 
her. We have all the experts here. We have seen the graphs, so 
we have studied this. But you are the one that has actually 
lived through the process. So when we talk about, we have been 
talking about this cliff, this welfare cliff. And so my 
question to you is do you think the welfare cliff is real, and 
if so, can you just talk about the challenges of this whole 
process of reentering the workforce.
    Ms. MCCORKLE. Yes, I believe the cliff is real. It is what 
I am experiencing. The process of going through work is it is 
really easy to find the job. It is really easy to get the job. 
It is just really hard to keep the job if you don't have the 
support you need to help with child care and child care is 
being a big issue, then it is kind of hard to keep your job.
    Mrs. WALORSKI. And so, Ms. Netus, if you could also kind of 
fill in here, and with what your organization does, and kind of 
like tie in this network and web together. So is Ms. McCorkle 
an exception to the rule? Do you see this pretty much as a--
they have a new phenomena of this cliff?
    Ms. NETUS. Chanel is actually--she is common. Most of the 
people coming through the door that have moved on into 
permanent employment, as I stated earlier, are very fearful 
because, not only Chanel, her greatest fear is child care. I 
have a number of participants whose fear is housing. The moment 
they start working, their housing expenses start to rise. We 
also have a number of individuals that deal with just food 
stamps. As Chanel mentioned as well, too, that once they start 
working, the month after, their food stamps are more than 
likely adjusted.
    Mrs. WALORSKI. Yes. I need to pause you there.
    Ms. NETUS. So it is common.
    Mrs. WALORSKI. Mr. Steuerle, I just have a really quick 
follow-up on something you said as well when you talked 
governors and changing mind sets, things like that. What can 
local and State governments do? What kind of role can they play 
in this whole mobility issue?
    Dr. STEUERLE. I don't know what they can do directly. I do 
sense, as I responded to Chairman Boustany, I think we can give 
them more options to think about combining or merging programs 
or giving--say, a recipient is eligible for a given level of 
benefits, to take that level of benefits and split it some 
other ways maybe for transportation, education, or something. 
Maybe they are willing to accept a little bit less food stamps. 
The complication is a lot of cases, they don't have the 
jurisdiction. There is a huge jurisdictional splits. It is also 
an issue that my colleagues have dealt with a lot. There is not 
one-stop shopping for the client as well. So there is all sorts 
of coordination. One thing you might try to provide incentives 
as far as just figure out ways to get these data sets together 
so we can actually figure out what is going on state local 
levels.
    Mrs. WALORSKI. I appreciate it. My time is up. Mr. 
Chairman, I yield back my time. Thank you.
    Chairman BOUSTANY. Now I yield to the ranking member of the 
subcommittee, Mr. Doggett.
    Mr. DOGGETT. Thank you. And thanks to each of you for your 
important testimony. I am pleased to note that as you have been 
testifying, Chief Justice Roberts writing for six members of 
the United States Supreme Court has upheld the health care 
security of many of the people that we are talking about right 
now. As he wrote, quote, ``Congress passed the Affordable Care 
Act to improve health insurance markets, not to destroy them.'' 
And he rejected the rejectionist argument that he said would, 
quote, ``likely create the very death spirals that Congress 
designed the Act to avoid.''
    So I hope that as we address the issues that you are 
raising in your important testimony, that we will learn from 
the Affordable Care Act; we will cease the 60-plus attempts to 
repeal it, and get about the business of how we improve and 
strengthen it. And as it relates to this whole question of 
cliffs, how we can learn from the important legislative changes 
that were made in the Affordable Care Act.
    Let me ask you, Ms. Golden, I appreciate your answer to the 
last question, to talk a little more about what I refer to as 
the block-headed approach of giving States like Texas that are 
rejectionist States, that have rejected the Affordable Care 
Act, despite the 800,000 Texans that are benefiting already 
from these marketplaces and the many more who could benefit 
from the expansion of Medicare, what the likely effect is of 
providing Texas and other such States a block grant, and how 
block granting programs like SNAP are giving the States the 
option of pushing multiple programs into one block grant 
program? What will that likely actually do for the working 
poor, for the people that are out there struggling with two or 
three jobs but don't really have a living wage?
    Ms. GOLDEN. So I think we know----
    Mr. DOGGETT. Would you turn your----
    Ms. GOLDEN. We know a lot about the disadvantages of block 
grants, that they risk turning back the successes of the safety 
net and making the work issues worse. You note the State choice 
around Medicaid. Ms. McCorkle doesn't have to worry about her 
health insurance because Maryland made the right choice on 
Medicaid expansion. In Texas, she would have to worry about it.
    So a couple of things about block grants. One is that they, 
in every case I can think of in the poverty and human services 
area, they go down over time. TANF is down by 40 percent. Child 
care, my written testimony says, we are serving, you know, the 
fewest people we have for a dozen years. And not only do they 
go down over time, they don't respond to economic trouble.
    So during the recession when family need was greatest for 
those struggling low-income working people, SNAP and Medicaid 
responded to that need, kept people access to health insurance 
and food, TANF as a block grant did not.
    As you know, they raised the big problem of State--of 
differences by State. So that the benefits for children that I 
talked about, depend on where a child is born. And the forth 
thing, which I think is a very big issue, they don't solve the 
problem that has been identified today. If the State of 
Maryland, which we were just hearing about, is not able to 
provide sufficient child care benefits, to make sure that 
people are able to keep that for, you know, for the long--a 
long time, or to get it when they are in low-wage work, that is 
not about flexibility. It is not that that family needs child 
care instead of healthcare coverage for their kids, it is about 
dollars.
    And the Congress has come to a bipartisan reauthorization 
of child care legislation. There is money proposed by the 
authorizing committee for that. There is a proposal by the 
President in his budget for expanding dollars. Child care is 
very flexible. States get to make lots of choices about how to 
spend it, but flexibility doesn't compensate for not having the 
resources to meet the needs that you have got.
    Mr. DOGGETT. Thank you, so much. I yield back, Mr. 
Chairman.
    Chairman BOUSTANY. Now I go to Mr. McGovern.
    Mr. MCGOVERN. Well, thank you. And I appreciate your answer 
to Mr. Doggett's question, because I think--you know, I think 
we want to be clear here, that when people are talking about 
block granting programs, they are not talking about expanding 
the resources that States have to be able to do more. And, you 
know, earlier, I think Ms. Netus was talking about Ms. 
McCorkle's issue with day care. But that was--that was a 
problem with the day care block grant in Maryland. And my 
colleague from Illinois, Mr. Davis, when he comes back, might 
be able to respond with some information about how Illinois is 
doing a better job with their day care block grant. But it 
points out, I think, how States have to make tough choices when 
it comes to block grants that are--you know, that don't mean 
that we are expanding resources.
    On the issue of the cliff, I understand, because I bumped 
into people, you know, who have told me their stories. But the 
challenge is, the problem they talk about is that the benefits 
earn--end too soon. They would like them to continue. I think 
that is something--I think we should have that discussion. But 
let's be honest, that is going to require additional resources, 
which I think--I don't know where the mind set of the current 
leadership in this Congress is, but it is probably not in that 
direction.
