[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
PRESIDENT'S PLAN TO BUILD ON THE SUCCESSES OF WELFARE REFORM FEATURING
HHS SECRETARY THOMPSON
=======================================================================
HEARING
before the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
MARCH 12, 2002
__________
Serial No. 107-53
__________
Printed for the use of the Committee on Ways and Means
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78-687 WASHINGTON : 2002
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COMMITTEE ON WAYS AND MEANS
BILL THOMAS, California, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
E. CLAY SHAW, Jr., Florida FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California
AMO HOUGHTON, New York WILLIAM J. COYNE, Pennsylvania
WALLY HERGER, California SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota GERALD D. KLECZKA, Wisconsin
JIM NUSSLE, Iowa JOHN LEWIS, Georgia
SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts
JENNIFER DUNN, Washington MICHAEL R. McNULTY, New York
MAC COLLINS, Georgia WILLIAM J. JEFFERSON, Louisiana
ROB PORTMAN, Ohio JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania XAVIER BECERRA, California
WES WATKINS, Oklahoma KAREN L. THURMAN, Florida
J.D. HAYWORTH, Arizona LLOYD DOGGETT, Texas
JERRY WELLER, Illinois EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
Allison Giles, Chief of Staff
Janice Mays, Minority Chief Counsel
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C O N T E N T S
__________
Page
Advisory of March 5, 2002, announcing the hearing................ 2
WITNESSES
U.S. Department of Health and Human Services, Hon. Tommy G.
Thompson, Secretary............................................ 11
SUBMISSION FOR THE RECORD
Portman, Hon. Rob, a Representative in Congress from the State of
Ohio........................................................... 49
PRESIDENT'S PLAN TO BUILD ON THE SUCCESSES OF WELFARE REFORM FEATURING
HHS SECRETARY THOMPSON
----------
Tuesday, March 12, 2002
House of Representatives,
Committee on Ways and Means,
Washington, DC.
The Committee met, pursuant to notice, at 2:33 p.m., in
room 1100 Longworth House Office Building, Hon. Bill Thomas
(Chairman of the Committee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE
March 5, 2002
No. FC-17
Thomas Announces a Hearing with
HHS Secretary Thompson on the President's Plan
to Build on the Successes of Welfare Reform
Congressman Bill Thomas (R-CA), Chairman of the Committee on Ways
and Means, today announced that the Committee will hold a hearing on
the President's plan to strengthen welfare reform. The hearing will
take place on Tuesday, March 12, 2002, in the main Committee hearing
room, 1100 Longworth House Office Building, beginning at 2:30 p.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from the Honorable Tommy G. Thompson,
Secretary, U.S. Department of Health and Human Services. However, any
individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Committee and for
inclusion in the printed record of the hearing.
BACKGROUND:
The Personal Responsibility and Work Opportunity Reconciliation Act
of 1996 (P.L. 104-193), commonly referred to as the 1996 welfare reform
law, made dramatic changes in the Federal-State welfare system designed
to aid low-income American families. The law repealed the former Aid to
Families with Dependent Children program, and with it the individual
entitlement to cash welfare benefits. In its place, the 1996
legislation created a new Temporary Assistance for Needy Families
(TANF) block grant. It provides fixed funding to States to operate
programs designed to achieve several purposes: (1) provide assistance
to needy families, (2) end the dependence of needy parents on
government benefits by promoting job preparation, work, and marriage,
(3) prevent and reduce the incidence of out-of-wedlock pregnancies, and
(4) encourage the formation and maintenance of two-parent families. In
exchange for the broad flexibility and fixed funding granted States,
the 1996 law imposed certain key program requirements, notably work
requirements and time limits on Federal benefits.
The achievements of welfare reform have been dramatic. Caseloads
have been reduced by 9 million individuals in 3 million families.
Nearly 3 million children have been lifted from poverty, and work among
current and former welfare recipients has risen to record highs. Yet
despite these outstanding results, far too many individuals receiving
assistance are not making progress toward self-sufficiency. Troubling
social trends such as out-of-wedlock birthrates, teen pregnancy, and
divorce remain at or near record levels, exacerbating challenges faced
by low-income families to achieve self-sufficiency.
To ensure that the Committee and the Congress review the effects of
the fundamental changes made in the 1996 law, the authors of the 1996
law extended the authorization of the TANF program only through fiscal
year 2002. In early February, the President laid out a framework of his
proposal to reauthorize TANF and strengthen welfare reform in his
fiscal year 2003 budget. On February 26, he provided further details of
his plan. This hearing will provide the Secretary with an opportunity
to discuss the President's detailed proposals.
``The welfare reform law has been a great success,'' said Chairman
Thomas. ``Expecting and supporting work has made a huge difference in
the lives of millions of families. Caseloads have plummeted, work and
incomes are up, and poverty has fallen dramatically. We welcome
Secretary Thompson, the leader of the welfare reform revolution as
Governor of Wisconsin in the 1980s and 1990s, to discuss with the
Committee the President's proposals for strengthening welfare reform
and helping even more low-income families enjoy the dignity and rewards
of work and self-support.''
FOCUS OF THE HEARING:
The hearing will review the President's welfare reform
reauthorization proposal.
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Note: All Committee advisories and news releases are available on
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The Committee seeks to make its facilities accessible to persons
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call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four
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noted above.
Chairman Thomas. Today, we will examine President Bush's
proposal to build on the success of welfare reform. Before
1996, our welfare system measured compassion by how many people
were on the welfare rolls. Changes to our welfare system were
fiercely resisted because there were some who rejected the
notion that handouts were better than a hand up. Some in 1966
still could not conceive of a world where compassion's new
measure would be how many people left welfare for work and
independence.
Immediately prior to the passage of welfare reform, for
example, the Urban Institute forecasted that a million new
children would enter poverty if welfare reform prevailed.
Others were a bit more apocalyptic. The Children's Defense Fund
predicted the welfare reform law, ``will hurt and impoverish
millions of children.'' Of course, these dire predictions never
materialized. What we have seen instead is a record of
tremendous success in lifting children from poverty, promoting
work, and ending dependence.
Prior to 1996, the average lifetime stay on welfare for
families receiving benefits was 13 years. Since their peak in
1994 as reforms got underway in many States, caseloads have
fallen by 9 million from a record high of 14 million recipients
in 1994 to just 5 million people today. That is a 60 percent
drop.
Welfare reform has lifted nearly 3 million people out of
poverty. The African American child poverty rate and the
poverty rate for children living with single mothers are both
at the lowest points in U.S. history. Between 1995 and 1999,
the poorest 40 percent of single-mother families increased
their earnings by about $2,300, on average.
Welfare reform increased work, boosted income, it has
improved child poverty, and reduced dependency. It has been a
success, but we need to build on that success. Our priority is
to help more people successfully transition to work because
work is the only real and permanent path out of poverty.
Observers should note that the grounds have shifted.
Virtually no one today is suggesting that we go back to the old
ways of providing checks and expecting little of recipients. We
largely agree that the new structure of welfare with its
emphasis on work and self-sufficiency has provided opportunity
and dignity to people who were once trapped in a failed system.
Our debate to reauthorize welfare, as heated as it may
become at times, is truly on the margin. Some of these margins
are important, such as increasing meaningful education to
enhance work, such as opportunities for better child care
assistance.
Joining us today to review the President's proposal for the
next round of welfare reform is Secretary Tommy Thompson of the
U.S. Department of Health and Human Services (HHS). Secretary
Thompson was a national leader in the welfare reform movement
as Governor in Wisconsin. Many of our Members worked closely
with him, in fact, to craft the 1996 law. We look forward to
working closely with him in his current role to ensure that
welfare reforms continue to help poor families go to work and
to achieve self-sufficiency.
Prior to my recognizing the Chairman of the Human Resources
Subcommittee, Mr. Herger, the Chair would like to acknowledge
the loss of a friend of all of us, Dr. John Eisenberg, who had
helped establish the Physician Payment Review Commission and
then went on to make sure that, as Director for the Agency for
Health Care Research and Quality, in fact, turning that
institution around to make it a success. He passed away this
last week with very, very short notice. He was a very young,
bright, energetic, talented individual, and I know that we have
all worked with him and he will be missed.
Mr. Herger?
[The opening statement of Chairman Thomas follows:]
Opening Statement of the Hon. Bill Thomas, a Representative in Congress
from the State of California, and Chairman, Committee on Ways and Means
Today, we will examine the President's proposal to build on the
success of welfare reform.
Before 1996, our welfare system measured compassion by how many
people were on the welfare rolls. Changes to our welfare system were
fiercely resisted because there were some who rejected the notion that
handouts were better than hand ups.
Some in 1996 still couldn't conceive of a world where compassion's
new measure would be how many people left welfare for work and
independence. Immediately prior to the passage of welfare reform, for
example, the Urban Institute forecasted that a million more children
would enter poverty if welfare reform prevailed.
Others were more apocalyptic. The Children's Defense Fund predicted
the welfare reform law ``will hurt and impoverish millions of
children.''
Fortunately, these dire predictions never materialized.
What we have seen instead is a record of tremendous success in
lifting children from poverty, promoting work, and ending dependence.
Prior to 1996, the average lifetime stay on welfare for families
receiving benefits was 13 years. Since the peak in 1994 as reforms got
underway in many states, caseloads have fallen by nine million, from a
record high of 14 million recipients in 1994 to just five million
people today--that's a 60 percent drop.
Welfare reform has lifted nearly three million people out of
poverty. The African-American child poverty rate and the poverty rate
for children living with single mothers are both at the lowest points
in U.S. history.
Between 1995 and 1999, the poorest 40 percent of single mother
families increased their earnings by about $2,300 on average.
Welfare reform increased work, boosted incomes, improved child
poverty and reduced dependency. It has been a success. But we need to
build that success.
Our priority is to help more people successfully transition to
work, because work is the only real and permanent path out of poverty.
Observers should note that the ground has shifted. Virtually no one
today is suggesting that we go back to the old ways of providing checks
and expecting little of recipients. We largely agree that the new
structure of welfare, with its emphasis on work and self-sufficiency,
has provided opportunity and dignity to people who were once trapped in
a failed system.
Our debate to reauthorize welfare, as heated as it may become at
times, is truly on the margins. Some of these margins as important.
Such as: increasing meaningful education to enhance work. Such as:
opportunities for better child care assistance.
Joining us today to review the President's proposal for the next
round of welfare reform is Secretary Tommy Thompson of the Department
of Health and Human Services. Secretary Thompson was a national leader
in the welfare reform movement as Governor of Wisconsin. Many of our
Members worked closely with him to craft the 1996 law. We look forward
to working closely with him in his current role to ensure that welfare
reforms continue to help poor families go to work and achieve self-
sufficiency.
Prior to my recognizing the Chairman of the Human Resources
Subcommittee, Mr Herger, the Chair would like to acknowledge the loss
of a friend of all of us, Dr. John Isenberg, who had helped establish
the physician payment review commission and then went on to make sure
that as director for the agency for Healthcare Research and Equality--
in fact turning that institution around to make it a success, passed
away this last week with very, very short notice. He was a very young,
bright, energetic, and talented individual and I know we have all
worked with him and he will be missed.
Mr. Herger. Thank you, Chairman Thomas. I will make my
remarks short this afternoon and submit my entire statement for
the record.
We welcome Secretary Thompson, a longtime expert on welfare
reform. As Governor of Wisconsin, he acted based on what he
knew, what we always knew about welfare, that dependence on
benefits, on receiving a check without working for it, was a
destructive path. We knew this because we were warned. In a
1935 message to Congress, President Franklin Roosevelt, the
author of the former welfare program told us, ``The lessons of
history show conclusively that continued dependence upon relief
induces a spiritual and moral disintegration, fundamentally
destructive to the national fiber. To dole out relief in this
way is to administer a narcotic, a subtle destroyer of the
human spirit. It is in violation of the traditions of
America.''
Yet, by the early 1990s, that is what welfare had become, a
destroyer of the human spirit. So Wisconsin first, and then
other States, set about making common sense changes that
benefited those once trapped on welfare by showing them the
path off welfare, the path of work. This became the standard
for the Nation's welfare reform program in 1996. By any
measure, that program has been a tremendous success.
The reason is clear. Work replaced welfare as the 1996 law
intended. Some said it could not be done. Fortunately, they
were wrong. But this story is still far from over and we cannot
stop here. Today, Secretary Thompson will present the
President's proposal to strengthen welfare reform in the
future. As we will hear, he is offering a strong foundation for
us to build on.
Once again, we welcome Secretary Thompson and look forward
to working with him to get this critical job done. Thank you,
Mr. Chairman.
[The opening statement of Mr. Herger follows:]
Opening Statement of the Hon. Wally Herger, a Representative in
Congress from the State of California
We welcome Secretary Thompson, a long-time expert on welfare reform
dating to his many years as Governor of Wisconsin.
Then-Governor Thompson acted based on what he knew--what we always
knew--about welfare. That dependence on benefits, on receiving a check
without working for it, was a destructive path.
We knew this because we were warned. President Franklin Roosevelt,
the author of the former welfare program, told us:
``The lessons of history . . . show conclusively that continued
dependence upon relief induces a spiritual and moral
disintegration fundamentally destructive to the national fiber.
To dole out relief in this way is to administer a narcotic, a
subtle destroyer of the human spirit. . . . It is in violation
of the traditions of America.'' \1\
---------------------------------------------------------------------------
\1\ Annual message to Congress, January 4, 1935.
Yet by the early 1990s that is what welfare had become--a destroyer
of the human spirit. So Wisconsin first and then other states set about
making common-sense changes that benefited those once trapped on
welfare by showing them the path off welfare--the path of work. This
became the standard for the nation's welfare reform program in 1996.
By any measure, that program has been a tremendous success.
As Chairman Thomas mentioned, the number of children in poverty is
down by nearly 3 million, and the poverty rate is at record lows for
families most likely to fall into long-term dependence.
The reason is clear. Work replaced welfare, as the 1996 law
intended. Work by mothers most likely to go on welfare has risen by 40
percent. And caseloads plummeted by 60 percent. These are unprecedented
changes we all can be proud of.
But we should be even prouder of the millions of low-income
parents--mostly single mothers--whose hard work made a better life for
their families.
Some said it couldn't be done. One group called the bill ``reckless
and wrong'' and predicted it ``will create a social catastrophe by
cutting off critically needed assistance to millions of our poorest
children.'' \2\ The New York Times said ``the effect on some cities
will be devastating'' and charged it was ``simply wrong'' that the bill
would replace welfare checks with paychecks.\3\ One Member of this
House said ``The real world will teach everyone in this Congress that
you are hurting children.'' \4\
---------------------------------------------------------------------------
\2\ Catholic Charities USA, press release, August 1, 1996.
\3\ NYT Editorial August 1, 1996.
\4\ Carrie Meek, floor of U.S. House, July 31, 1996.
---------------------------------------------------------------------------
Fortunately, they were wrong. But this story is still far from
over, and we can't stop here.
Today we welcome Secretary Thompson to present the President's
proposals to strengthen welfare reform in the future.
We learned last week in a Human Resources Subcommittee hearing that
58 percent of current welfare recipients are not working or even
participating in training. That's not acceptable.
The President's plan expects more recipients to work and move up
the economic ladder, not two years after going on welfare but right
away. He provides funding to make that work. And he expands state
flexibility to provide drug abuse and mental health services as well as
education and training to help parents get better jobs.
His legislation also includes more funds for additional services to
strengthen families and promote healthy marriage, which we know is the
best way to raise children.