    But, Ms. Golden, I mentioned in my opening statement that I 
think if you work in this country, you ought not to have to 
live in poverty. And it infuriates me that, you know--that 
there are too many workers in this country who earn such 
abysmally low wages that we tolerate here, in some cases even 
encourage by some of our policies here, but these people still 
qualify for a lot of these benefits, including SNAP.
    The American taxpayer is subsidizing low-wage work in this 
country. Can you talk about how raising the minimum wage to a 
livable wage might actually help people transition off of SNAP? 
Because a livable wage is what we want here. It is not just 
going to get people into the workforce. We are doing that, and 
people are still so poor. How do we--how could that help here?
    Ms. GOLDEN. So, I am glad you raised that, because one of 
the things I highlight in my testimony is that the problem for 
low-wage workers is a lot about the labor market. The public 
safety net programs are doing a lot of what they need to do 
very successfully, but when you look at, say, kids in poverty, 
70 percent of them are living with someone who work, a third of 
are living with someone who works full-time full year. So the 
issues are wages that are too low and hours that are 
insufficient, and jobs that are transient and impermanent.
    So addressing the problem of wages essentially offers the 
opportunity for someone to raise kids and work in a family-
sustaining setting. And I want to note that I think it also 
probably makes it easier for them to above up beyond that. 
Because we do a lot of work at CLASP also on workforce 
training, post-secondary education. And if you are trying to 
balance work, school, and raising kids, having enough income 
from the work piece so that you can do the whole thing is 
virtually impossible at the minimum wage. So I think that that 
is a very important piece.
    Mr. RANDOLPH. May I interject, Mr. Chairman, and answer 
that same question?
    Chairman BOUSTANY. Quickly.
    Mr. RANDOLPH. When we modelled the welfare cliff in 
Illinois, actually increasing the minimum wage would not help 
the family that we looked at. Because if you actually take a 
look at the charts that are provided in the data, that if a 
person moves from the minimum wage up to $12 per hour, that it 
is relatively flat. There is not much advantage at all. If you 
raise it beyond that, you push them off the cliff so that they 
are actually harmed.
    Mr. MCGOVERN. By the way, I am talking about a livable 
wage.
    Chairman BOUSTANY. The gentleman's time has expired.
    Mr. Young, you are recognized.
    Mr. YOUNG. Thank you, chairman. You know, I have long been 
intrigued by what has become a very popular formulation. I 
think J.F.K. first said it, or at least it first caught fire 
when he said, a rising tide lifts all boats. And I think that 
generally is the case. We need to do those macroeconomic 
things, like reform our Tax Code, reduce the number of 
burdensome regulations, and so forth so that that tide can 
rise. But I think it is clear now, when you look at the data, 
when you visit with enough people, that there are some boats 
that require patching.
    And I see a unique role, not necessarily for the Federal 
Government, in many cases for State governments to tailor 
programs to unique needs of, say, the State of Indiana where I 
hail from as opposed to Massachusetts or California. I also see 
a real role for what still, to this day, is the most vibrant 
civil society in human history. Mr. Randolph, perhaps you could 
speak to some of those interventions we have seen at the State 
level, the local level, our churches, our not-for-profits, what 
role do they have ensuring that people get back to work and 
enter sort of the path to upward mobility?
    Mr. RANDOLPH. Yes, thank you.
    I think you are right. If we really want to solve the 
problem and really help people, you want to involve these 
nonprofit organizations. A number of them are faith-based, and 
they can be extremely helpful. There are a number of them 
around the country, that they call pathways, I think what, 
pathways out of poverty. And they actually provide coaching and 
a number of things to help individuals come out.
    Did I understand your question correctly? Did I answer the 
question?
    Mr. YOUNG. You did indeed.
    Mr. RANDOLPH. Okay.
    Mr. YOUNG. The purpose of this program--this hearing, 
rather, is to investigate some of the distortions that are 
created by our government programs, the disincentives created 
for someone going back to work. So I was particularly struck by 
your example. I think the calculations you made work, someone 
from Lake County Indiana, a single parent, working at $12 an 
hour, which amounts to $22,000 a year, would rationally say, 
no, I am not going to take this $18-an-hour job offer, which 
amounts to $40,000 a year because, you know, it is--I would end 
up losing money in the whole course of this sort of 
calculation. And this is--this is an abomination and something 
we need to solve here.
    Mr. RANDOLPH. You are correct again. I mean, just think of 
it from the point of view of that single parent. I mean, they 
have children to take care of, and their decision is going to 
be in the best interest of their family and their children. So 
if we put them in a position where they have to turn down a 
higher paying job, then that is wrong. And it happened. I mean, 
it happened in Maryland, but it happens in other places. It 
happens in Illinois; it happens in Pennsylvania. I actually 
helped managed a focus group in Pennsylvania that looked at 
some of these issues, and we heard a number of different 
stories that said basically the same thing.
    Mr. YOUNG. So two tracks here: Patching the boats and 
removing the disincentives created by the Federal Government, 
and I think we will be in a better spot. I yield back.
    Chairman BOUSTANY. I thank the gentleman.
    Next we will go to Ms. Fudge.
    Ms. FUDGE. Thank you very much, Mr. Chairman. I appreciate 
it.
    I am not even sure where I want to begin today. But let me 
just say this about the historic nature of this hearing today. 
The only thing that is historic is we have spent about 6 or 7 
various hearings on SNAP. We have spent almost that many on 
child nutrition just as if there is nothing else going on in 
the world or in this Congress. That is what is historic, that 
we have spent so much time feeding one issue today.
    I sit and I listen to people talk about how people 
calculate whether they are going to take a job making $18 an 
hour from one making 11 because they are going to lose it. The 
average person has no clue what the value of their benefits 
are. They don't sit and make that kind of a calculation. And 
there is nothing that you can say to give me any data that they 
do, other than what you said to them.
    There is nothing. There is no proof anywhere that being on 
public assistance discourages work. There is no proof of it. It 
is just something that people want to talk about. Absolutely no 
proof. Maybe what we should be discussing is ways to lift 
people out of poverty by raising the minimum wage, extending 
paid sick and family leave for all workers so that their 
parents don't have to risk losing their jobs to take care of a 
sick child or a parent, and we need to be talking about 
enhancing and permanently extending tax credits for working 
families.
    But maybe what we should talk about is corporate welfare. 
What is their disincentive? They get more money from the 
Federal Government than all the poor people that you are 
talking about. Why don't we talk about corporate welfare? These 
are people who work every day? They are not lazy, but they get 
corporate welfare. Even in the Tax Code they call it an 
entitlement. But we never talk about them. We only talk about 
poor people. And at some point you just have say to yourself, 
what is the point? What is it that we are trying to do? We are 
talking about SNAP incentive farm bill. We passed the farm 
bill. It was a 5-year farm bill. Why are we talking about it? 
It is done. I don't understand we are wasting this kind of 
time.
    Ms. Golden, could you tell me why you think you are here 
today really?
    Ms. GOLDEN. I think that--so, first of all, may I just 
support your point that these facts don't make sense to you, 
because I think we have looked at some of the calculations in 
Mr. Randolph's report, and the housing calculation. In fact, it 
doesn't work that way. People don't get pushed off when their 
income hits. They stay on. They just can't come in new at that 
level. So I think one of the lessons is many theoretical 
calculations, in fact, aren't true the way the program happen 
on the ground.
    In terms of the reasons for this hearing, I will tell you 
my hope. I won't tell you what I would worry about. My hope is 
that we are here to talk about the extraordinary successes of 
the safety net, Like the fact that we have sharply reduced 
poverty; we have insured that the safety net supports work for 
the vast majority of low-income people, and that we are getting 
evidence about how it supports children's life-long 
effectiveness, and then maybe we will talk about some of the 
practical next steps that you have highlighted that the 
committees could take, like extending the earned income tax 
credit further, like increasing investment in child care. So 
those would be my hopes for what would come out of it.
    Ms. FUDGE. Thank you, Mr. Chairman. I yield back.
    Chairman BOUSTANY. I thank the gentlelady.
    Next we will go to Mr. Davis. You are recognized.
    Mr. RODNEY DAVIS OF ILLINOIS. Thank you, Mr. Chairman, and 
thank you for letting us, poor Ag Committee members come into 
such a nice spacious committee room. We know how good you have 
it here on Ways and Means now.
    Chairman BOUSTANY. You only have 3 minutes. Get to your 
questions.
    Mr. RODNEY DAVIS OF ILLINOIS. I am not yielding back. 
Actually, I just want to welcome my friend, Mr. Randolph, from 
the great State of Illinois. It was nice, my colleague, Mr. 
McGovern, was interesting in some of the policies that are 
being implemented in Illinois, and I can't wait to have that 
discussion with him in a future hearing.
    I appreciate your work and your discussion on the cliff 
that you are talking about. As somebody who is a supporter of 
SNAP programs, I want to make sure that those who need benefits 
get them and that those who are on those benefits have the 
ability to transition into that workplace and not have to make 
a decision between getting benefits or getting a higher wage.
    You have talked about the cliff, now I want to hear some of 
your suggestions that we might be able to take into 
consideration in this institution on how to make it better. 
What can we do to fix it? So I would ask you that. What can we 
do to fix some of the problems that you have identified?
    Mr. RANDOLPH. Thank you. I mean, we have got to keep in 
mind that what is important is that we are talking about these 
single moms, we are talking about the families that want to 
help their lives. So we shouldn't--we shouldn't get jealous of 
jurisdiction or Federal control over the States. So I think the 
important thing is to rise above that and then realize that if 
we are going to really solve the problem, we have to allow 
flexibility at the State level for them to address.
    And just this past Monday, I was at--did you want to say 
something?
    Mr. RODNEY DAVIS OF ILLINOIS. No. Go ahead.
    Mr. RANDOLPH. Just this past Monday I was at a group where 
there were 20 different secretaries for human services across 
this country, and they all were telling me the same thing, and 
that is that if they were given more flexibility, there is more 
things that they can do to manage these programs better.
    Mr. RODNEY DAVIS OF ILLINOIS. What are a couple of examples 
that you can give as to how they are managing those programs 
better? What can we do in a State like Illinois to do exactly 
what you are talking about?
    Mr. RANDOLPH. Right. What I would like to see is I would 
like to see that, like, for example, in the SNAP program, that 
there is flexibility that the funds could be fungible with 
other welfare programs so that when you are at a State level, 
you look at the person, and you say, okay. You have these 
various needs. Right now we can't move any of the SNAP money 
over to child care. We can't move the child care money over 
here. If you would blend the programs together, similar to the 
document put together for the opportunities grants, that would 
be a great way to allow States to have flexibility to better 
serve the needs of the individuals and the families.
    Mr. RODNEY DAVIS OF ILLINOIS. Great. My time has expired. I 
will yield back my one second. But I look forward to working 
with you, Mr. Randolph.
    Chairman BOUSTANY. I thank the gentleman.
    Next we will go to Mr. Ashford.
    Mr. ASHFORD. Thank you. And I am not sure who to direct 
this question to exactly, but maybe to Ms. Golden. Back in 
Nebraska, I served as an executive director of the Omaha 
Housing Authority, and one of the--for 3 years. And one of the 
real tragedies of that appearance was that halfway through my 
tenure there, the self-sufficiency program at the Housing 
Authority--at HUD was defunded.
    So essentially, what the rule was, is look at, you are a 
housing agency, you are not an employment agency. You are not a 
workforce agency. And actually, in Nebraska, we passed welfare 
reform. It was my bill. It was 1994, one of the early welfare 
reform bills prior to 1996. And in that bill, we--and as a 
result of it, we have reduced, as has been the case generally, 
reduced welfare rules. I thought Chairman Ryan was absolutely 
correct when he said, I don't know how we structure all of 
these things, but when we look at--the numbers we are seeing 
today are the same numbers--not the same numbers, but the same 
kinds of percentages to a certain degree that I have been 
seeing since 1986, as long as I have been in public life.
    And it is frustrating because it seems to me that the issue 
and the 80 programs are out there, and there are still a lot of 
people in poverty. And, clearly, and I will shut up here, 
clearly, running the Housing Authority, I learned the cliff is 
dramatic. It is absolutely dramatic. And there are so many 
young families that stayed in the Housing Authority 
generationally also, not because they didn't want to work or be 
part of the workforce, but because they could not get out.
    And so I am on the side of anything that will enhance 
workforce. I also notice in CNBC this morning, they listed the 
States that were the most viable economic States in the 
country, and one of the States that had moved up dramatically 
to number 1, actually, was Minnesota, because of the indicia 
being workforce investment.
    So I guess my question is, no matter how we structure TANF 
or how we structure food stamps, if we don't figure out a way--
the first job is not a job that will make it for these 
families. So we have got to enhance incomes as fast as 
possible, and that can only come from job training, and I 
don't--could you respond to that?
    This is the most frustrating issue in my whole professional 
life I have ever been involved in, because it is not working 
the way it should be right now.
    Ms. GOLDEN. So let me highlight the job. You have raised a 
lot of issues. Let me start with the job-training one, which I 
think is really important. So one of the things Congress did in 
a bipartisan way in 2014 was pass the reauthorization of the 
Nation's workforce program, but not put additional dollars into 
it. And so that is another point where there are many positive 
things in that law. For example, one of the past challenges of 
that law was that it didn't really focus on, above all, on the 
low-income, low-skilled people you are talking about. And the 
Congress changed the incentives in order to make it more.
    So I actually think that focusing a lot on that and the 
Nutrition Subcommittee, of course, and the reauthorization of 
the farm bill, the TANF training pilots, that is another 
opportunity to really get that right. And I am--I am sorry. You 
were going to say something?
    Mr. ASHFORD. No. I am not. I am just--I am leaning forward. 
I am sorry.