This is a strong foundation for us to build on as we renew welfare
reform. We welcome Secretary Thompson, and look forward to working with
him to get this critical job done.
Chairman Thomas. I thank the gentleman. Does the gentleman
from New York, the Ranking Member, wish to make an opening
statement?
Mr. Rangel. Thank you, Mr. Chairman.
Mr. Secretary, you and I debated the question many times
before you took office as Governor. I did not think that the
Federal Government should sever its responsibility to the poor
through entitlements then and I still think that we should not
have done that. I did not think that the Governors would
perform as well as they have, and you were right in stating, as
a Governor, and now, I hope, as Secretary, that they have the
responsibility and the less the Federal Government could get
involved, the better these serious and complex problems could
be handled.
I would want you to know that it is my belief, especially
after listening to the Chair and Ranking Member, that the
Administration might do better in reaching a bipartisan accord
on this issue by working with us and seeing what we can come up
with because I am afraid my Republican friends are looking for
some rhetoric for the campaign and we are just looking for a
solution to the problem.
So the main things that I am certain Mr. Cardin would
direct himself to the Administration, since it is impossible to
deal with the Members of the other part on this Committee,
would be the failure to include education as a factor to be
considered as something in addition to work; the failure to
allow the States, our Governors, to provide for legal
immigrants in the spirit of welcoming people to this great
republic; the fact that there are no funds for additional day
care costs, which is considered to be an unfunded mandate; and,
of course, there is no provision for inflation.
But there is something for us to work with. We look forward
to working with you and we are not going to allow our
Republican friends from stopping us to come up with a bill that
we all can agree on.
I would like to yield to Mr. Cardin, who has worked so hard
on this with the support of the Administration.
Mr. Cardin. Let me thank Mr. Rangel for yielding and thank
the Chairman for his patience.
Mr. Secretary, I know you want to work out a bipartisan
agreement. You have met with us. You have been very open in
your exchanges. You have worked with our staffs and we look
forward to continuing to work with you so that we can reach a
common goal of reauthorizing Temporary Assistance for Needy
Families (TANF), and I think we can do that in a bipartisan
way.
I would ask, though, that you look very carefully, as I
know you will, on four recommendations that were made by the
National Governors' Association (Governors') that are not
included in the proposed legislation that you have talked
about. As a former Governor, I think you will appreciate each
of these issues and these are the ones I hope that--I am
concentrating where I think we have differences rather than a
lot that we have in common, because there is an awful lot that
we go into this debate on the same level.
The Governors' are asking for more flexibility,
particularly as it relates to determining the mix of training
services and work and what will best fit the needs of the
individual recipient. I am afraid that, in some cases, the
Administration's suggestion actually moves in the opposite
direction in regards to the flexibility of the States to make
that judgment.
Secondly, the Governors' are asking for inflationary
increase in the basic TANF funds, and I know this is a tough
year for funds, but if we make no adjustments, then over a 10-
year period, we will actually see a reduction of about 22
percent in the buying power of the money that the Federal
Government is making available, and as you know, the States are
currently spending $2 billion more a year on TANF than they are
receiving because they squirreled away some of the money from
the early years.
Third, the Governors' have suggested repealing the ban on
the use of Federal funds to deal with legal immigrants within
the TANF system. This is not really a dollar issue as it
relates to Federal funds because we make it available in block
form to the States. It is how the States choose to use their
money, and if they choose to cover legal immigrants under the
restrictions that are imposed under general use of funds, why
should they not be allowed to do that?
And the fourth issue deals with a program which I know that
you support and that is wage supplements, getting people who
are working income that they need in order to survive and
thrive in our economy, and we should remove the penalties in
the current law as it relates to wage supplements and our
Governors' have asked us to do that.
Let me just ask one additional issue in regards to
resources and that is child care. You have heard that mentioned
by many of us, that we are not providing enough help today for
the necessary child care, and as we put more and more
requirements on work, the pressure for affordable child care
will only become greater.
Finally, I want to make it very clear that there is no
disagreement that work must be the central goal of welfare
reform. However, there is a clear difference between short-term
unpaid work experiences and long-term wage-paying jobs. So as
we move forward, I know your goal is to make sure that the next
step of welfare reform is to get people not only off of cash
assistance, but out of poverty, because you want to add the
welfare of the child as the principal goal. You know that I
feel we should add reducing poverty. So we share a common
vision as to where we want to see us move in the next 5 years.
Thank you, Mr. Chairman.
[The opening statement of Messrs. Rangel and Cardin
follows:]
Opening Statement of the Hon. Charles B. Rangel, a Representative in
Congress from the State of New York, and the Hon. Benjamin L. Cardin, a
Representative in Congress from the State of Maryland
Mr. Secretary, you and I have debated the question many times
before you took office, when you were a governor. I did not think that
the Federal Government should sever its responsibility to the poor--the
entitlement--then. And I still think that we should have not done that.
I didn't think the governors would perform as well as they have. And
you were right in stating, as a governor and now I hope as Secretary,
that they have the responsibility and the less that the Federal
Government can get involved the better these serious and complex
problems can be handled.
I would want you to know that it is my belief, especially after
listening to the Chairman and Subcommittee Chairman that the
Administration might do better in reaching a bipartisan accord on this
issue by working with us and seeing what we can come up with. Because I
am afraid my Republican friends are looking for some rhetoric for the
campaign and we are just looking for a solution to the problem.
And so, there are many things that I am certain Mr. Cardin will
direct himself to if the Administration senses it is impossible to deal
with the Members of the other party on this Committee. These include
the failure to include education as a factor to be considered as
something in addition to work; the failure to allow the states--our
governors--to provide for legal immigrants in the spirit of welcoming
people to this great republic; the fact that there are no funds for
additional daycare costs, which is considered to be an unfunded
mandate; and, of course, there are no provisions for inflation.
But there is something for us to work with. We look forward to
working with you and we are not going to allow our Republican friends
to stop us from coming up with a bill that we can all agree on.
I would like to yield to Mr. Cardin, who has worked so hard on this
with the support of the Administration.
Mr. Cardin. Let me thank Mr. Rangel for yielding and thank the
Chairman for his patience.
Mr. Secretary, I know you want to work out a bipartisan agreement.
You have met with us. You have been very open in your exchanges and you
have worked with our staffs and we look forward to continuing to work
with you so that we can reach a common goal of reauthorizing TANF. And
I think that we can do that in a bipartisan way.
I would ask, though, that you look very carefully as I know you
will at four recommendations that were made by the National Governors'
Association that are not included in the proposed legislation that you
have talked about. As a former governor, you will appreciate each of
these issues.
I'm concentrating on where we have differences rather than the lots
we have in common. Because there is an awful lot that with which we go
into this debate on the same level.
The governors are asking for more flexibility, particularly as it
relates to determining the mix of training services and work which will
best fit the needs of the individual recipient. I am afraid that, in
some cases, the Administration's suggestion actually moves in the
opposite direction in regards to the flexibility of the states to make
that judgement.
Secondly, the governors are asking for inflationary increases in
the basic TANF funds. And I know it is a tough year for funds, but if
we make no adjustment then over a ten year period, we will actually see
a reduction of about 22% in the buying power of the money that the
Federal Government is making available. And, as you know, the states
are currently spending $2 billion dollars more a year on TANF than they
are receiving because they squirreled away some of the money from the
earlier years.
Third, the governors have suggested repealing the ban on the use of
Federal funds that deal with legal immigrants within the TANF system.
This is not really a dollar issue as it relates to Federal funds
because we make it available in block form to the states--it is how the
states choose to use their money. And if they choose to cover legal
immigrants under the restrictions that are imposed under general use
funds, why shouldn't they be allowed to do that?
And the fourth issue deals with a program which I know that you
support and that is wage supplements--getting people who are working
the income that they need in order to survive and strive in our
economy. And we should remove the penalties in the current law as it
relates to wage supplements and our governors have asked us to do that.
Let me just add one additional issue in regards to resources, and
that is childcare. You have heard that mentioned by many of us, that we
are not providing enough help today for the necessary childcare. And,
as we put more and more requirements on work, the pressure for
affordable childcare will only become greater.
Finally, I want to make it very clear that there is no disagreement
that work must be the central goal of welfare reform. However, there is
a clear difference between short-term unpaid work experiences and long-
term wage paying jobs. So as we move forward, I know that your goal is
to make sure that the next step of welfare reform is to get people not
only off of TANF assistance, but out of poverty. Because you know that
you want to add the welfare of the child as a principal goal. You know
that I feel you should add reducing poverty. So we share a common
vision as to where we want to see us move in the next five years. Thank
you, Mr. Chairman.
Chairman Thomas. I thank the gentleman.
Apparently, some folks are more interested in coming in and
making sure that their vitriolic comments were well memorized
rather than listening to what other people were saying. In the
Chair's opening remark, when he said that our debate to
reauthorize welfare, as heated as it may become, it will be
truly on the margins, what I said those margins were were
meaningful education to enhance work, which is an area that I
think all of us can agree we need to work on, and the second
one was better child care assistance. That is where we are
going to work, on the margins of improving the program.
But, of course, the predetermined disposition of Members of
this Committee in terms of unwillingness to admit that what
began has become modestly successful, but that needs
improvement and that we will work on improvement in those areas
that need improvement rather than the rejection outright of any
of the positions is one of the primary reasons it has become
relatively difficult to work in a bipartisan way. If we are
simply going to have blanket condemnation without even
listening to what people are having to say, then the desire to
try to draw people in to participate becomes less so.
This is a program we will reauthorize. I hope the minority
will work with us to have meaningful work experiences tied to
education, as the Administration has already suggested, and to
enhance the ability to provide child care for those who need
it. We will be working on those areas. We look forward to you
joining us in improving this program.
With that----
Mr. Levin. Will the Chairman yield?
Chairman Thomas. Mr. Secretary, it is a real pleasure to
have you with us. You are one of the reasons this program
worked, because we took you at your word and we gave you the
authority and you ran with it. Thank you very much for your
willingness to serve in the Bush Administration in your
capacity. We look forward to your remarks. Your written remarks
will be made a part of the record and you may address us in any
way you see fit.
STATEMENT OF THE HON. TOMMY G. THOMPSON, SECRETARY, U.S.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Mr. Thompson. Thank you very much, Mr. Chairman. First, let
me thank you for mentioning Dr. John Eisenberg. That was very
nice and I appreciate it, as his family will, as well. He was a
great man.
I thank you, Congressman Rangel and Congressman Herger and
Congressman Cardin, all of you for working so closely with my
Department in trying to come up with a bipartisan bill. I
applaud all of you for that.
I am honored to appear before you today to discuss the next
phase of welfare reform. Chairman Thomas, your leadership in
this historic effort to reform welfare has been tremendous and
our country truly is in your debt for it. Congressman Rangel,
we differ on some of the issues before us, but we are united in
our concern for families and I look forward to working with you
on this very important subject.
Over the past 5 years, welfare reform has exceeded our most
optimistic expectations. The 1996 law dramatically shifted
national welfare policy by promoting work, encouraging personal
responsibility, discouraging out-of-wedlock pregnancies and
supporting marriages. States were given unprecedented
flexibility in the design as well as the implementation of
their welfare programs. Families were given the help they need
to transition from welfare to work. And underlying all of these
changes, we restored an essential principle that had long been
lost, that welfare assistance was designed to be temporary, to
help families in crisis, and that dependence and poverty were
not permanent conditions.
Welfare was fundamentally reformed. As a result, nearly 7
million fewer individuals are on welfare today than in 1996.
Two-point-eight million fewer children are in poverty. Poverty
rates for minority children have decreased dramatically. These
things have occurred in large part because welfare has been
transformed and is transforming.
But even with these profound and positive changes, there
are still too many of our fellow citizens who have not begun to
realize a future of hope, too many children who lack essential
opportunities for growth and a good life, too many men and
women who remain trapped in a web of dependency and despair. So
now it is time for us to take the next bold step in reforming
welfare, and the President's proposals show us the way.
The President's priorities include strengthening work
requirements, promoting strong families, and giving States more
flexibility in showing compassion to those in need. These goals
have been central to the Administration's proposals for TANF,
child care, and child support.
Before outlining how we are addressing these issues, let me
make clear that the news reports last week about a plan to
change the minimum wage law were absolutely incorrect.
President Bush and I will insist that welfare recipients
receive at least the minimum wage for the hours that they work,
including community service jobs. This is an important
principle that I have fought for as Governor of Wisconsin and
one that the President and I remain committed to today as we
continue to reform welfare.
Now let me move on to discuss the TANF program. TANF has
moved millions of individuals from welfare to work. Employment
among single mothers has grown to unprecedented levels. Child
poverty rates are at their lowest level since 1979. Overall
child poverty rates declined from 20.5 percent in 1996 to 16.2
percent in 2000. Yet, much remains to be done and States still
face many challenges.
Our proposals seek $16.5 billion for block grants to States
and tribes, and an additional $319 million each year for
supplemental grants to States that have experienced high
population growth and had historically low funding levels. At
the same time, we will continue the current maintenance of
effort requirement to retain State contributions to assistance
for children and families. We will reauthorize and improve the
$2 billion contingency fund, and we will restore over 5 years
the policy permitting the transfer of up to 10 percent of the
TANF funds to the Social Services Block Grant.
We will also seek to maximize self-sufficiency through
work. First and foremost, States will be required to engage all
TANF families headed by an adult in activities leading to self-
sufficiency.
In addition to the requirement for universal engagement, we
will increase the direct work requirement. Our proposal
requires welfare recipients to engage in a 40-hour work week,
at least 24 hours of which must be in direct work, including
employment, on-the-job training, and/or supervised work
experience. We will allow substance abuse treatment,
rehabilitation, or work-related training for up to 3 months
within any 24-month period, and we will also gradually increase
the minimum participation rate requirements by 5 percentage
points each year.
Also recognizing the significant barriers to self-
sufficiency that tribes face, HHS will undertake a major new
technical assistance effort for tribal organizations to help
them build and administer effective tribal TANF programs.
Our proposal embraces the needs of families by promoting
child well-being and healthy marriages. To this end, we
establish improving the well-being of children as the
overarching purpose of TANF.
We will target $100 million from the discontinued out-of-
wedlock birth reduction bonus for broad research, evaluation,
demonstration, and technical assistance focused primarily on
healthy marriages and family formation activities. Our new
marriage initiative implies no criticism of single parents, who
deserve high praise for their dedication to their children. But
the data clearly demonstrates better outcomes for children
whose parents enjoy a healthy marriage. The negative
consequences of out-of-wedlock birth on the mother, the child,
the family, and society are well documented.
Children living in single-parent households are, on
average, five times more likely to be poor and two to three
times more likely to use drugs, experience educational, health,
and emotional problems, and be victims of abuse. Thus, it is
simply good sense to redirect our policies to encourage the
formation and the maintenance of healthy marriages, especially
when children are involved.
We will also redirect $100 million from the current law's
high-performance bonus to establish a competitive matching
grant program for the States and tribes to develop innovative
approaches to promoting healthy marriages and reducing out-of-
wedlock births. Funds will be matched dollar for dollar and
TANF funds may be used to meet this matching requirement.
Child support is an equally critical component of the
Federal and State effort to promote family self-sufficiency.
For the low-income families who receive child support, it makes
up more than a quarter of the family budget. Welfare reform has
made a dramatic difference in child support collections, as
well. The number of paternities that have been established or
acknowledged has reached almost 1.6 million. In fiscal year
2001, a record of nearly $19 billion in child support was
collected, serving an estimated 17.5 million child support
cases.