    Ms. GOLDEN. The other thing that I--I guess, two things I 
want to say looking forward. One is I do think the workforce 
legislation and the opportunities there are crucial. Second, I 
think that--you know, I have spent a lot of my career at the 
State and local level and worked a lot with States, and I think 
there are big opportunities for States to seize these moments, 
but SNAP E&T is an example, they have lots of flexibility; they 
don't draw it down. So they need to see the importance of doing 
that.
    On the cliffs, I would just note that I think there has 
been important progress. You described since 1986, and an 
example is that back then there was essentially no child care 
resources. But what has happened is that families are working 
more than ever in struggling low-waged jobs, and so adding the 
capacity to address the cliffs I think is needed to solve it, 
too.
    Chairman BOUSTANY. The gentleman's time has expired.
    We will next go to Mr. Dold. You are recognized.
    Mr. DOLD. Thank you, Mr. Chairman.
    I want to thank our witnesses for taking the time to come 
and testify before us today. And I want to thank the chairman 
for holding this joint hearing, because the topic that we are 
talking about is very important. We have 80 or so different 
programs that are out there right now are welfare programs. We 
want to make sure that these dollars are actually stretching 
the furthest that they possibly can. And ultimately, our goal 
is that we want to make sure that people who are on welfare, 
that they are able to get up and out of welfare and stand on 
their own two feet, raise their families, and carry out the 
lives as they choose.
    Coming from the great State of Illinois, Mr. Randolph, we 
certainly appreciate your work at the Illinois Policy 
Institute. I wanted to follow up on some of the things that you 
had talked about before.
    The study that you had mentioned before was done in Lake 
County, Illinois. That happens to be an area that I represent. 
I think the study that you did was talking about a single 
mother with two children and the differential between making 
$12 an hour and the benefits that that family would receive 
versus what I think most people would think would be a natural 
evolution to say, okay, I am doing well. I would like to get 
that raise and get a raise, and $18 an hour. And ultimately, 
that would be economically a detriment to that family.
    Can you kind of talk--in your experience, you know, is that 
a common thing that we are seeing that cliff?
    Mr. RANDOLPH. I think it is common. This is something that 
people face. I mean, we have a panelist here who has a similar 
situation that she encountered. You know, we see it--you know, 
we study three counties in Illinois, and it was true for all 
three of those counties. So my answer would be, I believe it is 
common. It is a real issue, and I am very happy that you are 
holding this hearing to try to solve it.
    Mr. DOLD. Well, and that is one of the things that I hope 
we can get. And obviously, we have got a very short period of 
time, but we would like to get some solutions. This isn't just 
an opportunity for us to talk. Hopefully we are highlighting a 
scenario that is out there that is a problem that we need to 
fix, and we need your help to come up with some solutions. 
Because we don't want to discourage that individual from 
getting the raise, from trying to pull themselves out of 
poverty to try to better their family.
    Ms. Netus, let me just ask you, from your experience 
working first hand with individuals, do you think that the 
people are generally aware of the phase out rates for the 
programs that they receive and are disincentivized to work for 
advancement?
    Ms. NETUS. I think they are very familiar with it. I mean, 
amongst just talking to each other, they can hear what is going 
on out there. Often they are finding out these situations a 
little too late. By the time they take the job, they now get a 
letter in the mail that says, your benefits are going to 
expire.
    So, yeah, I think they are familiar with it. And I think 
that once one person goes through it, they tend to share it 
with the others. And so Chanel is a perfect example of someone 
who has gone through it, and she is going to talk to her peers. 
And true enough, you know, they will be able to make decisions 
based on that.
    Mr. DOLD. Well, I certainly appreciate that. And what I 
will hope, and I do hope, is that we can figure out a way to 
make sure that our safety net, that our welfare programs, don't 
disincentivize people from trying to get themselves out. That 
needs to be all of our goal because we want that social safety 
net, but when we have created it in such a way where there is 
disincentive to advance, I think we all lose.
    My time has expired, Mr. Chairman.
    Chairman BOUSTANY. The gentleman's time has expired.
    Next, we will go to Ms. DelBene from Washington State.
    Ms. DELBENE. Thank you, Mr. Chair. And thanks to all of you 
for being with us today and taking the time.
    This Congress, the Agriculture Committee has been 
conducting what has been billed as a top-to-bottom review of 
programs like SNAP. And the title of today's hearing, How 
Welfare Benefits Can Discourage Work, makes me think that not 
enough of us has been listening. SNAP doesn't discourage work. 
If anything, we have learned that the benefits aren't adequate 
enough.
    Ms. Golden, your testimony talks about available workforce 
development funding and SNAP employment and training that is 
only used by a handful of States. In fact, my home State of 
Washington is one of the leaders in the E&T programs. I 
introduced a bill last Congress that was the basis for $200 
million in new SNAP E&T pilot programs in the farm bill, and I 
am definitely proud that these pilots are based, in part, on 
criteria from Washington State's program that has helped 
participants achieve self-sufficiency.
    As you know, these programs differ widely in participation 
and success across the States, but even at the height of the 
recession, 60 percent of those enrolled in Washington's E&T 
programs found employment, and in one study, less than half 
remained on government assistance 2 years after starting the 
program.
    So I was wondering, Ms. Golden, can you further explain how 
E&T programs promote, not discourage work when jobs are 
available?
    Ms. GOLDEN. Sure. I think I would highlight a couple of 
things you said and then build on them. You have highlighted 
the way SNAP encourages, not discourages work. And it is a fact 
in stabilizing people's lives so they can work and move up. And 
second, the role of employment training programs. There is a 
big barrier for the low-income person trying to make that jump 
is typically going to be about getting the promotion, having 
the skills, in doing bipartisan workforce reauthorization that 
the Congress did, the Congress, both parties, said really, a 
post-secondary credential is likely to be crucial for moving 
up.
    So that puts employment and training front and center. And 
Washington State, as you say, is a leader. What the farm bill 
includes, in addition to the unlimited matching funds that 
exist for employment and training in SNAP, as I said, many 
States are not seriously drawing down, it adds pilots, 10 
pilots, which ought to create lessons about doing this really, 
really well. And one of the things that we are excited about is 
that there has been a lot of innovation in the employment and 
training arena, community colleges, workforce programs, but it 
isn't necessarily known to SNAP agencies. And so building that 
connection, using those pilots to people can make that leap I 
think is a very excited next step.
    Ms. DELBENE. And in the end, we should be focused on 
results we are seeing. In our State we have seen strong results 
strong results from these programs, and hopefully the pilot 
will give us innovative new ideas that different States are 
trying that continue to inform everyone in the program going 
forward.
    Ms. GOLDEN. Absolutely. And the issue for States is not the 
flexibility to do those things. They have that. It is having 
the ideas and making them work.
    Ms. DELBENE. Thank you.
    I yield back, Mr. Chair.
    Chairman BOUSTANY. The gentlelady's time has expired.
    Mr. Meehan.
    Mr. MEEHAN. Thank you, Mr. Chairman. And I want to thank 
all of the panelists for your presence here.