But as with other areas of welfare reform, more can and
more must be done. Our proposals are targeted to increase
collection to families by nearly $810 million over 5 years,
beginning in fiscal year 2005. And under a similar proposal to
increase support reaching families, States would be given the
option to adopt simplified distribution rules under which all
support collected would be sent to families that have
transitioned from welfare.
We will also seek to increase the amount of support
collected by adding to our existing cadre of enforcement tools.
We would expand our successful program for denying passports to
parents who owe $2,500 in past-due support, and we would ensure
that child support orders are fair to both the custodial parent
and family as well as the noncustodial parent by requiring the
States to review and adjust child support orders in TANF cases
every 3 years, reinstating a pre-welfare reform policy.
I can tell you from my experience as Governor of Wisconsin,
access to child care assistance can make a critical difference
in helping low-income families to find and be able to retain
jobs. Our proposal includes a total of $4.8 billion for the
Child Care and Development Fund. When combined with TANF and
other Federal funding sources, over $9 billion is available for
child care and related services for children.
Under the President's plan, States have significant
flexibility to decide how child care funds will be used and
what will be emphasized in achieving the overall goals of
improving access to care and the quality of care. Along with
State flexibility, parental choice is a key element of a
successful child care program. Families must be allowed to
choose the care that best meets their needs, whether with a
relative, a neighbor, child care center, faith-based program,
or after-school program.
Mr. Chairman, the proposals that I bring before you today
contain several essential principles and proposals that flow
from them. What binds them together is a desire to improve the
lives of the families protected by America's social service
net.
I look forward to working with you, Mr. Chairman, and the
Members of this Committee to that end. I would be happy to
answer any questions you have.
[The prepared statement of Secretary Thompson follows:]
Statement of the Hon. Tommy G. Thompson, Secretary, U.S. Department of
Health and Human Services
Mr. Chairman, Mr. Rangel, and Members of the Committee, I am
honored to appear before you today to discuss the next phase of welfare
reform. Together our work has had a profound impact on our nation's
most vulnerable families. We have exceeded the most optimistic
expectations by assisting millions of families in moving from
dependence on welfare to the independence of work; we have provided a
strong commitment to child care to ensure parents can go to work
without worrying about the safety and well-being of their children; and
we have succeeded in collecting record amounts of child support on
behalf of children with a parent absent from the home. I am confident
that together our work in reauthorizing the Temporary Assistance for
Needy Families (TANF) program and the Child Care and Development Block
Grant and Child Care Entitlement Programs, coupled with several
critical changes to Child Support Enforcement, will lead to even
greater achievements in the future.
President Bush has laid out a clear path for reviewing all of the
programs impacted by the historic, comprehensive Personal
Responsibility and Work Opportunity Reconciliation Act (PRWORA). The
President made a commitment to pursue four important goals to continue
transforming welfare in the lives of those that it helped: strengthen
work, promote strong families, give States more flexibility and show
compassion to those in need. These goals formed the guideposts in
shaping the Administration's proposals for TANF, child care and child
support.
When I appeared before this Committee last month to discuss the
Department's FY 2003 budget, I presented the Administration's framework
for building on our past successes for our nation's families. I would
like to spend my time today sharing more information with you on the
important progress we have made in strengthening families under these
three critical programs and highlighting the specific areas the
President has targeted for improvement. I will begin with TANF, the
cornerstone of our welfare reform efforts.
Temporary Assistance for Needy Families
As a former governor, I can tell you that the Temporary Assistance
for Needy Families program--or TANF--has been a remarkable example of a
successful Federal-State partnership. States were given tremendous
flexibility to reform their welfare programs and as a result, millions
of families have been able to end their dependency on welfare and
achieve self-sufficiency.
Since 1996, welfare dependence has plummeted. As of September 2001,
the number of families receiving assistance, which represents the
welfare caseload, was 2,103,000 and the number of individuals receiving
assistance was 5,343,000. This means the welfare caseload and the
number of individuals receiving cash assistance declined 52 percent and
56 percent, respectively, since the enactment of TANF. Between January
and September of last year national caseloads actually declined about
two percent, and while the July to September statistics indicate a
slight increase, the figures are still well below the previous year's
caseload levels. The general trend suggests the national caseloads are
not rising but, instead, have stabilized.
In New York City, where we are understandably most concerned about
job opportunities, the city achieved more than 53,000 job placements
for welfare recipients from September through December 2001. While the
number of TANF recipients increased briefly as a direct result of the
tragedy of September 11, by January there were about 18,000 fewer TANF
recipients on the rolls than there were in August. Indeed, in December
New York City had its lowest number of persons on welfare since 1965.
Some other positive outcomes we have seen since the law's passage
include:
LEmployment among single mothers has grown to
unprecedented levels.
LChild poverty rates are at their lowest level since 1979.
Overall child poverty rates declined from 20.5 percent in 1996 to 16.2
percent in 2000. The poverty rate among African American children
declined from 39.9 percent to 30.9 percent--the lowest level on record.
The poverty rate among Hispanic children declined from 40.3 percent to
28.0 percent--the largest four-year drop on record.
LThe rate of births to unwed mothers has stabilized.
But even with this notable progress, much remains to be done, and
States still face many challenges. Last year, my Department held eight
listening sessions throughout the country to discuss the TANF program
and understand the new challenges ahead. The States overwhelmingly
support this program. States, administrators, recipients, employers,
and advocates have provided valuable insight into how we could make the
program even more responsive to the needs of families, while keeping
the basic structure and purpose of the program.
The Administration's proposal to reauthorize TANF would build upon
our stunning success by:
Lstrengthening the Federal-State partnership;
Lasking States to help every family they serve achieve the
greatest degree of self-sufficiency possible through a creative mix of
work and additional constructive activities;
Lhelping States find effective ways to promote healthy
marriages and reduce out-of-wedlock childbearing;
Limproving the management and, therefore, the quality of
programs and services made available to families; and
Lallowing States to integrate the various welfare and
workforce assistance programs operating in their States.
I would like to offer some detail on each of these elements.
Strengthen the Federal-State Partnership
Our proposal seeks to strengthen the Federal-State partnership by
maintaining the Federal financial commitment to the program and by
making some key policy changes to increase State flexibility. We
provide $16.5 billion each year for block grants to States and Tribes
and an additional $319 million for annual Supplemental Grants to States
that have experienced high population growth and had historically low
funding levels. We will also reauthorize and improve the $2 billion
Contingency Fund. Authorization for both the Supplemental Grant program
and the Contingency Fund expired in 2001, but one year extensions for
both were recently enacted into law as part of the economic stimulus
package signed by President Bush this past Saturday. We continue the
current maintenance of effort (MOE) requirement to retain States'
contribution to assistance for children and families. Finally, we will
restore over five years the policy permitting the transfer of up to 10
percent of TANF funds to the Social Services Block Grant.
In addition to these basic funding provisions, we propose a number
of policy changes on the use of funds that will provide States
increased flexibility in managing their programs.
LWe ease limitations on services for the unemployed by
clarifying the definition of ``assistance'' so that rules tied to such
spending would not apply to child care and other non-cash support
services.
LWe allow States to designate ``rainy day funds'' and
clarify that such funds would be reserved by States for future TANF
use.
LFurther, we revise current restrictions on carried-over
funds by allowing such funds to be spent on any service or benefit that
achieves a TANF purpose.
Maximize Self-Sufficiency Through Work
The second element of our reauthorization proposal is to maximize
self-sufficiency through work. First and foremost, States would be
required to engage all TANF families with an adult in self-sufficiency
activities. States must approve activities as part of self-sufficiency
plans and regularly review case progress.
And in addition to the requirement for universal engagement, we
will increase the direct work requirement. In order for a case to be
counted as participating, our proposal requires a full 40 hours per
week participation in monitored, simulated work activities by welfare
recipients. Cases counted as participating would be required to average
at least 24 hours per week (of their total required 40 hours) in direct
work, including employment, on the job training, and/or supervised work
experience. States will have the flexibility to decide which activities
should make up the remaining 16 hours. These could include a variety of
services the States determine are needed by the family.
On a temporary basis, certain cases could be counted as
participating even if they did not average 24 hours per week in direct
work. These cases would still be fully participating--defined as 40
hours per week--but could be in work-related training, short term
substance abuse treatment, or rehabilitation for up to three months
within any 24-month period. When calculating participation rates States
will be allowed to exclude parents with children under 12 months of
age. As in current law, teen parents who are heads of households and
maintain satisfactory school attendance will be deemed as meeting all
participation requirements.
We will also gradually increase minimum participation rate
requirements. In FY 2003, at least 50 percent of all TANF cases headed
by a parent will be required to participate in combined work and other
activities designed to help them achieve self-sufficiency. This
percentage will increase five percent each year until reaching 70
percent in 2007. Calculation methods will be improved to recognize
practical challenges States face in keeping recipients involved and
participating in the program. There will be no separate standard for
work participation for two-parent cases.
The current penalty structure will apply when a State fails to meet
either, or both, of the universal engagement or participation rate
requirements. Potential penalties will be limited to a maximum of five
percent of a State's TANF grant, as under current law. States subject
to a penalty will have the opportunity to develop a corrective
compliance plan and no penalty will be assessed as long as they are
making progress toward meeting the requirements. The current caseload
reduction credit will be phased out so that States still receive full
credit against participation targets in the first year, 50 percent of
credit in the second year and no credit thereafter. The five-year
cumulative lifetime limit for TANF cash assistance will be retained.
States may also continue to exempt up to 20 percent of their cases from
this limit.
Finally, understanding the significant barriers that tribes face to
self-sufficiency, HHS will undertake a major new technical assistance
effort for tribal organizations to help them build and administer
effective Tribal TANF programs.
Promote Child Well-Being and Healthy Marriages
Our proposal embraces the needs of families by promoting child
well-being and healthy marriages. To this end, we establish improving
the well-being of children as the overarching purpose of TANF. This
meaningful change recognizes that the four current goals of TANF are
important strategies for achieving this purpose. Similarly, we clarify
and underscore that the fourth goal of TANF is to encourage the
formation and maintenance of healthy, two-parent, married families and
responsible fatherhood.
In addition, we will target $100 million from the discontinued
Illegitimacy Reduction Bonus for broad research, evaluation,
demonstration and technical assistance, focused primarily on healthy
marriage and family formation activities. Funds previously used for the
Illegitimacy Reduction Bonus could be spent far more effectively on
developing innovative approaches to support family formation and
healthy marriages. Strong and stable families are good for children and
must be a central goal of our next steps in welfare reform.
Research shows that both adults and children are better off in two-
parent families. It is no criticism of single parents to acknowledge
the better outcomes for children of married-couple families. Rather it
supports the underlying principles to redirect our policies to
encourage healthy marriage especially when children are involved. Our
approach to promoting healthy marriage is to provide financial
incentives for States, often working together with private and faith-
based organizations, to develop and implement innovative programs to
support family formation and healthy marriages. Those demonstration
programs will be carefully evaluated and information about successful
programs will be broadly disseminated.
Along those lines, we also redirect $100 million from the current-
law High Performance Bonus to establish a competitive matching grant
program for States and Tribes to develop innovative approaches to
promoting healthy marriages and reducing out-of-wedlock births. State
expenditures will be matched dollar for dollar and TANF funds may be
used by States to meet their matching requirement.
We require States to discuss in their State plans the efforts they
will make to accomplish the family formation goals of the TANF program,
including the promotion of healthy marriages, and their efforts to
provide equitable treatment for two-parent married families.
And finally within the context of our goals to strengthen family
formation and reduce illegitimacy, we will reauthorize the Abstinence
Education grant program to States and territories at $50 million per
year.
Improve Program Performance
Our fourth reauthorization element focuses on improving program
performance. We will replace the current High Performance Bonus with a
$100 million Bonus to Reward Employment Achievement for meeting the
employment goals of TANF. We also will require States to establish and
report on performance goals related to each of the four major goals of
TANF and to describe in their State plans how they are addressing each.
Likewise, States will be required to describe particular strategies and
programs they are employing to address critical TANF challenges. We
will research the best ways to construct performance measures that
relate to the TANF goals, collaborate with States to identify key
performance measures, and build uniform data support and reporting
methodologies.
Program Integration
For any organization to succeed, it must never stop asking how it
can do things better. Using the flexibility under programs such as TANF
and the One-Stop Career Center system, States have made great strides
towards transforming and integrating their public assistance programs
into innovative and comprehensive workforce assistance programs. But,
with greater flexibility even more can be accomplished. The final key
element of our TANF proposal seeks to enable far broader State welfare
and workforce program integration.
In our proposal, we establish new State program integration waivers
to permit States to further integrate welfare and workforce development
programs in order to improve the effectiveness of these programs. Broad
flexibility to design new strategies and approaches will be provided.
The proposed waivers could apply to all aspects of selected Federal
programs, including funding and program eligibility and reporting
rules, enabling States to design fully integrated welfare and workforce
development systems that could revolutionize service delivery.
I would like to turn now to another program that offers a vital
connection to a family's ability to achieve self-sufficiency: child
support enforcement.
Child Support Enforcement
Child support is a critical component of Federal and State efforts
to promote family self-sufficiency. For the low-income families who
receive child support, it makes up a significant portion of the family
budget (26 percent).
PRWORA instituted a number of important child support enforcement
measures. Tools such as increased automation, the National Directory of
New Hires and Federal Case Registry, the passport denial program, the
financial institution data match, and license revocation have made a
tremendous difference in improving State performance and strengthening
child support collection efforts. Equally important, PRWORA streamlined
paternity establishment, particularly voluntary paternity
establishment, to encourage fathers to take the first step toward
providing their children with financial and emotional support. The
impact of these changes has been dramatic. The number of paternities
established or acknowledged has reached almost 1.6 million. Of these,
nearly 700,000 paternities were established through in-hospital
acknowledgement programs. In FY 2001, with a caseload of 17.4 million
cases, a record of nearly $19 billion in child support was collected.
Like TANF, our proposals for child support enforcement build on our
success under PRWORA. These proposals will increase child support
collections and direct more of the support collected to families,
moving the child support program toward a focus on families and away
from the historic purpose of recoupment of Federal and State outlays.
Directing More Support to Families
Under current law, States and the Federal Government can keep some
of the child support collected on behalf of current or former TANF
recipients to defray costs of welfare. We are proposing to change that
law and give States an incentive to give more of the child support
directly to the family. Families and children will benefit financially
and, equally important, the children will see that their parents
support and care for them.
Today, more families receiving assistance are working and the
assistance they receive is more temporary. The Wisconsin W-2 waiver
demonstration has shown that when TANF families receive the child
support paid on their behalf, fathers are more likely to pay child
support and to pay more child support.
Currently, half the States pass through a portion of child support
collections to TANF families, entirely out of State funds. Under our
proposal, the Federal Government would share in the cost of amounts
above a State's current passthrough up to the greater of $100 per month
or $50 over current State efforts. Federal contributions to passthrough
of collections to TANF families will provide a strong incentive to
States to begin to pass through additional support to these families,
or increase the amount of the current passthrough. Effective October 1,
2004, this proposal would increase collections going to families by
$280 million over five years.
Under a similar proposal to increase support reaching families,
States would be given the option to adopt simplified distribution rules
under which all support collected would be sent to families that have
transitioned from welfare. This proposal would increase collections
going to families by $810 million over five years and eliminate the
need for States to explain and support complex distribution decisions.
This provision would also be effective October 1, 2004.
Increasing the Amount of Child Support Collected
The second prong of our strategy for child support enforcement is
to increase the amount of support collected by adding to our existing
cadre of enforcement tools.
First, we would expand our successful program for denying passports
to parents owing $2,500 in past-due support. The passport denial
program, run jointly by HHS and the Department of State, currently
works to deny passports to delinquent parents owing more than $5,000 in
past due support. In FY 2000 alone, individuals with child support
arrearages paid $3.6 million in lump sum child support payments to
avoid losing their passports. An additional number of these individuals
have entered into payment agreements under which support payments are
made regularly to children. Currently, passports are being denied to 60
delinquent parents per day.
We know of many examples of payments by parents who could pay but
don't until threatened with the loss of their passport. One parent who
had never made a voluntary payment paid $67,000 in order to travel for
work. Another parent paid over $10,000 to obtain his passport to go to
a family reunion. And a parent in New York paid his account in full--
$27,328--in order to go on a vacation. Under our proposal,
approximately one million cases could be added to the passport denial
program.
We also are proposing to expand the Federal administrative offset
program by allowing certain Social Security benefits to be offset to
collect unpaid child support in appropriate cases selected by the
States. Currently under the Federal Debt Collection Act, Old Age,
Survivors and Disability (Social Security) benefits can only be offset
for Federal debt recovery. Our proposal would provide a limited
expansion to include child support debts and would be subject to the
same offset thresholds, or safeguards, as current law.
Our final enforcement proposal would ensure that child support
orders are fair to both custodial parents and children as well as the
noncustodial parents by requiring States to review and adjust child
support orders in TANF cases every three years, reinstating a pre-
PRWORA policy.
Typically, the ability of obligors to pay child support increases
over time. Periodically reviewing and adjusting child support awards to
reflect current income can result in increases in the amount of the
support provided and the economic security of single parent families.
The five-year limit on receipt of TANF creates a substantially
different environment than that which existed prior to PRWORA. At least
one review of a support order during a family's receipt of TANF will
help ensure that families leave the welfare rolls knowing that they
will continue to receive child support at an appropriate level.
There also are legitimate reasons to reduce an existing award, for
instance, if the obligor has lost his job or suffered a major decline
in income. In those cases, periodic review and adjustment means that
the award amount is fair and that the child support agency is assisting
a low-income father who does not have the current ability to pay
support, by helping the father avoid building up a large and
unmanageable arrearage.
Processing Fee
In addition to our proposals for increasing support and directing
more of the support collected to families, we will require States to
impose a $25 annual processing fee on families that have never used
public assistance in cases where the State has been successful in
collecting support on their behalf. Because the fee is collected only
when the State is successful in collecting support and represents a
fraction of the cost of the services families receive, we are confident
it will not pose a barrier to families seeking child support
enforcement services.
As States and the Federal Government struggle to serve all the
needs of its citizens, it is imperative that we find innovative ways to
finance the program. This minimal step toward contributing to the costs
of the program is reasonable and represents a firm step toward changing
the perception that the purpose of the child support program is to
recoup welfare benefits, building on the positive message of our child
support distribution proposals. While it will raise expectations of
customer service, I am confident that these expectations will be met.
I would like to turn now to child care, a key support service.
Child Care
In 1999, 20 million families in the United States had one or more
children under the age of 13 with an employed mother. Thirty-two
percent of these families were low-income. For a number of reasons,
including the high cost of child care, many of these families have
difficulty finding care arrangements that they can afford. I can tell
you from my experience as Governor of Wisconsin, access to child care
assistance can make a critical difference in helping low income
families find and retain jobs.
Further, studies measuring the impact of child care subsidies on
employment in several communities and States across the country show
that receipt of subsidies substantially increases the likelihood of
employment. Eighty-three percent of all families who received child
care subsidies in 1999 did so because the parents were employed (with
most of the other parents receiving subsidies while in training or
education).
As we approach reauthorization of our child care authorities, the
Administration is committed to preserving the key aspects of the
program: parental choice; administrative flexibility for States and
Tribes; support for work and job training; inclusion of faith-based and
community-based organizations; and healthy development and literacy
skills for children in care. The major restructuring of the federally
funded child care programs under PRWORA remains an effective and
efficient method for distributing child care funds to States. States
were given flexibility to determine the best use of those funds to meet
the varying needs of their low-income populations. Therefore, our
proposed reauthorization of the discretionary Child Care and
Development Block Grant (CCDBG) and mandatory Child Care Entitlement
programs, does not seek any changes to the underlying structure and
financing of these essential programs. Rather, we enthusiastically
support maintaining the historically high level of funding for child
care.
Our proposal includes $2.1 billion for the Child Care and
Development Block Grant and $2.7 billion for Child Care Entitlement--a
total of $4.8 billion for what is referred to as the Child Care and
Development Fund or CCDF. When combined with TANF and other Federal
funding sources, over $17 billion is available for child care and
related services for children.
Under our proposal, States continue to have flexibility to use
Temporary Assistance for Needy Families (TANF) funds for child care
both by transferring up to 30 percent of TANF funds to CCDF and by
spending additional TANF money directly for child care. In recent
years, States have used significant amounts of TANF funds for child
care, including $2.3 billion for transfers to CCDF and $1.4 billion in
direct spending in FY 2000. In addition to CCDF and TANF, other
programs in my Department also fund early childhood care and education,
including the Social Services Block Grant and Head Start. And the
Administration's education bill, recently passed by the Congress and
signed by President Bush, includes additional flexibility and funding
for school age care and literacy programs. Taken together, all of these
funding opportunities have substantially increased the amount of
resources available for quality child care and related programs.
Funding available through our child care programs and TANF
transfers alone will provide child care assistance to an estimated 2.2
million children in FY 2003. This is a significant increase over the
number served just a few years ago; in 1998 about 1.5 million children
received subsidized care.
The overall goal of TANF reauthorization is child well-being. Child
care supports this goal as well as being a vital work support. Our
child care reauthorization proposals complement our expectation that
all families will be fully engaged in work and other meaningful
activities by ensuring that resources are available to support safe,
affordable child care when necessary.
Promoting Child Development and Literacy through Child Care
In addition to supporting working parents, quality child care
promotes early childhood development and literacy skills. To improve
quality and support the child development component of child care,
States support a range of strategies and the Department manages a broad
portfolio of training and technical assistance activities to support
their efforts. According to the latest plans submitted by States, the
most common approaches include grants and loans to providers for
specific quality improvements, training and technical assistance for
providers and staff, monitoring of compliance with regulatory
requirements, strategies to improve retention and compensation of child
care providers, and a special focus on improving the quality of care
for infants and toddlers.
The President's budget maintains funding for quality child care. A
minimum of four percent of the CCDF must be spent on activities to
promote quality. In addition, the budget proposes to retain set-asides
for infant and toddler care, school-age care and resource and referral
services, additional quality expenditures, and ongoing research to
identify and promote effective child care practices. My Department is
providing technical assistance to equip States to make the best use of
their quality funds, including activities that promote literacy. At the
same time, we are promoting systemic partnerships between child care,
Head Start, family literacy, and other school readiness and reading
programs.
State Flexibility
States have significant flexibility to decide how child care funds
will be used and what will be emphasized in achieving the overall goals
of improving access to care and the quality of care. For example,
within basic Federal requirements, States determine eligibility
criteria and co-payments for families as well as provider reimbursement
rates.
The Department convenes State child care officials and other
experts to assess needs within the child care system and to plan
remedies where they are needed and improvements where they are
possible. Further, to add to this dialog, this year we are funding the
first federally sponsored child care policy demonstrations that will be
rigorously evaluated.
Promoting Parental Choice
Along with State flexibility, parental choice is a key element of a
successful child care program. Families must be allowed to choose the
care that best meets their needs, whether with a relative, neighbor,
child care center, faith-based program, or after-school program. In FY
2000, over 78 percent of CCDF subsidy payments were made using
certificates or vouchers. Using these vouchers and other child care
payments, 56 percent of children were cared for in a child care center,
while 31 percent were in family child care homes, four percent were in
group homes, and nine percent were in the child's home.
To help parents make these critical child care decisions, CCDF
funds parent education and outreach. Nationally, my Department funds
the Child Care Aware web-site and toll-free hotline to link parents to
information about child care in their local communities.
We are on the right track with CCDF and we must maintain a high
level of Federal funding commitment to ensure our child care resources
continue to meet the needs of working families.
Conclusion
Mr. Chairman, the proposal I bring before you today contains many
different elements. What binds these fundamental elements together is
the desire to improve the lives of the people and families protected by
America's social safety net. As noted by the President, ``We've made
progress, there's no question the doors of opportunity that were shut
and sealed have now been opened. . . . Yet there is no acceptable level
of despair and hopelessness in America. We will not leave people in
need to their own struggle, and we will not leave them to their own
fate.'' The President has publicly stated his commitment to the next
phase of welfare reform; and this committee demonstrated its desire to
succeed when you made the hard choices on the original precedent-
setting PRWORA legislation and in your on-going interest in the impact
of these changes. It is time to take the next steps in welfare reform
and the President and I stand ready to work with you to achieve even
greater successes for America's neediest families.
I would be happy to answer any questions you have.
Mr. Herger. [Presiding.] Thank you very much, Mr.
Secretary. Now we will turn to questions, and first, the
gentleman from Illinois, Mr. Crane, to inquire.
Mr. Crane. Thank you, Mr. Chairman.
Mr. Secretary, thank you for coming to testify before us
today. It is appropriate that you are here on behalf of the
Administration since many of the tremendously successful TANF
programs and reforms that we enacted in 1996 are directly
attributable to you and your hard work and vision. You are
truly a pioneer in this field and I would like to thank you for
that.
Mr. Thompson. Thank you.
Mr. Crane. My question to you is this. Do you envision a
time in the future when we will be able to begin reducing the
amount of money we send to the States? In other words, do you
anticipate that we will reach a point in time when, given our
successes in reforming the program, we will be able to keep the
program strong and yet reduce the block grant by a substantial
amount instead of level-funding it?
Mr. Thompson. Congressman, I believe it is very necessary
for us to continue the level funding for the next 5 years. I am
hopeful that at the end of this 5 years we will be able to use
this money for increased child care, education programs, job
training programs, and the like. I do not know if you will ever
see a reduction in the amount of money. I do not think it will
be going into cash assistance. It will be going to help low-
income parents with children improve their quality of life,
Congressman.
Mr. Crane. Thank you.
Mr. Herger. Thank you. Now, the gentleman from New York,
the Ranking Member, Mr. Rangel, to inquire.
Mr. Rangel. Thank you, Mr. Chairman. First, let me
apologize. I am sorry that my Chairman had something more
important to do than to listen to your testimony this morning,
but he is a very busy man.
Two questions I had and referred to earlier. As a Governor,
you always promoted giving maximum flexibility to the
Governors'. It seemed like this time, you are increasing the
requirements for work and not increasing the funds for child
care. It seemed like if we are satisfied that the program has
worked, why would you want to mandate that Governors' do what
you had always thought that Governors, that one size does not
fit all?
Mr. Thompson. Congressman, when I was debating with you
many times on this subject and when I was debating Congress on
this particular subject, I said, set the standards high, set
the principles high, but allow us, as Governors, the
flexibility to work out the details. I believe that is what
this program is all about. We are saying, develop a case file
on each individual. Be able to monitor that individual or
individuals and see how that person is doing.
You can have all the flexibility in how you set that
program up at the State level. We also are doing another thing
to give States tremendous flexibility and that is the caseload
reduction credit that was in 1996 TANF law that would be
carried over for the first year at 100 percent and in the
second year at 50 percent. So a lot of States will not have
very much heavy lifting to do in order to meet the requirements
of this particular law. Most States, like New York and
Wisconsin, will not have any requirements, because they have
reduced their caseloads by at least 50 percent. Therefore, they
will have complete flexibility to set up the program and will
not have any further requirements under this particular
proposal.
Mr. Rangel. Why is it that you believe that the States
should not give assistance to people who come into this country
legally and are pursuing their dreams here? As a former
Governor, why would you think that we would--it is not a
question of additional money--that we would restrict Governors
from doing what they would think is in the best interests of
the people in their State?
Mr. Thompson. Because under the immigration law, as you
fully know, there was a decision made by this Congress that any
legal immigrant coming into this country had to have a sponsor
that would take care of that individual for 5 years. The
Administration felt that that principle should be upheld in
TANF, and, therefore, for 5 years, that individual should not
be eligible for TANF. If that person needs assistance, he or
she should have his or her sponsor take care of the person,
because that was the contractual relationship under which the
individual came into this country.
Mr. Rangel. With your permission, Mr. Chairman, I yield the
balance of my time to Mr. Cardin.
Mr. Cardin. Thank you, Mr. Rangel.
Let me follow through in the time that remains on the
flexibility issue. I very much appreciate your leadership in
Wisconsin and your leadership in the Administration to get the
States the power and the discretion they need in order to get
the job done.
Let me talk about education for a moment.
Mr. Thompson. Sure.
Mr. Cardin. I agree with you, we have got to strengthen the
work requirement from the 1996 Act because the credit for
caseload reduction really makes the work requirement
nonexistent, and as you know, the legislation that I filed on
behalf of the Democrats includes a change there.
But if a State determines that an individual needs 40 hours
or 30 hours of vocational education for 5 weeks or 8 weeks or
26 weeks, if I understand the Administration's proposal, that
would not count under the work participation rules because of
the requirement to work 24 hours before you can get into the 16
hours of vocational education. That might be all right for many
of the people in the program, but maybe others, it does not
work. Is that not just reducing the discretion of a State to
try to get people off of welfare?
Mr. Thompson. I think you are reading the Administration
policy wrong, Congressman. First off, I want to thank you for
your bipartisan support and your willingness to work with me
and willingness to discuss this, as we have on several
occasions already.
But the Administration's proposal, allow under that case
that you just enunciated, allows an individual to have 3 months
before he or she started working to make sure that he or she
got the necessary extra training or education. That person
would qualify under the job training requirements set forth in
the Administration's policy.
And then after that, he or she would have to go to work for
at least 24 hours each week. He could work Monday, Wednesday,
and Friday, and then on Tuesday and Thursday go to school, or
work Monday, Tuesday, and Wednesday, and could go to school on
Thursday and Friday.
Mr. Cardin. But that is more restrictive than the current
rule.
Mr. Thompson. It is more restrictive in this regard. Under
the current law, it is 20/10. This one goes to 24 and 16, and
it is more restrictive in that we require every State to
monitor each case. But we give the States complete flexibility
in how they meet those requirements. They have complete
flexibility in how to set up that monitoring. They have
complete flexibility on how they can set up the work and the
education and the training set forth in the proposal if it is
passed.
Mr. Cardin. So under current law, vocational education can
count toward the first 20 hours, and under your proposal, it can
not?
Mr. Thompson. That is correct.
Mr. Cardin. Thank you.
Mr. Herger. The gentleman's time is expired. Next, the
gentleman from Florida, Mr. Shaw, to inquire.
Mr. Shaw. I thank the Chairman for yielding to me. I cannot
help but notice, Mr. Secretary, behind you are sitting a couple
of great heroes of welfare reform, Wade Horn, who is just
absolutely incredible on recognizing and assisting in putting
into legislation the importance of a family and particularly of
the father being a member of that family; Andy Bush, who you
stole from my staff when we were struggling to put together a
welfare reform bill--of course, I understand New York stole him
from you, so that is the way it happens when you hire good
people; Matt Weidinger, who is behind me and who was working
under Ron Haskins, who is now at the White House.