    Mr. Randolph, I thank you for your testimony and your 
submitted testimony as well. I know one of the things that you 
introduced was a chart that described activity in my own home 
State of Pennsylvania, in which you had done some work. And 
curiously, you were able to identify a circumstance in which a 
single mother who was making--was better off earning an income 
of--gross income of $29,000 with $57,000 net income and 
benefits than to be earning $69,000 with a net income and 
benefits of $57,000.
    Could you elaborate what you meant by that in the chart?
    Mr. RANDOLPH. Certainly. Now, that chart that you are 
referring to was an earlier version of the same computational 
model. The one in Illinois is actually more sophisticated, and 
that was when I worked at Pennsylvania's Department of, Public 
Welfare when that was developed. And what was discovered with 
that model was that it is the same cliff effect. It is 
essentially, the same thing that it turned out in Illinois, 
that someone can earn up to a certain point, that they earn 
some sort of salary, but once they would earn more or have the 
potential to earn more, they lose benefits. So it is the same 
track. It is the same cliff effect. It is in Pennsylvania, and 
it is in Illinois.
    Mr. MEEHAN. Well, I thank you for describing, you know, the 
cliff issue, which is one of the things we are looking at 
about. How those affected by changing circumstances, and 
particularly a lot of times, I think some of the times you were 
looking, the issue of a recession. You know, we have economies 
that aren't flat; they are cyclical. And during the period of 
time when I was in Pennsylvania looking at this particular 
issue, we actually saw an expansion of the activities 
supporting, in my own Montgomery County, 118 percent increase 
in the total number of persons receiving SNAP, 173 percent 
increase in children receiving SNAP.
    But these were children, and this was during a period of 
time in which, notwithstanding the fact that some of them may 
have been put back into jobs, the nature of the--you know, the 
nature of the job was that the wages were such that they 
weren't sufficiently escaping poverty to the point that they 
were able to also escape the need for the assistance for the 
food.
    Can you give me some insights about how a recession affects 
things?
    Mr. RANDOLPH. Well, yes. I mean, we have a safety net for 
situations. And certainly, during times of recession, economic 
recessions, more people are going to need it. Much of what my 
model was looking at, however, is the ladder that people have 
to climb, the opportunity ladder or the career ladder, if you 
will. And what has happened is, there are a whole bunch of 
rungs kicked out. So they climb up maybe a third way up the 
ladder, and now they can't reach the next step.
    And that is what we are--that is my understanding we are 
trying to solve. That is what the modeling that we have done 
has shown. It has shown that the way the current system is 
designed--and it is a hodgepodge, if you will. It has been 
designed, you know, haphazardly. You know, no one person is at 
fault. You know, you have a bunch of programs, and you kind of 
layer one on top of the other, and the aggregate effect is that 
you have got rungs kicked out of the ladder and people get 
stuck on the third way up.
    Mr. MEEHAN. Thank you. My time has expired.
    Mr. Chairman, I yield back.
    Chairman BOUSTANY. I thank the gentleman. We will next go 
to Ms. Adams.
    Ms. ADAMS. Thank you, Mr. Chairman.
    And thank you all for your testimony today.
    You know, I have talked about this issue for a long time, 
where some poverty is pretty high in North Carolina. People are 
working hard every day, two and three jobs. Working hard is not 
enough if you don't make enough.
    You know, according to Feeding America, the 12th District 
of North Carolina, which is the district I represent, ranks 9th 
in the Nation for food insecurity with a rate percent of over 
26 percent. And I have serious concerns about efforts to block 
grants, SNAP program, and I am pleased that North Carolina is 
participating in the work support strategy initiatives to make 
applying for SNAP and other safety net programs more efficient, 
both for families that want to work and for State government.
    Ms. Golden, can you elaborate on how the work supportive 
strategies initiatives helps families get back to work in North 
Carolina, and how it benefits families applying for SNAP while 
also saving the government money?
    Ms. GOLDEN. Sure. I am glad you highlighted that because 
work support strategies initiative, which is a foundation-
funded initiative that we are leading at CLASP with two other 
national partners, we are working with six States trying to do 
exactly what you say, deliver Medicaid SNAP, and child care 
subsidies using the flexibility that is already there, not 
anything that would need new laws to work well for working 
families.
    As you mentioned, North Carolina, the others are Republican 
and Democratic governor States, Colorado, Idaho, Illinois, 
North Carolina, South Carolina, Rhode Island. And what I would 
highlight is that one of the big things that the States have 
been doing is getting rid of barriers that are not in policy. 
They are certainly not in Federal policy, sometimes they are in 
State policy, that were keeping working families out. Like if 
you have to, in North Carolina, if you used to have to stand in 
two separate lines for a whole day to be able to take care of 
your health care and your nutrition needs, then if you were 
working a low-wage job where you were going to be fired or miss 
your paycheck for missing hours, you were not going to be able 
to get that help, and that was going to destabilize your 
family.
    So what these States are doing is taking advantage of the 
existing flexibility to deliver it better. They do, as you say, 
save some administrative dollars because they are able to use 
information and data they have already got rather than having 
to process things multiple times over. But it is crucial to 
them that they have the Medicaid and SNAP structures as they 
are now, because that is how you can get the benefits to people 
quickly. So I think that is a great example of flexibility that 
exists now.
    Ms. ADAMS. Thank you. As a follow-up, how is service 
deliveries designed to not be a hindrance to working families, 
and how is the program structured to encourage families to work 
without disproportionately losing benefits?
    Ms. GOLDEN. Well, I think both SNAP and health benefits. So 
starting with SNAP. So, first of all, it is key that it is not 
a block grant program. It doesn't require somebody to spend 
hours interviewing you before you get your help with your 
nutrition. It is a program that responds to recession. I think 
Mr. Meehan highlighted that.
    So when somebody needs the help, it can happen based on a 
determination of their eligibility that you can do very quickly 
and in an automated way. SNAP also is important as a work 
support because of the gradual way that dollars phase out. So 
it takes into account the fact that you will have more expenses 
when you--when you work, and that gets taken into account.
    A number of States, about half the States have chosen an 
option that makes it even more--even less likely to have a 
cliff, which is the categorical eligibility option. So the 
Federal policy framework allows States to deliver it in a very 
effective way, and those States that take a hard look at their 
own delivery systems, their own computers, their own local 
offices, are able to then live up to that promise.
    Ms. ADAMS. Great. Thank you very much.
    Mr. Chair, I yield back.
    Chairman BOUSTANY. The gentlelady's time has expired.
    We will next go to Mr. Thompson.
    Mr. THOMPSON. Mr. Chairman, thank you for this hearing. 
It's very important.
    To all the members of the panel, thank you very much for 
coming, lending your experience, your expertise. I want to 
start out with Mr. Mulligan.
    In SNAP, we expected the program rules to increase with the 
recession. They did, rising by 81 percent since 2007 before 
finally peaking in 2013. Since that peak, we have only seen a 
decline of 3 percent. Can you talk more about what that data 
says about the situation, or are you at all surprised?