I want to congratulate you. I was just sitting here
listening to you testify as to the success of this bill and
where we are going to go as to the next stage of welfare
reform. It is interesting to note that we turned this from Aid
to Families with Dependent Children into TANF, which says
Temporary Aid to Needy Families, which is a very important
distinction which has taken millions and millions of people out
of welfare and let them take control of their families.
Mrs. Thurman and I were down in Tallahassee yesterday and
the two of us were part of a panel which was reviewing welfare
reform and how it affected in Florida. Florida has had some
tremendous success, as has Wisconsin, having reduced their
caseload by 83 percent, an incredible, incredible feat, and I
know that your story in Wisconsin is over 80 percent and also
you have told me about various counties in Wisconsin where
there is no welfare anymore as there is no need for it. I think
this is just a remarkable transformation that we have brought
this country through.
But it is important, as you realize and as the President
realizes in the legislation that you were reviewing with us, it
is tremendously important that we recognize that now we are
down to the hardcore unemployed and we cannot give up on them
and we have to maintain these programs.
But what it has done to the children of this country and
what it has done in giving the mothers, particularly, self-
respect and becoming role models for their kids is just an
incredible transformation and it shows that if you have high
expectations and you believe in the human spirit, you can work
people out of welfare. Welfare was a barrier to the family.
Now, it is encouraging people to get together and make
something of themselves, and it is just a wonderful, wonderful
program.
I congratulate you. I reviewed the bill that we are going
to be determining. I imagine Mr. Herger will be filing shortly,
if he has not already filed it. I have also taken a close look
at Mr. Cardin's bill, and I think that unlike the confrontation
that we had years ago, that we will be working together this
time and I think that really shows the success of this Congress
when we do things right, and also when we quit micro-managing
things and do give the States flexibility.
I think that is tremendously important because they can
work wonders. They sit there and they work with the people who
are actually making the day-to-day decisions, the people that
we have, such as Judge Carney, which is one down in Tallahassee
who has testified before several of our committees of Congress
in showing the success that we have and the quality of people
that we have at the State level as well as the Federal level to
administer their programs.
My hat is off to you. I know when we were writing this
thing, in the final days, I would be running in the back room
answering telephone calls from you, continuing to put your
input in right until the very last moment. Those are great
memories and I think that was a great moment for this Congress.
Mr. Thompson. Thank you so very much, Congressman, and I
would just like to return the compliments to you. It would not
have happened without you. You took a chance and I salute you
for taking that chance and for leading the effort. I remember
those days well and I look back on those days as some of the
fondest memories I have of public policy and what we are able
to accomplish together and I thank you for it.
I did recognize that you had some great staff. That is why
I tried to hire them away from you, and I am glad you
recognized both Dr. Horn and Andy Bush, and I thank you so very
much for your support, friend.
Mr. Shaw. Thank you, Mr. Secretary.
Mr. Herger. Thank you. I thank the gentleman from Florida,
again, the former Chairman of the Human Resources Committee
during the time that this historic welfare reform, TANF, was
written back in 1996. Thank you very much for all your work and
continued work, Mr. Shaw.
Now to inquire, the gentleman from California, Mr. Stark.
Mr. Stark. Thank you, Mr. Chairman.
Mr. Secretary, I just cannot thank you enough for the
walleye pike, but that is a little inside Wisconsin story, but
I hope it presages the idea. I was told by friends who have not
heard this that these walleye pike really did not come from
Wisconsin, where both the Governor and I come from, but they
came from Canada. Now, Governor----
Mr. Thompson. You are not supposed to say that.
Mr. Stark. We can make a deal. If we could bring our health
care plan down from Canada along with those walleye pike, we
would really make some progress around here.
[Laughter.]
Mr. Stark. I think maybe there is something to be said for
that, Governor.
I wanted to talk just for a minute, and you can help me,
there are two issues. I tried to get a poverty bonus in this
bill, and I thus far have not been successful, not money for
poverty reduction but some kind of a reward to States that not
only put people to work, but then we would begin to measure how
much they advance. I will recall a little bit of your testimony
when you were confirmed that you said, we have a duty to those
families who have successfully moved into the workforce. We
must do everything in our power to help them to continue to
move up the ladder of economic success.
Having said that, then I introduced you to some students
here from Minnesota who were here with Senator Durenberger,
with whom many of us on this Committee used to work on issues
of health and welfare, and he brought his graduate students
here. It is interesting to note that, and my notes say
``academic research.'' Governor, do not ask me where it came
from. But tell me if it makes sense to you. It says, ``academic
research clearly indicates''--that even makes it more
questionable----
[Laughter.]
Mr. Stark. That poverty is the strongest cause of problems
with our children, including both school performance, child
abuse, juvenile crime, teenage smoking, this research points at
poverty. I note Wade Horn nodding his head. It does not say
anything about marriage in there, Wade, but it does say
poverty. But it also says that the higher out of the poverty
level you are, the better marriage candidate it makes you, so
maybe there is something in here for everybody.
In Minnesota, they call it the Family Investment Program
and it allows, under their program, recipients to keep more of
their TANF check while earning income through work. They have
shown that raising the income of their caseload leads to better
child well-being outcomes, increased employment and increased
earnings and an increased marriage rate among the welfare
recipients.
Now, I guess, and there is only $532 for a family of three
welfare benefit in Minnesota, so they are not laying a lot of
money extra, but on the margins, as our Chairman spoke, a
couple hundred dollars a month in a family of three can make a
lot of difference, whether it is extra books for kids or
whether it is a babysitter occasionally so the other child can
take in a cultural event.
I just wonder if we could work together--I will let Mr.
Cardin beat up on you for more money in the aggregate----
Mr. Thompson. Okay.
Mr. Stark. But you are going to increase $200 million to
promote marriage. Could we take half of that and promote
poverty reduction? It is not much, but if we offered some
prizes and allowed some flexibility, I just want to see if it
works. I mean, if it does not, we have got a couple years here
to find out, see what the States come up with. They may not all
do as well as Minnesota did or as Wisconsin would do, I know,
but I think it would be a noble experiment.
The evidence, and I get the same evidence you do. I do not
think the researchers are cooking the books here. This was not
done by Arthur Andersen.
[Laughter.]
Mr. Stark. I would like to see if we could try, because to
me, in many cases what I am hearing, moving off welfare into a
minimum wage job really decreases the aggregate resources of
the family unit because they maybe will not get health care or
they will not get child care, and if we could find ways to
offset that, I think we would be doing a service.
Mr. Thompson. Congressman, first of all, let me tell you
that those walleyes were raised in Wisconsin. They just swam up
to Canada where they would be packaged. I just want you to know
that.
[Laughter.]
Mr. Thompson. I also want to point out that I want to work
with you, and I love new ideas, as you do. I think that there
may be something besides just poverty we should be addressing.
I am working with Senators Carper and Bayh on some ideas in
regards to employment and how we might be able to develop a
credit for hiring individuals at a higher rate and giving them
a credit. We are working on that.
But I would like to work with you, Congressman, in regards
to the poverty question, but I think it should be broader than
just poverty. It should be education, it should be absenteeism,
and so on and so forth, and I think we----
Mr. Stark. Day care.
Mr. Thompson. I think we could develop something. We will
have to find some way in which we will be able to fund it. I do
not want to take it out of the $200 million, but I am sure that
there are some ways that we might be able to come up with a
demonstration program that you would like and that I would
like.
Mr. Herger. The gentleman's time has expired. Thank you
very much. Next, the gentleman from New York, Mr. Houghton, to
inquire.
Mr. Houghton. Thank you very much, Mr. Chairman. Before I
inquire, I would like to yield to Mr. Shaw.
Mr. Shaw. I thank the gentleman for yielding to me. When I
was noticing the people sitting behind you, Mr. Secretary, I
failed to notice one of my own from Florida, Don Winstead, who
served as the Secretary of Welfare under two Governors,
Governor Chiles and Governor Bush, and did a good job and was a
great resource also. Thank you. I thank the gentleman for
yielding.
Mr. Thompson. He is great. I have got a great team,
Congressman.
Mr. Houghton. Thanks very much, Mr. Secretary, for being
here and for the great work you have done. I also thank you,
Mr. Shaw, for your leadership here.
I would just like to ask you a specific question that is
related to my State of New York. Under the current law, States
are required to have 50 percent of their TANF families engaged
in work-related activities. However, the current law also
provides States with a caseload reduction credit that can be
used to meet this participation requirement. The Administration
is proposing to gradually increase the work requirement from 50
to 70 percent, as you mentioned.
In the case of my State, New York, it exceeds its ``all
family'' Federal work participation rate requirement by almost
six times, but its participation rate is not at 50 percent
because of the caseload reduction.
Mr. Thompson. That is correct.
Mr. Houghton. And that is a problem, and maybe you could
walk me through that arithmetic a little bit.
Mr. Thompson. That is why we are changing it, Congressman,
because under TANF 1, we wrote into the law a provision that
for every percent of reduction in the number of cases, the work
participation would go down by a like amount. Most States have
reduced their caseloads to such a degree that most States are
in the 5 to 10 percent level instead of the 50 percent which
Congress set out. So we are going back to the 50 percent, and
increasing the participation from 50 percent by 5 percentage
points each year up to 70 percent.
But in order to allow the States extreme flexibility, we
are carrying over that work participation credit, that caseload
reduction credit--100 percent the first year and 50 percent the
second year. So New York, which has reduced its caseload by
over 50 percent, will have a full year in which to phase in to
the 55 percent. So New York will still have to develop a case
file on each case, but they have already met the work
participation for the first year.
Mr. Houghton. Good. Thanks. That helps very much. I yield.
Mr. Herger. I thank the gentleman from New York. Now, the
gentleman from Michigan, Mr. Levin, to inquire.
Mr. Levin. Welcome. I just wanted to probe what Mr.
Houghton has raised, but I want to say something first about
the spirit here. I hope we can work together.
The fight in 1995 and 1996 was not mainly over work as the
core of welfare reform. That had a clear majority going in and
had been proposed by the President. We argued over mainly day
care and health care and the major reductions for legal
immigrants, much of the money coming from Supplemental Security
Income and food stamps. Eventually, day care and child care and
health care were adequately funded and the clear majority of us
voted for it. Those were the arguments within the Conference
Committee and they became rather intense, but it was always
within the ambit of work as the core of welfare reform.
So within that spirit, and by the way, Mr. Herger, I want
to say to you--Mr. Rangel was not here when the Chairman
spoke--you were said today to have said this. He hoped that a
bill would get bipartisan support, but Republicans would not
sit down with Democrats to write the legislation. If the
Administration is working----
Mr. Herger. Excuse me. I do not recall making that comment.
Certainly, we are trying to work with the Democrats.
Mr. Levin. Well, I think----
Mr. Herger. Sometimes we are not understood when we are
quoted, but certainly it is my desire to work with everyone on
the Committee, as I have been with Mr. Cardin, the Ranking
Member, and with anyone who wants to work on this.
Mr. Levin. I hope that does not take from my time, because
that is what was said here, and I am glad it was a misquote.
I want to talk to you about the work participation because
I do not understand what you are aiming for. Let us say there
are 10,000 people on TANF in a State. One State moves 7,000 of
the people off of welfare into work and another State--that is
into the private sector--moves 70 percent into a workfare
program where people do not receive cash assistance. Now, under
what you have written here, the State that moves 70 percent off
of welfare into work, they get a very partial credit for that,
while the State that moves 70 percent, they are still on TANF
in a way but they are in a workfare program, and because of
that, they get full credit.
I do not understand that. Why should a State that moves 70
percent of people off of welfare into work get a very partial
credit toward work participation while the State that has 70
percent on a workfare program meets the work participation
requirement?
Mr. Thompson. Congressman, there is also a provision in
there that when a person goes off of TANF, they still count
toward the work participation rate for up to 3 months after
that individual has left TANF.
Mr. Levin. But that is for 3 months.
Mr. Thompson. Yes.
Mr. Levin. We are talking about a multi-year program.
Mr. Thompson. That is correct.
Mr. Levin. I do not understand that. I thought--and this is
a friendly question, I want you to think about this, because I
think our aim is not to keep people on TANF----
Mr. Thompson. That is true.
Mr. Levin. Working, but to get them off of TANF working and
ultimately into a job that is productive enough so they are out
of poverty. Is not the latter what our aim is?
Mr. Thompson. Absolutely, Congressman.
Mr. Levin. Then I think you need to take another look at
the work participation. I will give you another example. If
people are working in a lot of States 30 hours and then doing
something else for the 10 hours so they meet 40, in a lot of
States, they are, as a result, not eligible for cash
assistance, so they are off of TANF. They would give that State
only a partial credit for the people who are working 30 hours
plus 10. What sense does that make?
You said you were talking to the Senate about an employment
credit. In the bill that Mr. Cardin and a number of us have put
together with enough care so I think the Chairman should sit
down and talk with us, we have an employment credit there.
There is no employment credit in this bill. So what sense does
it make to say in a lot of these States where people are no
longer eligible for cash assistance if they get a minimum wage
job that 30 plus 10 and the State gets essentially a quarter of
a credit for that person? Tell me what sense that makes.
Mr. Thompson. Congressman, it makes a lot of sense trying
to move people, as you said in the beginning, off of TANF into
work, and we think any kind of work experience is good. We
think even the 30 hours is very good and they still are going
to get partial credit.
Mr. Levin. Why not full credit?
Mr. Thompson. We are striving to get every State to set up
a program for each individual so that they can have a case file
and every individual would have 40 hours outlined on how they
are going to achieve that requirement, 24 hours of work and 16
hours of other TANF-related activities.
Mr. Levin. I will finish, because the red light is long.
You took 30 seconds, let me take----
Mr. Herger. It is a minute and 30 over now.
Mr. Levin. Look, every State--there should be a case file.
You can have that requirement without the 24/16 or giving a
quarter of a credit if they are in the private sector while you
give a full credit if they are in workfare. The individual file
requirement has nothing to do, if I might say so, with that
dilemma.
Mr. Thompson. I will----
Mr. Levin. And also, if they work 20 hours, and I tried to
figure this out under your plan, and 20 hours of something
else, which is true in a lot of States, you essentially say to
that State, they get zero credit for participation. You say----
Mr. Herger. If the gentleman----
Mr. Levin. You want flexibility, but what is flexible about
saying to a State, if it is 20 hours of work and 20 hours of
vocational education after 3 months, you get zero credit for
work participation? How is that flexible?
Mr. Thompson. We think there is plenty of flexibility in
there for the States to set it up, Congressman, and I will be
more than happy to sit down with you and go into it in depth
and also to work with you on your employment credit.
Mr. Levin. Okay.
Mr. Thompson. I think that is what you are asking for, and
I am offering to help.
Mr. Herger. Thank you very much. Time has expired, and the
gentleman has 2 minutes and 53 seconds, so we did go a little
extra, but it was a good question, and I appreciate the
response.
Now, the gentleman from Louisiana, a Member of the
Subcommittee, Mr. McCrery, to inquire.
Mr. McCrery. Thank you, Mr. Chairman, and welcome, Mr.
Secretary.
Mr. Secretary, your having been the Governor of a State
which was a leader in welfare reform in the country makes you
particularly well suited to lead the Administration's effort to
reauthorize welfare reform.
Mr. Thompson. Thank you.
Mr. McCrery. It is because of that experience that I am
going to ask you this question, and I apologize ahead of time
for throwing you a curve here. It may not be a question which
you have thought much about but which could come into play in
the legislative process.
My question is, as a former Governor of a State that dealt
with welfare, kind of on the vanguard of welfare reform, how
important do you think it is that Congress have this year a
long-term reauthorization of this program as opposed to maybe a
6-month or 1-year reauthorization?
Mr. Thompson. I think it is very important, and I will tell
you why. When we adopted TANF 1 for 5 years, we also had a
provision in there that each year, the money could be sent back
to the Treasury. So it sort of forced the States to make some
bad decisions because the money was appropriated out on a year-
by-year basis and it was not obligated to the States, and if
the States did not use it, then the Federal Government had a
right to come back and reclaim that money or not send the money
out. So as a result of that, some States that were aggressive,
including Wisconsin, had to make some very aggressive decisions
on how the money was going to be spent, so the money could be
used.
If you have a long-term commitment, you are able to plan
for 5 years. You are able to develop that flexibility and that
plan that is going to be able to be much more positive,
visionary, and get people from dependence to independence, and
that is why it is so important to have a long-range
reauthorization rather than just 6 months to 12 months. You are
going to have the Governors' out there and the welfare people
very nervous about whether or not it is going to be
reauthorized, whether or not the money is going to be there.
Therefore, they are not willing to go the necessary step to put
in State dollars and State resources to make the plan work, and
that is the problem you have by a short-term fix.
Mr. McCrery. Thank you. Let us explore the question of
child care a little bit more because that is a legitimate
concern of all of us who are wanting to move people from
welfare to work. We understand in many cases we are talking
about single mothers and they are going to have difficulties
moving to work if they cannot get child care for their
children. So it is a question that we ought to talk about.
We are hearing from some that we need more funding, direct
funding for child care. Can you recall what the level of
funding for child care was before the 1996 law and how that
compares to the funding after the 1996 law?
Mr. Thompson. I am not exactly certain. I know it was a lot
less. I know that we are getting more since then. The exact
dollar amount, I do not know.
But in regards to what level of funding we have right now,
it is $4.8 billion, but we also built in flexibility. Thirty
percent of the TANF funds can be used for child care, and an
additional amount of money from the Social Services Block
Grant. So instead of $4.8 billion, when you look at all of the
potential sources of funds, it is well over $9 billion
annually.
Mr. McCrery. Actually, I believe States can transfer up to
30 percent of their TANF block grant----
Mr. Thompson. That is correct.
Mr. McCrery. Into the child care block grant. They can
actually use all of their TANF moneys for child care if they
want to. In addition to that--and you are correct, by the way,
the level of funding was substantially more following the
enactment of the 1996 law for the child care block grant than
it was before.
Mr. Thompson. I just got the figures. It went from $2.1
billion to $4.8 billion.
Mr. McCrery. Yes. That is a huge----
Mr. Thompson. I knew it was a lot, but I did not know how
much.
Mr. McCrery. A huge increase for child care. And as you
pointed out, under TANF, they can transfer 30 percent of their
TANF block grant into the child care block grant, or they can
simply utilize their TANF funds for child care as part of their
welfare program. And, in fact, Mr. Secretary, are not a lot of
States using their TANF funds now to supplement welfare through
providing child care resources?
Mr. Thompson. Yes. I think all are, but I am not sure about
that. I would suspect they all are. I know we did. I know we
used a maximum amount in Wisconsin to do that.
Mr. McCrery. And also, can States not spend their own money
for child care if they want to and does that spending not count
against their maintenance of effort requirement?
Mr. Thompson. Yes, it does.
Mr. McCrery. And are States doing that?
Mr. Thompson. I know Wisconsin did. I do not know how many
others. I know Michigan is, and I know other States are, but I
do not know how many.
Mr. McCrery. My time is expired. Thank you, Mr. Secretary.
Thank you, Mr. Chairman.
Mr. Thompson. Thank you, Congressman.
Mr. Herger. I thank the gentleman from Louisiana. Now, the
gentleman from Maryland, the Ranking Member of the Subcommittee
on Human Resources, Mr. Cardin, to inquire.
Mr. Cardin. Thank you, Mr. Chairman.
Mr. Secretary, let me continue on some concerns I have on
some of the new requirements that you are suggesting. We have
already gone over the fact that under current law, a State can
use as a legitimate work participation requirement an
individual being involved in vocational education or training
for currently 20 hours, changed to 24 hours under your proposal
for the basic work requirement, but no longer does vocational
education and training count in the initial 24 hours.
You have made it clear--so, therefore, the States have the
option of basically getting these people employed for the 24
hours or finding some form of subsidized or workfare for the
individuals in the first 24-hour requirement.
You have made it clear, and I applaud you for this, that
these individuals will be protected under the minimum wage
principles, including community service, which I fully support
and I thank you for clarifying that up front so that we do not
have to reopen that battle from 5 years ago.
We just got yesterday, and I will give you a copy of this,
from the Congressional Research Service (CRS) indicating that
if you calculate the minimum wage based upon the welfare
benefits and the food stamp benefits, that in a significant
number of States, they would not be able to do workfare up to
24 hours, that that would be below the minimum wage and,
therefore, could not be done. So this CRS report indicates that
we would be treating States differently in this requirement.
Your State of Wisconsin could impose a 24-hour workfare.
The State of Illinois could only do 21 hours of workfare. The
State of Alabama could only do 17 hours of workfare. I point
that out because I think that is an inequity. It is something
we have to deal with as we try to refine the proposals that are
being suggested, and I just really wanted to put that on the
record, and I will make sure you get a copy of the CRS report.
Mr. Thompson. Congressman, if I could--I do not want to
interrupt you----
Mr. Cardin. Sure.
Mr. Thompson. I think you are reading the proposal wrong,
because our proposal also says that if you only meet the 17
hours and that is all you can do to meet the minimum wage, that
is satisfactory.
Mr. Cardin. Right. But my point is, you are saying,
therefore, for the people--you are obviously encouraging lower
grant levels. You are saying for the people of Alabama that
there will be a 17-hour requirement but for the people of
Wisconsin, it is 24 hours, set by Federal standard, even though
the State may wish to have a comparable--Alabama may want to do
what is being done in Wisconsin, and we are not allowing them
under this restriction. I understand what the underlying
statute provides, but I do not know if that is fair, for us to
impose different standards for different States.
Mr. Thompson. I am willing to look at it again. I am
willing to work with you. I also want to point out that, with
regard to the vocational education aspect that you talked about
at the beginning, Congressman, if the vocational education is
in the field while the person is working, it does count. It is
only the vocational education in the classroom that does not.
Mr. Cardin. I appreciate that clarification. I was not
aware of that, but we are getting closer. That is good. Now
just deal with the classroom and we will be there.
The second point I want to bring up in the time that
remains is that my State of Maryland wants to supplement wages
for those who are working. They were prepared last year to use
State-only money because, quite frankly, they did not want it
to count toward the 5-year clock. They thought that was wrong.
So they were prepared to use State-only money. Well, in the
last year, I think most States have run out of a lot of their
flexible funds. It is a tough budget year. They would like to
use TANF funds to supplement the wages, which they can do, but
if they do under current law, it would count toward the 5-year
clock.
My understanding of the 5-year clock is that we want people
to work. That was the whole concept. So I guess I would ask you
to, and the Governors' have weighed in on this, why should we
not allow some flexibility here? If the individual is working
and if the State wishes to supplement the wages, they could do
it through the Tax Code and it would not count toward the 5
years. Why can they not do it directly without it impacting on
the 5-year clock?
Mr. Thompson. Well, no State has come close to the 5-year
clock with the 20 percent exceptions that are built into it.
You are allowed to exempt 20 percent of the population from the
5-year limit. No State, to my knowledge, is anywhere close to
that record, so I do not think Maryland has to worry about
that.
The second thing is, I do not know if Maryland has a State
earned income tax credit.
Mr. Cardin. We do.
Mr. Thompson. I know that is what I did in Wisconsin, with
a State earned income tax credit. It works extremely well and
that also does not----
Mr. Cardin. They have that, and I think they want to do
both. The problem, of course, is the 5-year clock is lifetime,
so we are only 5 years into the program. I just urge you to try
to bring some of the Governors in, some of your colleagues in
from the States because they are concerned about this issue.
Mr. Thompson. Thank you very much. I will be more than
happy to work with the Governors. In fact, several of them have
already been in to see me about it on both sides of the aisle--
on all three sides of the aisle.
Mr. Herger. The time is expired. I thank the gentleman from
Maryland. Now, the gentlelady from Washington, Ms. Dunn, to
inquire.
Ms. Dunn. Thank you very much, Mr. Chairman.
It is delightful, Mr. Secretary, to see you once again on
the other side of the table from us, but yet in a position that
is even more powerful, I think, to do good for folks who want
to move from welfare to work than you were doing even 5, 6
years ago.
I have seen all kinds of numbers on why promoting healthy
marriages improves the well-being of children. A child born and
raised outside marriage is seven times more likely to live in
poverty than a child born and raised by two parents. A child
born and raised outside marriage will spend 51 percent of
childhood in poverty. By contrast, a child born inside marriage
and raised by both parents in an intact marriage will spend
over 7 percent of childhood in poverty. A child born and raised
inside marriage is five times less likely to be dependent on
welfare than a child born and raised outside marriage.
You get the point, and you established some of these
statistics in the State of Wisconsin. We did it in the State of
Washington as we moved 40,000 families off welfare and, I hope,
encouraged good unions among many of them.
What I would like you to do for us, if you would, please,
is discuss the new account that is being set up in the
Administration's bill that will encourage marriage.
Mr. Thompson. Thank you very much, Congresswoman Dunn.
There are two proposals. The first one is the illegitimacy
bonus, which I think most people have indicated has not worked
out very well. So we are taking $100 million, which is the
total amount of that bonus, and we are putting it into a new
demonstration program to allow communities, regions, whatever,
to apply for it. We think there will probably be five to seven
that will apply for it that get it to set up programs, and this
program will be set up at the local level to try and assist
individuals, individuals that are already married, to find out
if they have problems, to be able to counsel them, whether it
be over alcohol, drugs, anger, gambling, whatever the case may
be.
In the cases of individuals who want to get married, give
them some counseling in order to have a healthy marriage. Also
to make sure that if individuals are contemplating marriage,
see if they have some problems and set up programs to assist
them, such as taking care of the children, such as making sure
that they know how to handle their finances, which is a big
problem in new marriages, and be able to assist them to develop
a healthy marriage. The reason for that is to make sure that
the children are taken care of. That is one program.
The second program is a program set up for the States, and
that is taking $100 million out of the performance bonus and
that has to be matched dollar-for-dollar by the States. So it
is actually a $200 million program, $100 million from the
States, $100 million from the Federal Government, and the
States would set up their own programs. Nothing is being forced
upon them.
The States would, I think, aggressively seek these dollars
and set up their own programs, but there is nothing to tell the
State of Washington, the State of Wisconsin, the State of
Michigan, or whatever the case may be that they have to apply.
If they want to set up the program, the money will be available
and they will set up the program in order to try and help
individuals maintain and strengthen their marriages, or assist
them in forming healthy marriages if they so desire.
Nothing in these programs will do anything to encourage
people to get into an abusive situation or force marriages.
This is completely voluntary, Congresswoman.
Ms. Dunn. Thank you very much, Mr. Secretary.
I wanted to ask you another question, also, related to my
own State's high unemployment rate. It is number two in the
Nation at 7.5 percent last month and we are fearful that it
might be going in the wrong direction.
Can you let us know, is there any reason to believe that
the state of the economy is reflected in the number of people
who are on TANF, on welfare, or are there other factors that
influence the welfare caseload?
Mr. Thompson. We think that welfare reform has worked even
in the downturn. I mentioned the City of New York previously.
The City of New York had an uptick, an increase in welfare
cases after September 11 in New York City, in October and
November, but it has leveled off. Now I believe the latest
statistics show that the City of New York is actually lower
than what it was pre-September 11. So it indicates to us that
welfare reform does work.
The second thing is that we also allow for flexibility in
case of a downturn so that States have a contingency fund of $2
billion if they want to apply for it.
And the third thing is they have the caseload reduction
credit that they can apply to the first 2 years, 100 percent
the first year. The State of Washington, which has done an
excellent job of reducing its caseload, really does not have
any extra requirements because with the caseload reduction
credit that they are receiving, they would not have--I believe
Washington is one of those States that has reduced by over 50
percent--would not have any extra requirements whatsoever.
Ms. Dunn. And just to finish up, Mr. Chairman, you think
that we are in good shape to reauthorize this legislation for 5
years with the flexibility that we have built into it?
Mr. Thompson. I think it is absolutely necessary to do so.
I think that with what we are proposing here, and with
something that Congressman Herger has worked on and is
developing, along with Congressman Cardin, we can come up with
a bipartisan proposal that is going to be absolutely excellent
for the second step in TANF. That will get people moving up the
economic ladder and getting more people from poverty into a
workable job that is going to be able to allow them to have the
American dream.
Mr. Herger. The gentlelady's time has expired, and I thank
the gentlelady from Washington. Now, the gentleman from
Washington, Mr. McDermott, to inquire.
Mr. McDermott. Thank you, Mr. Chairman. It is good to see
you again, sir.
Mr. Thompson. It is always a pleasure, Congressman.
Mr. McDermott. Since the time on the Budget Committee,
somebody told me a joke, or a story about a guy up in Fond du
Lac who went to the county fair and bought a mule and they
asked how much----
Mr. Thompson. Fond du Lac, Washington, or Fond du Lac,
Wisconsin?
Mr. McDermott. No, that is Fond du Lac, Wisconsin.
Mr. Thompson. Okay.
[Laughter.]
Mr. McDermott. They said, it takes one bucket of oats every
day to feed this mule. So the farmer took him home, worked him
a while, said he wondered if he could get by with three-
quarters of a bucket. He tried that for a while and things
seemed pretty good. Then he tried a half a bucket. One day, the
mule died.
Now, it looks to me like what we are doing here without
thinking about it is exactly that. The State of Washington, I
have here what they are going to pass in the next couple of
days as the budget for Work First in Washington State, which
you say is a good program. It has taken us down. It has reduced
our caseload by 47 percent. They are now cutting $54 million
out of it. They are taking $7.5 million out of the training.
They are wiping out the work experience contracts, so saving $3
million, because it did not work. They did a study at the
School of Public Affairs at the University of Washington, and
they followed 3,000 families and the work experience contracts,
it was a good idea, but it just simply did not raise anybody's
income.
What I am concerned about is the fact that in a time when
States have less money--Mr. Cardin already referred to
Maryland, and we are not alone, the two of us--you have now 15
million kids eligible for child care. I understand all this
moving money around. The Child Care Development Block Grant
program covers about 12 percent, and people in the States are
shifting enough to cover another 5 percent, but most kids do
not have--there is not money sufficient for the child care. And
yet in this bill, we are going to extend the work period from
30 hours to 40 hours. So we have not got enough money to cover
the kids now. How can you extend the work requirement and say
10 more hours out there without child care?
I understand I am talking not to the guy who wrote this
budget but the guy who is sent up here to defend it, and for
that, it is a terrible job you have got, but the fact is, you
cannot flat-line that money if you are serious about not
leaving kids out there unprotected.
Mr. Thompson. I am very serious about it, Congressman.
Mr. McDermott. I know you are.
Mr. Thompson. I am very serious about it. I understand that
there are four things in order to make a successful welfare
program. The first one is health care. The second one is child
care. The third one is job training. And the fourth one is
transportation.
We think that this proposal, considering the fact that we
have a war going on, homeland security infusions of new dollars
are necessary, that this is the amount of money that we have
available. We sincerely believe that it is adequate to do the
job to continue to move individuals out of poverty into
independent work and we believe that sincerely.