    Mr. MULLIGAN. Sure. Yeah. Our data is maybe a year or two 
out of date. I looked at SNAP before and during the recession 
through about 2011, and I saw that State by State, the rules 
had changed. And probably the biggest thing that had happened 
is the asset tests were eliminated, which eliminated some of 
the barriers bringing people into the program. So now it is 
easier to get into the program than it used to be. And so 
naturally, you have more people on the program. That is 
natural. The other economic side of it is you have to 
disincentive. Especially for unmarried people, it is a kind of 
new unemployment assistance program that can go far beyond 99 
weeks.
    Mr. THOMPSON. Thank you.
    Ms. GOLDEN. Could I just add to that? Because I think the 
answers that most economists have come up with who have looked 
into that is that it is now going down. SNAP rose with the 
recession. It is now going down. You would expect it to be 
somewhat a delayed effect, because the effect of better income 
for the bottom end of the labor force has happened last. So 
most people think it is about the economy, not about the policy 
changes.
    Mr. THOMPSON. I want to talk a little bit about within the 
process of the resources that are out there, because we talk 
about obviously, providing incentives, job training. I co-chair 
with a good friend of mine from Rhode Island, Jim Langevin, 
Career and Educational caucus. And so I want to talk about not 
so much a process, but the pathway in terms of job training. 
And we are preparing an education and workforce with the 
Perkins Act, which is all about job training, career and tech 
ed funding. And I am not sure I am going to have time to get 
input from someone, but if you have thoughts, I would 
appreciate you sending those to me in writing.
    So my question is I am looking for that response from, in 
your experiences, what are the key considerations to assure 
access to effective job training? In other words, job training 
that actually leads to a job, family-sustaining job and a 
greater--and a greater opportunity, put folks on that pathway? 
I do believe that our programs that we have, our safety net 
programs, SNAP, welfare--the other welfare programs, I think 
they really need to be defined by--as workforce development.
    Dr. STEUERLE. Mr. Thompson, if I could quickly answer. I 
think there are a lot of efforts in the educational area that 
are promising. I think apprenticeships are one of them, for 
instance, where we have done very little. But I would also like 
to comment, just general course of this hearing, there are 
these programs that I think namely aimed at mobility, 
education, training, I would probably include things like the 
earned income tax credit, and there are other programs that 
mainly aimed at consumption. It's the programs that are aimed 
at consumption, providing minimum levels of consumption that 
provide a lot of these cliffs and issues that we are facing.
    If you look at the budget for children, we mainly have been 
talking about programs for children, they are actually pretty 
much in decline. The earned income credit is an index. It 
doesn't grow with the economy. The child credit is an index for 
inflation. I am guessing SNAP benefits in real terms per person 
are not going up. They have expanding number of people getting 
them. TANF has certainly been declining rather than the 
economy. So those programs, children's programs, are actually 
well in decline. That is a separate subject, because all of our 
social welfare budget is going to health and retirement. So 
that is a different issue. So I think that what has happened to 
children's budget is it is eventually going to be turned 
around. I see an opportunity, when that turnaround comes, to 
start devoting more money to these mobility efforts. I am not 
saying that every mobility effort works, but these types of 
things like training and education do not create the types of 
disincentive effects that we are actually talking about here. 
Generally speaking, they are all in the positive incentive 
effect. I am not saying they all work, but I think there are a 
lot of opportunities about thinking about what a future budget 
would be if it moves in the direction you are talking about.
    Mr. THOMPSON. Thank you.
    Chairman BOUSTANY. The gentleman's time has expired. Mr. 
Davis your are--I am sorry--Mr. Davis, you are recognized.
    Mr. DANNY DAVIS OF ILLINOIS. Thank you very much, Mr. 
Chairman. I want to thank all of the witnesses for having been 
here.
    Dr. Golden, I know that you have done some work in 
Illinois, and you were here when Ms. McCorkle testified. I 
think maybe her situation may have been a little bit different 
in Illinois. Could you comment on that and why it may have 
been.
    Ms. GOLDEN. Sure. So Illinois is one of the 6----
    Chairman BOUSTANY. Please use your microphone.
    Ms. GOLDEN. Illinois is one of the six States that we are 
working with. And I would say a couple of things, both 
similarities and differences to Ms. McCorkle's situation. 
Illinois and Maryland have both made the choice to expand 
Medicaid. So they are both States where taking a job--leaving 
welfare and taking a job isn't going to force a parent to lose 
their health insurance. So that is very important.
    One of the things that Ms. McCorkle highlighted in Maryland 
was about child care, right? It was about not only your 
challenges in the co-pay now, but the fact that when you were 
working before you went on welfare, you couldn't get compiled 
care, because Maryland has a waiting list. Illinois, by 
contrast, has a historic commitment to not having a waiting 
list and to serving family, but the challenge right now is that 
in terms of dollars, it goes back to that point that what the 
States need is not flexibility, but resources. They are very 
stressed trying to be able to keep that commitment. And so 
additional Federal dollars to address child care needs for low-
income working families, I think will be very important in the 
future as Illinois seeks to keep that commitment.
    Mr. RANDOLPH. Can I interject on that? This is an issue 
that we have studied. We have studied the child care issue 
specifically in Illinois, and I have also worked with the 
program in Pennsylvania and a couple of other States. It is 
true that in Illinois, you do not have a waiting list for child 
care. However, there are a number of steps that they can take 
administratively to reduce the cost. The child care program in 
Illinois is costing approximately $1.2 billion with a State 
budget general fund of only $34 billion. So it is a significant 
program, but there is certainly steps they can take 
administratively to bring the costs down. You do not need to 
increase Federal dollars to give to the State to solve the 
problem. A lot of the problem can be solved simply by the 
States better managing it.
    Mr. DANNY DAVIS OF ILLINOIS. Thank you both very much. And 
by no stretch of imagination would I suggest that Illinois does 
not have problems and unmet needs. But I did want to point out 
this difference because of the fact that there was a strong 
advocacy effort on the part of citizens who made it happen, and 
I simply wanted to give them an accolade for that.
    So thank you very much, Mr. Chairman, and I yield back.
    Chairman BOUSTANY. I thank the gentleman.
    Next, we will go to Mr. Crowley. You are recognized now for 
3 minutes.
    Mr. CROWLEY. Thank you, Mr. Chairman. I did miss the 
Chairman Ryan's opening statement, but I did take note in his 
printed version of it that he quoted a very popular person to 
quote these days, Pope Francis. And he said where there is no 
work, there is no dignity. I think we can all find agreeance in 
that. I know Mr. McGovern and Ms. Fudge talked about the 
importance of a living wage. So here is another quote from Pope 
Francis, and I quote, ``A just wage enables human beings to 
have adequate access to all the other goods which are destined 
for our common use.'' And that is from Joy of the Gospel 192. 
So I hope this means we can consider legislation to raise the 
minimum wage since Pope Francis said that as well. We won't 
quote the climate change; I don't have enough time right now 
for that. But I do want to thank the chairman. I want to thank 
our colleagues from the Ag Committee for joining us today as 
well.
    Let me start by saying that I think the majority of us here 
want to support, and do support work while we strengthen our 
safety net programs. It is not an either/or situation.