Now, we also are allowing for a lot of flexibility at the
State level, and that, is providing 100 percent caseload
reduction credit in the first year, as well as 50 percent in
the second year. We believe then, maybe at that time, the
economy is going to increase. Maybe at that time, the war is
over. Maybe at that time, we will have some extra money to go
the next step as far as child care. But right now, we think it
is adequate, and it is----
Mr. McDermott. But the State of Washington, you just heard,
has 7.5 percent unemployed----
Mr. Thompson. I understand that.
Mr. McDermott. And no sign it is going up. Boeing just lost
all its contracts with South African Airlines. They switched to
Airbus. You have got every indication that things are getting
worse, at least in our State. Now, Mr. Greenspan has convinced
everybody in the Congress except me, I guess, that the
recession is over, but this State is not going to have the
money or the flexibility when they cut $53 million out of this
program alone. They just cut $1.5 billion out of the budget.
So the question really is, how do you do that without
raising the amount of money? If you think it is successful to
get people off welfare and onto--is it that you think the money
that was going into the welfare grant is suddenly going into
the child care grant? Is that it?
Mr. Thompson. It is 30 percent. You have got the
flexibility to move 30 percent there, Congressman, if you so
desire. There is actually, if you want to move all that money,
there is over $9 billion that could be put into child care. But
you have got to also realize that the caseload is one-half of
what it was 5 years ago, and even with inflation, with a 50-
percent reduction in caseload, you still have an increase in
child care money this year at level funding.
Mr. McDermott. But do you disagree with my figures----
Mr. Thompson. No, I do not.
Mr. McDermott. That 2 million are covered out of the 15
million? You do not disagree with that?
Mr. Thompson. I do not disagree with your numbers.
Mr. McDermott. But you just think it is Governors are not
managing well? I mean, is that the bottom line?
Mr. Thompson. No, I am not going to get into a fight. I
just think that we have this flexibility, we have this amount
of money, and we think that as far as TANF is concerned, this
is an adequate amount of money at this point in time in order
to do the job, Congressman.
Mr. Herger. The gentleman's time has expired.
Mr. McDermott. Thank you.
Mr. Herger. Mr. Secretary, the way the current law has
worked out, there really seems to be no effective work
participation requirement in most States today and States
generally have full flexibility in designing their work
programs using Federal dollars. The most recent data we have on
work by the current welfare caseload shows what that has meant.
An amazing 58 percent of adults on welfare in 2000 were
doing nothing at any given moment to work or prepare for life
after welfare. That is a shocking statistic given what we know
about how successful welfare reform has been in reducing
caseload and poverty and otherwise encouraging work.
Do you have any insight into why so many adults on TANF are
not participating in any work activities, and what would you
propose to change this?
Mr. Thompson. We have been somewhat guilty of our
successes, because when the Congress set the 50 percent level
they also put in the provision that for every 1-percent
reduction in the caseload there would be a 1-percent reduction
in the work requirement. So when you have a reduction of 50
percent, you are able then to satisfy the requirements of the
law without having anybody work. That is why we are putting
back in the 50 percent level and phasing out the caseload
reduction credit. That is how we are satisfying it, and we are
raising that by 5 percent a year. Over 5 years, it will get up
to 70 percent.
Mr. Herger. So then this is something that is being
recognized----
Mr. Thompson. It is.
Mr. Herger. And something that we are working in the
proposal, the President's proposal, to correct?
Mr. Thompson. That is correct.
Mr. Herger. Thank you very much. With that, I recognize the
gentleman from California, Mr. Becerra, to inquire.
Mr. Becerra. Thank you, Mr. Chairman.
First, Mr. Secretary, let me thank you. Again, you are
always more than open and always very accessible to all of us,
whether here in Committee or in other venues when we have an
opportunity to speak to you, so I want to thank you very much
for doing that and I hope we continue to see that, not just in
the Department of Health and Human Services but throughout. I
think it is a great model to follow, and I applaud you for
that.
Mr. Thompson. Thank you.
Mr. Becerra. I also want to echo what you said earlier and
the Chairman said earlier about Dr. John Eisenberg. My wife
used to work with Dr. Eisenberg at the Agency for Healthcare
Research and Quality, and she felt his passing, as all who
worked with him did, because he was just such a brilliant man.
Mr. Thompson. Fantastic.
Mr. Becerra. He went far before his time. So I want to also
acknowledge that and pay my respects to him and, of course, my
condolences to his family, as well.
Mr. Thompson. Thank you for saying that, Congressman. I
appreciate that.
Mr. Becerra. Absolutely. Sometimes we lose the best too
quickly, and Dr. Eisenberg----
Mr. Thompson. I will pass that on to his wife, if you do
not mind.
Mr. Becerra. Of course. Thank you. Thank you.
I wanted to touch on a few issues. On the child care issue,
I think you have responded to some degree on that. I hope that
you will consider looking at that a little closer because I
think what Mr. McDermott is pointing out is so very true, that
we are not doing enough. More than a third----
Mr. Thompson. Everything that Congressman McDermott asks me
to do, I always do because he is Irish.
[Laughter.]
Mr. Becerra. As you are probably aware, more than a third
of the States in this country have either frozen their intake
or have a growing wait list of parents who are waiting to
receive some form of child care assistance. When you talk about
the numbers, I know that there was a study done in the State of
California up in the Santa Clara County area that showed that
over a third of their intake and those waiting for child care
assistance were people earning $10,000 or less, so clearly,
without that assistance, there is no way that they will be able
to afford that child care that they desperately need for their
kids, so I hope that we will continue to work on that.
Mr. Thompson. Thank you.
Mr. Becerra. On the issue----
Mr. Thompson. I want to work with you on that, too, as
well, Congressman.
Mr. Becerra. Thank you. On the issue of work activity, I
want to take some issue with what the Chairman just said about
58 percent of individuals--again, we are talking mostly about
women with children--doing nothing. It is not that they are not
doing nothing, it is just that some of what they are doing is
not recognized as work activity.
Mr. Thompson. That is true.
Mr. Becerra. Some of them are going to college. Some of
them are trying to find other ways to train themselves, and
they are not getting credit for it. And beyond that, they are
also, hopefully, taking good care of their children and trying
to make do with the little they have. So I hope that we do not
disrespect any woman who is out there trying to get herself
away from poverty and get herself to self-sufficiency, and we
should be doing a great deal to help them.
In that regard, on education and training, I hope that we
are able to work with the Administration and do a little bit
more. I, too, am concerned about the restrictions on what could
be classified as work activity and I would urge you, Mr.
Secretary, and I know you are sensitive to this already, to
consider including English as a Second Language (ESL) as a
work-related activity because you have got scores of
individuals--let me give you a statistic that I think is very
telling.
You have got 42 percent of immigrant adults in this country
working at about minimum wage or below, a little bit over
minimum wage, about $7.50 and below an hour. That compares to
about 28 percent of the rest of the working population. They
are truly, as we say, those that are perhaps a paycheck away
from disaster, hard times, and yet they have a higher
percentage of involvement in the work force. Their work
participation rates are higher for immigrant adults than they
are for U.S.-born adults.
So they try harder to find jobs, they usually hold more
jobs because they are earning less, yet once the economy turns
down, as it has, they are the most susceptible to the hard
times because they have not had a lot of money, so it is tough
to save a lot, and so when it is a bad time economically, they
have probably lost not just their jobs, but probably did not
have any benefits, and they are trying to make ends meet.
So I would hope that in the process, we consider that a lot
of these folks are trying to do exactly as we say. Learn
English. English is the language of commerce. If we do not help
them move forward in what they are already trying to do, we
just make it more difficult for them to ever leave that world
where they are always a paycheck away. So I would hope that
maybe you will consider looking at English as a Second Language
as something that we should consider as classifying as work
activity.
I have been approached by several people in my State of
California. There are two individuals, one is Phyllis Mahoney,
another is Kerri Medina. Both are in college. One is in a 4-
year State university in California. They are telling me that
because of the way the law is written, both federally and at
the State level, they are about to lose their opportunity to
continue their college education and get those college degrees,
in some cases a 4-year baccalaureate, which means that they
will probably never have to be on welfare again.
The more we do to help women who are taking that
initiative, even though the hard times that they have suffered
through in the past and the fact that they have to deal with
raising a family has not precluded them from moving forward, I
hope we will consider that education should be an option,
especially postsecondary education and ESL.
Mr. Chairman, I will stop with one last comment because I
was hoping to get some responses from the Secretary, but I used
up my time. Immigrants, you found fit, and I am pleased that
you found fit to try to do more for legal immigrants with food
stamps, which I think was the right thing to do. Over the last
several years, the previous Administration was trying to undo
some of the harsh actions taken in 1996 against immigrants.
Please consider the fact that the ban that you right now
have in place in your legislation on legal immigrants does a
disservice to folks who are trying to get themselves further
along. The fact that they do not earn a lot does not mean they
should be penalized in hard times, and I hope that we can work
with you on that, as well.
Mr. Thompson. Thank you very much, Congressman. You have
asked several questions, and there is no question that I want
to work with you on the subjects you have raised.
With regard to education, I am a big proponent of
education, but you also have to realize this is a work program
and you have to have work as the essential element. There are
plenty of college kids that are on welfare that are working and
still going on to college with child care and so on. There is
no question that we have to work on this child care, and I want
to work with you. I want to work with Mr. McDermott, Mr. Levin,
Mr. Rangel, Mr. Herger, and all the other individuals. But you
have a limited amount of money and you have to make things do.
Mr. Becerra. By the way----
Mr. Herger. The gentleman's time is expired.
Mr. Becerra. I would mention, Mr. Secretary, as Governor,
you yourself provided the food stamp and----
Mr. Thompson. Yes, I did.
Mr. Becerra. AFDC-like, Aid to Families with Dependent
Children, benefits to legal immigrants even though the Federal
Government did not provide the funding, so I want to
congratulate you on doing that. I hope now as Secretary, you
can move forward at a Federal level so we can provide that
latitude.
Mr. Herger. The gentleman's time is expired.
Mr. Thompson. On legal immigrants, you know that there is a
provision in the immigration law that says that a person has a
sponsor that is supposed to take care of him or her for 5
years. The Administration feels that that is sacrosanct and
should be taken into consideration.
Mr. Becerra. Thank you, Mr. Chairman.
Mr. Herger. I thank the gentleman from California and the
Secretary. Now, the gentleman from Pennsylvania, a Member of
the Human Resources Subcommittee, Mr. English, to inquire.
Mr. English. I thank the Chairman, and like the others on
the Committee, I would like to thank you, Mr. Secretary, for
taking the time to testify.
I have a couple of questions. As you know, from your own
expertise, poverty can have a number of different sources. Some
of them are economic. Some of them are also, unfortunately,
behavioral, and in some of those cases, we need to pay
particular sensitivity and recognize a particular need for
intervention.
I wonder if the Administration has considered, although it
is not part of your proposal, embracing some full or partial
requirement for drug testing recipients of welfare benefits,
and as someone whom I am sure has contemplated this issue in
the past, I wonder if you would share with us your view of the
pros and cons of putting in place a policy like that.
Mr. Thompson. We discussed it, Congressman. We did not put
it in. We thought that it should be left up pretty much to the
States to do that at the State level rather than have a
national policy on it, I know the State of Michigan is
attempting to do something in this regard.
Mr. English. On the issue of marriage, the Administration
has had the courage to make this a central theme in its
proposal, but one of the reasons why marriages break up among
the working class, to the extent that there is an economic
incentive, I fear that a lot of it may be tied to some of the
marriage penalties that are built into the programs----
Mr. Thompson. You are absolutely correct.
Mr. English. But also marriage penalties built into the Tax
Code through the earned income tax credit. I wonder to what
extent the Administration would welcome a further initiative in
this area, and do you feel this would be useful?
Mr. Thompson. I do not know what the Administration policy
is on that. I can tell you my personal policy is I think it is
absolutely necessary and important. I would welcome it. I would
like to work with you on it. I think that we could achieve a
great deal of equity in it. I think it is really sad that you
have some marriage penalties in the Tax Code that actually
prevent individuals from getting married.
Mr. English. I am grateful for your offer, and I would
certainly like to take you up on it, not only through this
reauthorization but for the long haul.
Mr. Secretary, as a former Governor, undoubtedly, you share
the concern of many for the financial health of our States,
particularly as they take on the burden of providing these
services. Can you describe for us the provisions that the
Administration has put in its proposal for the continuation of
rainy day funds and also the maintenance of effort requirement
that exists under current law for continuing paid contributions
to----
Mr. Thompson. We thought it was necessary to continue the
maintenance of effort requirement, although we have loosened it
and allowed for more flexibility in some cases. But overall, it
is basically the same as they were in TANF 1.
As far as the contingency fund, we put back in the $2
billion. We changed it so that a State's share of the $2
billion could be used up fully in 1 year, whereas in TANF 1, it
had to be used up over 5 years, and we think that there is more
flexibility. If there is a real downturn, the States would need
that money and, therefore, the flexibility was put in so that
it could be used all up in 1 year if so needed.
Mr. English. Thank you. Mr. Secretary, I guess my final
question has to do with the child support enforcement component
of what you put forward. I noticed that you include in it a $25
processing fee.
Mr. Thompson. That is correct.
Mr. English. Some people might be concerned that that could
be onerous. Could you speak to that?
Mr. Thompson. That $25 fee is not for anybody that is
currently on TANF or has ever been on TANF. The $25 fee is only
for those individuals that are using the system in order to
collect their money, and we feel that is a small amount. But I
want to make it crystal clear that anybody that is on TANF or
has ever been on TANF will not have to pay the $25 fee. Only
those individuals outside of the system of TANF that want to
use the child enforcement mechanism would pay a one-time
administrative fee of $25.
Mr. English. Thank you, Mr. Secretary, and thank you, Mr.
Chairman.
Mr. Herger. I thank the gentleman from Pennsylvania. Now,
the gentlelady from Florida, Mrs. Thurman, to inquire.
Mrs. Thurman. Thank you, Mr. Chairman.
Mr. Secretary, thank you for being here. I would say that I
think all of us are pleasantly surprised with the numbers that
we have heard over the last couple of years of what is
happening with welfare and how we have reduced and put people
back to work. Certainly as Mr. Shaw said, we did hear some
tremendous numbers in Florida, and we are very pleased with
that. I think all of us that worked on the changes in 1996, we
are very pleased that we are able to come back and have this
kind of a story.
But what I do have, and I think some of my colleagues have
probably brought these issues out, but since it is really
something that we just talked about with the State yesterday
and to the two appropriations chairmen of those committees that
were going to be making some determination and are very
concerned, first, let me say this.
I want to thank you and others for making sure that the
supplemental grants were passed in the stimulus package. I
cannot begin to tell you how excited Florida was that they got
their $60 million, and that is a big issue for them because for
the first time, they are in a deficit in their TANF moneys of
over $11 million. So this will make a tremendous difference to
them, but it is something they are going to have to work
through.
The second thing, though, I would say, and they made this
comment over and over again. Judge Kierney made it, and I would
like to say to you that we invited them up to meet with us on
this issue and some disproportionate share issues and some
other things, that you will make your team available to those
folks in Florida as we start to see the language be put into a
bill because I think they would like to have an opportunity to
kind of look at this.
They have asked that, first of all, we know that the $16.5
billion level for many was a tough sell. We understand that
there were a lot of people that would have liked to have seen
those dollars cut. We thank you very much for keeping that,
although in saying that, we would hope that some of us can make
the case to our colleagues that maybe there are some areas that
we need to adjust, child care or another area that Florida
talked about was in transportation.