    Ms. Golden, you mentioned explicitly in your testimony that 
there is overwhelming evidence that the safety net supports 
work. So that is important to recognize. But I do want to make 
sure we are clear on what it means to support and encourage 
work. To me that meaning strengthening, not weakening programs 
like the earned income tax credit and the child tax credit. 
These are programs that directly and without doubt reward work 
for lowest income families. It gives them the net effect of 
earning more, puts more money in their pockets. We need to 
extend the expiring provisions of these program and ensure they 
are reaching their full potential for the families that they 
serve.
    Enhancements like linking the amount of the child tax 
credit through inflation, making permanent the higher credit 
amount set in the American Recovery and Reinvestment Act, and 
make the tax credits fully refundable. Another critical part of 
the encouraging work through the safety net is child care. And 
I appreciate the discussions before my testimony.
    No matter what problem we are looking at, if we want to 
help people work, we need to help them find and afford child 
care for their children. If they simply will not work, we will 
just be piling on to the social ills of a society which the 
other side of the aisle would decry at the same time.
    So otherwise, you can add in as many work requirements, 
restrictions and other burdens you think of, and all you will 
end up doing is forcing people off these programs to make those 
tough choices, and quite frankly, spiraling them further into 
deeper poverty. We need to make a significant investment in 
child care to make sure it reaches more people who need it. I 
will soon be reintroducing my Child First Act to make a greater 
investment in funding for child care.
    President Obama has proposed investing $82 billion over 10 
years in mandatory funding for child care, which provide more 
than an additional 1 million children under age 4 with access 
to quality child care, not only helps the child, but helps the 
family, helps society, and helps people work.
    And with that, I will yield back to the chairman.
    Chairman BOUSTANY. I thank the gentleman.
    Next we will go to Ms. Grisham. You are recognized for 3 
minutes.
    Ms. LUJAN GRISHAM. Thank you, Mr. Chairman. In this 
committee, my arms are barely long enough to actually reach the 
button for the microphone, so thank you for your patience.
    I am also very appreciative for the joint committee 
hearing. And Mr. Chairman, I appreciate the opportunity to talk 
about not only basic benefits, but a benefit that in my State 
is incredibly important, which is the SNAP benefit.
    And I really appreciate the remarks of my colleague, Mr. 
Crowley, because I agree that we have a tendency, as 
policymakers, to do an all-or-nothing design that we believe 
potentially, and based on some of the testimony, that welfare 
or entitlements or government support programs actually create 
a disincentive to work.
    And in my opinion, and in my experience, a disincentive to 
work is poverty. A disincentive to work is hunger. A 
disincentive to work is lack of adequate education and support 
and investment. Environmental barriers, transportation 
barriers, there are no dearth, and they are all really 
devastating aspects and barriers to work.
    Now in my State, we have one of the worst economic 
recoveries in the country. We also have the hungriest children 
in the country. Not something I am very proud of. And I would 
love to see Congress and my State legislature declare a war on 
poverty and assure that no child in my home State ever goes 
hungry ever, ever again. It is devastating.
    We also have one of the hungriest adult populations in the 
country. And while I tell you this, because of this debate, our 
State is enhancing our work requirements on young families, 
mothers who are 19 without the education, training, or support 
even in a productive job market to attain that work 
requirement.
    We don't have jobs. We are the only State in the country 
where we have a migrating effect where people have to leave the 
State to get jobs. This only translates to families losing 
benefits, which means they have no opportunity to have their 
basic needs met while we, as policymakers, figure out those 
balances so that we create a safe and effective environmental 
effort.
    With whatever time I have left, can anyone talk about 
making sure that there are ideas for States like New Mexico 
where you cannot meet even the basic work requirements but we 
don't want to minimize that people do want dignity and want 
effective productive work available to them in a meaningful 
way.
    Ms. GOLDEN. Let me underline--I am sorry.
    Mr. RANDOLPH. I can. You are correct that we still have an 
issue of poverty in this Nation, absolutely. However, I just 
want to say that if we attempt to solve the problem one piece 
at a time, we are not going to get the answer. And let me just 
go to what we talk about, training. I sat in a focus group. I 
was not the participant. I was helping managing the focus 
group, where we have had people who received training, but they 
ran into that ladder, where the rungs are kicked out and they 
had to give up a better job that offered more because they 
would lose benefits.
    So if we continue to look at this piece, just the SNAP 
alone or another program over here, and hope that that is 
somehow going to solve the problem, we will never get at the 
answer. You have to approach it systemically. You have to look 
at all the programs together and how do you combine the 
programs.
    Ms. LUJAN GRISHAM. As long as, Mr. Randolph--I am going to 
reclaim part of my time.
    Mr. Chairman, I don't know how much time I have.
    Chairman BOUSTANY. You still have time.
    Ms. LUJAN GRISHAM. Can I go to Ms. Golden?
    Ms. GOLDEN. Yes. So what I would highlight is that, first 
of all, you are absolutely right about the extent to which 
poverty itself is a barrier to work. And the research supports 
that and says that if you are able to eat and your life isn't 
disrupted, and you are not constantly evicted, that contributes 
to working and moving up. So I think that is exactly right.
    And I do think that the other--with only one moment to say, 
that job training for adults ought to go hand in hand with 
investment in kids with children not being hungry. That is an 
opportunity investment, right? We know that when kids are not 
hunger and are able to get their health taken care of and in 
early child care, that in itself is an opportunity investment 
in their later lives. So we ought to be putting these things 
together.
    Ms. LUJAN GRISHAM. Thank you, Mr. Chairman I yield back.
    Chairman BOUSTANY. The gentlelady's time has expired.
    Ms. Noem.
    Mrs. NOEM. Thank you, Mr. Chairman. One of the tenets of 
the American dream is that no matter what your circumstances 
are, if you work hard here in America, that you can succeed. In 
South Dakota, we have a very strong work ethic and many are 
willing to put in long, hard hours to make life better for 
their families. It is those values that I try to instill in my 
own children, and I follow when I am serving the people of 
South Dakota here in Congress.
    But, unfortunately, the Federal Government doesn't always 
operate that way. Instead of encouraging work and taking home 
higher pay, the programs can create disincentives to work, and 
we have heard some of that testimony by all of here today. It 
might not always make sense economically for a family to work 
more hours or at higher wages in the current system that we 
have today with a lot of our programs.
    So, Ms. Netus, I wanted to ask you specifically, setting 
aside the work disincentive effects of these programs, does the 
shear complexity behind multiple benefit programs and tax 
programs help or hurt families? Does it promote work and self-
sufficiency?
    Ms. NETUS. I think it promotes work with limitations. I 
mean, we have people that are eager to go to work so they want 
to do so, but it is kind of they are tossed as to whether or 
not they should take a full-time job versus a part-time job.
    Mrs. NOEM. So would it help to streamline the programs in a 
manner that wouldn't be so complex to help them utilize it in a 
manner better to allow them to work and potentially have a 
transitional program?
    Ms. NETUS. I think so. I mean, we are looking more so for a 
longer transitional period. I do know that in Maryland, they do 
provide that, but, again, it is the timeframe or it is kind of 
immediate that the transition happens, not often giving the 
person the time or chance to really be able to build and save. 
So it would be--you would need a transitional period. A little 
bit more extended than what they have right now in order for 
the person to be able to maintain.
    Mrs. NOEM. Do you feel that most people need assistance 
from an organization like yours in order to navigate the 
programs that are currently available?
    Ms. NETUS. They do. They need us because we know how to 
essentially walk them through the system. Most people who are 
going through this process, they have no one to tell them how 
to do it. So when they come to our organization, we can help 
explain a lot of the changes they are going to undergo. And so 
a company like ours would definitely be able to help a person 
like Chanel as we plan to do as she goes through her next 
transition into employment.
    Mrs. NOEM. Well, Ms. McCorkle, I wanted to ask you that. Do 
the agencies providing you benefits give you clear information 
about what happens if you work and if you earn more money? Have 
you ever discussed with live people that are a part of these 
agencies and departments what the consequences are? Did you 
need an organization like Ms. Netus is a part of in order to 
have that kind of clarification?
    Ms. MCCORKLE. I actually did need America Works to help it 
because when you are applying for your benefits, you don't 
actually speak to anybody. Nobody actually tells you what is 
going to happen when you get your job. It just happens that 
they find out you work, the letter comes in the mail telling 
you this is cut, this is cut, and this is what is happening.
    And then you are at the office. You come to the office and 
you want to talk to somebody. Half the time you don't get your 
caseworker, you just get a different representative. They don't 
explain it. They just tell you what happened. They don't 
actually explain anything. It just comes through the mail.
    Mrs. NOEM. Okay. I appreciate that testimony. That is very 
helpful.
    Thank you. I yield back, Mr. Chairman.
    Chairman BOUSTANY. Mr. Smith.
    Mr. SMITH. Thank you, Mr. Chairman.
    Ms. McCorkle, it is a pleasure to hear your testimony 
earlier, and I just thought it was very troubling, whenever you 
look at the journey and the path that you had to take, but it 
shows that you are a remarkable human being and you are doing 
an amazing job, and I am extremely proud of you, to see 
everything.
    When I look at your testimony, that it talks about the 
child care, that you couldn't get the childcare vouchers when 
you had a job, but when you didn't have a job, you could get 
the childcare vouchers when you are home. The whole process 
just isn't working. And I just appreciate you being here before 
the committee, and I just want to say thank you.
    In regards to Mr. Mulligan and Mr. Steuerle, I would like 
to hear if you both would like to add some additional comments 
of how you could help incentives that we could try to break 
this poverty trap to the benefits curve.
    Dr. STEUERLE. Mr. Smith, as I said in my testimony, I think 
the real way around this trap to break the Gordian Knot is to 
start thinking in the future--because government does gradually 
grow, and the social welfare budget does grow just because the 
economy grows, it might be a smaller share of the economy or 
larger--is to think about orienting more and more resources 
towards things that provide mobility. It is education, it is 
wage subsidies, it is a lot of the other items we have talked 
about. And I think we have been moving in that direction. If 
you look at both what welfare reform did, moving away from 
AFDC, we have sort of been moving in that direction.
    When we just try to provide minimum levels of consumption 
by itself, initially, when people are starving or something, it 
doesn't look good, but above certain levels it provides a lot 
of discouragement. But things like primary, secondary education 
doesn't discourage. So if we start moving the budget towards 
this mobility front, I think we can go a long way.
    And I would just like to clarify one earlier part of this 
debate between whether these programs do or do not discourage 
work. The movement we had recently has moved us away from a 
poverty trap to what one of my colleagues and I nowI call a 
twice poverty trap or three times poverty trap, it is from 
about zero to about $15,000 of income.
    We have moved our programs in the direction of encouraging 
work. And if you take most of the examples that people around 
the table have given, when you get to about $15,000 of income 
up to about $55,000 of income, now you have got average tax 
rates of maybe 66 percent in universal programs, 70 or 80 
percent in the non-universal, and then you add on child care, 
and you can get this type of trap.
    So I think you have to distinguish where we are talking 
about these traps encouraging, and right now, it is this trap 
where if you move, as I say, beyond a part-time job, you marry, 
you get a second job, that is where we really are discouraging 
work quite a bit, or moving to a higher-paying job, as several 
people have mentioned.
    Mr. MULLIGAN. I will also speak for something that hasn't 
been represented, and that is the marketplace, the employers, 
they are teaching people things. It is not just government 
programs that teach people things, not even just schools, even 
though I come from one.
    And things like the minimum wage go exactly in the wrong 
direction. What the minimum wage says is you have to--a job is 
a mix of things you learn and cash to take home, and the 
minimum wage says: Look, you have to put it all into cash and 
very little into learning. And that is only going to make these 
kind of traps worse.
    Human capital is many most important asset in America and 
in the world, and policies like these discourage the 
accumulation of human capital and keep people's incomes low.
    Chairman BOUSTANY. I thank the gentleman. The gentleman's 
time has expired.
    Before we close this hearing, I want to read two quotes out 
for the record. One is from Harvard Professor Jeff Liebman, 
former economic adviser to President Obama, and I quote: 
``Despite the EITC and child credit, the poverty trap is still 
very much a reality in the U.S.,'' end quote.
    And then the second quote comes from Congresswoman Gwen 
Moore, who during a June 2012 Human Resources Subcommittee 
hearing said, I quote: ``I once had a job and begged my 
supervisor not to give me a 50-cent-an-hour raise, lest I lose 
daycare,'' end quote.
    The fact is, we still have poverty, the poverty trap still 
exists, and the problem is complicated by the fact that we have 
a myriad of programs that have been created over the course of 
years without good coordination. And so this hearing, this 
joint hearing is a start in trying to unravel that Gordian Knot 
so that we have these programs that will work best for those 
that they are intended to work for.
    And with that, Ms. McCorkle, I think your personal story 
was very compelling, very helpful to us. I just want to say 
thank you for your courage in coming forward to present it.
    I want to thank all of our witnesses for the tremendous 
expertise you bring to the table. And as we try to deal with 
this complex problem of how the program has disincentives to 
move into the work world, you all did a terrific job to help us 
shed light on these issues. I think members may have additional 
questions, which we will submit to you in writing, and we would 
appreciate your responses for the record within 2 weeks.
    Chairman BOUSTANY. I also want to close by thanking our 
colleagues on the Nutrition Subcommittee, starting with 
Chairwoman Walorski, Ranking Member McGovern. From my 
perspective, working together like this can only be helpful in 
our efforts to provide better, more coordinated services for 
those in need.
    I want to thank Chairman Ryan and Chairman Conaway and the 
rest of our colleagues also on the Ways and Means Committee. I 
thank you and your staff for working with us to make this joint 
hearing a reality. I look forward to working more with everyone 
concerned in the weeks ahead.
    And with that, the subcommittee now stands adjourned.
    [Whereupon, at 12:08 p.m., the subcommittees were 
adjourned.]

    [Submission for the Record follow:]

                             Feeding Texas

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