The other issue that I would talk about is the area of
flexibility. In Florida, as you may know, some of those moneys
were actually given to the State community colleges for people
to attend education classes for a year. Now, if our numbers are
right, then what we have actually done is we have put ourselves
in a situation where we have said to folks, okay, you are going
to pull yourself up by the bootstraps. We are going to give you
this education.
But some of those that may not have had that opportunity,
if this piece of legislation should go into place with the
requirement now or what the requirement would be, would not
have that same opportunity, and I think we need to think about
that. If we move people from one place, from welfare to work,
the next obvious is to have them move up in that workplace, and
we all recognize, the President and all of us, that the one
area we do this is in education. So I think we need to keep
that in the back of our mind, that education ought to be a key
component to this to keep people moving in the right direction.
The other thing that they asked, and some of this you have
already talked to, is they are asking to maintain the authority
to transfer the 30 percent of the TANF funds into child care
development and they are also asking that the--and that the
Social Services Block Grant, we would eliminate the 4.25
percent restriction that has been placed on the Social Services
Block Grant program as they see that as something that would be
helpful.
They would like to provide better program alignment and
simplification for integrating the funding and program rules
across the public assistance and workforce development. And
then they also would like to make sure that we establish
improving the well-being of children as the purpose of TANF.
Those are some of the criteria that they set out for us,
and as I said, I hope that we will have the opportunity to keep
this dialog open with Florida.
Mr. Thompson. You asked several things. Let me try and go
down them.
Mrs. Thurman. Okay.
Mr. Thompson. First off, the staff, everybody in the
Department of Health and Human Services, from my immediate
staff, has been told many times, when anybody from Congress
wants something, that they are up here.
Mrs. Thurman. Perfect. Thank you.
Mr. Thompson. Democrat, Independent, Republican alike, we
want to work with you. The second thing is, I think I made a
mistake by hiring somebody from Florida.
Mrs. Thurman. We actually do not think that is a mistake,
by the way.
[Laughter.]
Mr. Thompson. He is absolutely a pain. He is always saying,
``How does this affect Florida?'' So you have somebody in the
inner circle that is looking out for you on a daily basis. And
maybe the supplemental fund we were discussing should be
reduced. There was one person here who was talking very
strongly and said, ``That would hurt Florida.'' So I want you
to know you are well represented in the inner circle,
Congresswoman.
And the third thing, in regards to this, I want to work
with you. I certainly appreciate the offer, and you have got
these issues. On education, we may have some difficulties
because I do not want to turn this into a college tuition
program. I want to make sure that this maintains its emphasis
on work, because I think that is so important.
Mrs. Thurman. But I think it does. I mean, I think we are
at that same goal, that it should be about work, but what we do
not want to see happen is----
Mr. Thompson. I agree with you.
Mrs. Thurman. To the young woman who goes from a $7 an hour
job to a $10 an hour job, loses her child care, but can never
get to the $20 an hour so she can pay for her child care.
Mr. Thompson. Thank you so very much, Congresswoman.
Mr. Herger. The gentlelady's time is expired. Now, the
gentleman from Arizona, Mr. Hayworth, to inquire.
Mr. Hayworth. Thank you, Mr. Chairman, and Mr. Secretary,
we welcome you even as my home State welcomes so many Wisconsin
citizens down for spring training.
[Laughter.]
We hope you will have a chance to come enjoy the Cactus
League, and we know you are hard at work here in so many
different endeavors.
Mr. Thompson. You have not invited me down yet,
Congressman, but I will be more than happy to come if you do.
Mr. Hayworth. Well, good. I am glad to know that, and I am
glad it is part of the record.
[Laughter.]
We will take care of that, perhaps in another venue,
Governor.
We looked at your innovation in Wisconsin and Arizona tried
to follow suit, as in the year 2000, my home State received a
Federal award when it was one of five States to receive $20
million in TANF funds for reducing the rate of out-of-wedlock
births. I am happy to see the Administration's proposal adds a
new component to offer incentives and technical assistance to
help identify and foster strategies that will promote healthy
marriages and improved child well-being.
It has been talked about before. My colleague from
Washington State, Ms. Dunn, touched on this. My friend from
Pennsylvania touched on a couple of other aspects of proactive
steps we can take to deal with this important situation. And,
of course, research has demonstrated a clear link between child
well-being and being raised by two parents in a healthy
marriage.
Now, as is often the case here in the beltway, what Drew
Pearson and Jack Anderson called the Washington merry-go-round,
I am concerned that opponents are creating confusion around the
fine points of this new component. So once again, for the
record, can you clarify that the purpose of this measure is not
to force anybody to get married or to stay in a marriage that
could be dangerous.
Mr. Thompson. Absolutely, we do not want to force
marriages. We do not want people to stay in abusive situations.
What we want to do is we want to counsel individuals so that
they can develop a healthy marriage, a healthy marriage that is
going to be able to help their children achieve whatever those
children want to achieve and be able to help those children
develop the best that they possibly can. That counseling is
going to require counseling on finances, counseling on
communication skills, counseling on whatever the States or
communities want to set up. But in no way do we want to force
marriages or keep individuals in abusive situations.
Mr. Hayworth. Mr. Secretary, I appreciate you stating that
for the record. You would be--well, maybe you would not be
surprised. I have actually been on some television shows where
it seemed that the direct opposite was being suggested, but
then again, that is what transpires in political discourse
these days.
Thank you. We look forward to having you in Arizona, and
Mr. Chairman, I thank you for the time.
Mr. Thompson. Thank you, Congressman. You are wonderful.
Mr. Herger. I thank the gentleman from Arizona. Now, the
gentleman from Texas, Mr. Doggett, to inquire.
Mr. Doggett. Thank you very much, Mr. Secretary, and you
are going to need, what, about a couple hundred million dollars
to provide that counseling on marriage?
Mr. Thompson. Pardon?
Mr. Doggett. It is about $200 million worth of counseling
that you are seeking on marriage?
Mr. Thompson. Yes. There are two programs. One program is
taking the $100 million out of the illegitimacy bonus program
and putting about $75 million of it into a program for
communities and regions to apply for demonstration programs.
The other $25 million is for technical assistance to States and
$5 million of that amount is for technical assistance to Native
American tribes. And then the other $100 million out of
performance bonus is for the States and the States have got to
match that dollar-for-dollar.
Mr. Doggett. They can essentially do whatever they want to
with those monies----
Mr. Thompson. That is correct.
Mr. Doggett. As long as they can make--the type of programs
you talk about or some other if they can make the case that it
encourages marriage?
Mr. Thompson. I would not say encourages marriage. I would
say in order to develop healthy marriages.
Mr. Doggett. Okay. My concern is with the child care issue
that you have been raising, and you have been asked about it
before. I am pleased that Chairman Thomas has indicated that he
feels this is one of the areas we need to do some more work on,
because in the capital city of Texas that I represent, we have
about 1,800 children, going up and down a little bit, each
month that are on a waiting list for child care. We have about
39,000 or 40,000 in the State of Texas on waiting lists for
child care.
Your proposal that adds this $200 million for marriage
counseling or the like does not add any additional money to
take care of those child care needs as I read the proposal, and
I think it is the same way that the National Governors'
Association that you were once so active in and the National
Council of State Legislatures and the American Public Health
Association read that. I believe that the effect of this level
of funding, though you could shift monies from elsewhere, you
would be depriving resources from elsewhere to do that, and the
effect of the level funding is to reduce the actual purchasing
power for child care.
Beyond the waiting list and the people that get frustrated
and are no longer on the list, the other big concern in the
child care area I have is that we end up in competition between
funds that are designed to enhance quality and funds that are
designed to meet the needs of the people who are waiting there
for services. In one area of Texas, the quality improvement
reimbursement rate is only about a 70-cent increase over the
non-quality improvement. I am concerned that child care, as I
know you are, be more than just babysitting with minimum wage
workers.
Do you feel that we need to do more to increase child care
quality, and how is that reflected in your proposal?
Mr. Thompson. You have asked several questions in leading
up to that, Congressman. First off, I do not think it is a cut,
because you have reduced the caseload by over 50 percent, and
the level of funding with a reduction of caseload by 50 percent
is still an increase. If you extrapolate it out 5 years and you
still have the child support proposal, and the child care block
grant remains the same, with the caseload going down, you still
are increasing the number of dollars on a per capita basis for
individuals. That is point number one.
Point number two, we believe strongly in quality day care
centers, but we also believe that the individual mother of
those children should have the choice as to what is the best
for those children, and that is in this proposal.
Mr. Doggett. What do you do in your proposal to increase
quality at child care centers for those working mothers, and
fathers, for that matter, who need to have child care?
Mr. Thompson. We believe that the States are the ones that
are responsible for improving the child care quality----
Mr. Doggett. And that there is no Federal responsibility?
Mr. Thompson. Well, there is Federal responsibility for
making sure that States maintain the requirements. We put that
in the block grant, but the States set up the child care
provisions.
Mr. Doggett. Mr. Levin, did you want me to yield to you for
a moment?
Mr. Levin. There are just a few seconds. Mr. Secretary,
this chart that comes from the Committee on Ways and Means, it
says the source is the U.S. Department of Health and Human
Services. Does this come from your Department or is it from the
Committee on Ways and Means? You do not know?
Mr. Thompson. I do not know, Congressman. I cannot answer
that.
Mr. Levin. All right, because it does not include----
Mr. Thompson. If it has got the Department on there, I am
sure it came from my Department.
Mr. Levin. All right. Well, we may----
Mr. Thompson. But I have not seen that until today.
Mr. Levin. Okay. We would like to chat with your Department
about the data. It does not include a number of activities----
Mr. Thompson. Okay.
Mr. Levin. In the zero, like substance abuse and mental
health services and----
Mr. Thompson. Is there an individual's name on there?
Mr. Levin. No. We will be in touch with you.
Mr. Thompson. Okay, fine.
Mr. Levin. Thank you.
Mr. Herger. Just in answer to that, we in the majority took
some HHS data and made a chart on that, so Mr. Levin, we will
certainly pass on to you what information we have.
[The chart follows:]
MAJORITY OF TANF RECIPIENTS ARE NOT
WORKING FOR THEIR BENEFITS
[GRAPHIC] [TIFF OMITTED] T8687A.000
SOURCE: U.S. Department of Health and Human Services.
* Work Activities as defined in Federal law which includes work and
various other job training and education activities.
Mr. Levin. Will you give us the data that you based the
chart on?
Mr. Herger. Yes, we certainly will.
Mr. Levin. Okay. Thank you.
Mr. Herger. With that, the gentleman from Texas, Mr. Brady,
to inquire.
Mr. Brady. Thank you, Mr. Chairman. I appreciate your
leadership on this issue.
As the Committee and the Congress goes forward in
reauthorizing welfare and continuing its progress, there is
some debate about what has contributed to the progress we have,
the economy is sort of the sole reason we have done well, or
the reforms, the work first approach that has been so much a
part of welfare reform. Can you sort of enlighten the Committee
on which has contributed the most toward reducing our roll?
Mr. Thompson. I do not think there is any question at all.
I think it is the law and the opportunity for States to
innovate at the State level that have been able to reduce the
welfare case levels. The economy certainly helps, but even
though we went into a recessionary period in the last year, we
have seen the cases, they have ticked up somewhat, but it has
been pretty level. It has been the augmentation of the economy
that has been helpful, but it has been basically the reform
package that has required States and individuals to work that
has really made the difference, Congressman.
Mr. Brady. And so for us as we continue, it is important
not to just rely on the economy to help reduce these rolls
further but that we continue that work first education toward a
good job, child care toward a good job, transportation toward a
good job, so that we keep reducing those. We know a lot of the
cases we have now are a little tougher situations. They do not
have the family infrastructure you might have had in those
circumstances so that we provide flexibility but we do not back
off from work first and just rely on the economy or something
else to make this progress continue.
Mr. Thompson. I think that would be a terrible mistake. We
have seen a program that is working. It has probably been one
of the most successful programs to change social habits in the
last 50 to 60 years in America, and it is based upon the
component that people have to work in order to get out of
poverty.
Mr. Brady. You bet.
Mr. Thompson. And I think it would be a terrible mistake to
turn this into an education bill, and I hope that that does not
happen. I think the work requirement is the key element that is
going to make this a continuation of a successful program.
Mr. Brady. Thank you, Mr. Secretary. I yield----
Mr. Cardin. Would the gentleman from Texas yield for a
moment?
Mr. Brady. Sure.
Mr. Cardin. I appreciate the exchange, and I happen to
agree that the law change 5 years ago was a very major factor
in the success that we have had. I think the economy also was a
factor, and I think everyone would agree that if there are jobs
out there, it helps. But also, the earned income tax credit was
also a factor of Congress in a bipartisan way trying to make
work pay.
There always will be multiple factors, but I think Congress
can be pleased that the law that we passed 5 years ago played a
significant role in accomplishing the results we see today.
I thank the gentleman for yielding.
Mr. Brady. You bet.
Mr. Thompson. Congressman Cardin, you are absolutely
correct, and I would like to echo one thing. You know when you
put the earned income tax credit in conjunction with a State
income tax credit, you have a viable program there that is very
helpful to individuals who work and that is very important.
Mr. Levin. Will the gentleman from Texas yield for another
30 seconds?
Mr. Brady. Just reclaiming my time for a moment, I was not
here in 1996. I came to Congress the year after. But I knew
something was done right when last year or the year before
during all the Presidential elections, we had the conventions
of both parties on prime time TV every night and every speaker
talked about the success and progress of welfare reform,
whether they were Republicans or Democrats. You know when
everyone is taking credit for something that we must have been
on the right track.
Mr. Thompson. It made me feel very good.
Mr. Levin. Will the gentleman yield?
Mr. Brady. Not at this time. Mr. Chairman, I would yield
back my time.
Mr. Herger. I thank you. This concludes our hearing.
Mr. Thompson. Thank you.
Mr. Herger. What, I think, an outstanding way to conclude
is with this, when you have both parties taking credit for
something, you know it must be working well.
Mr. Secretary, I certainly want to thank you for, again,
the leadership you gave back even prior to the 1996 law back in
Wisconsin of really leading the way in this and all your work
working with the Congress, even as Governor of Wisconsin then,
and now serving as we work to fine tune and improve on what is
already an outstanding program. I thank you very much for your
very outstanding and helpful testimony today.
With that, the full Committee of Ways and Means hearing
stands adjourned.
Mr. Thompson. Thank you very much, Mr. Chairman, for your
leadership and thank you all, all the Members on a bipartisan
basis, for your cooperation on this issue, and good luck.
Chairman Thomas. Thank you. The hearing is adjourned.
[Whereupon, at 4:27 p.m., the hearing was adjourned.]
[A submission for the record follows:]
Statement of the Hon. Rob Portman, a Representative in Congress from
the State of Ohio
Mr. Chairman, thank you for holding this important hearing on
welfare reform. Mr. Secretary, welcome, and thank you for coming to
share the President's proposal for building on the success of the
landmark 1996 welfare reform law.
Governor Bob Taft, from my home State of Ohio, supports the general
framework of the President's reauthorization plan. Governor Taft
appreciates the flexibility that the 1996 law has given Governors.
Governor Taft does have a concern that I am told other governors share.
The Administration's proposal increases the transferability of TANF
funds to Social Service Block Grants (SSBGs) to 10% over time, rather
than ensuring the current 10% transferability as authorized in the 1996
welfare reform law.
The 1996 welfare reform law authorized $2.38 billion for SSBGs, and
authorized States to transfer up to 10% of TANF funds into the SSBGs.
The transferred funds are able to be used for work support programs and
services that are tailored to the State's particular needs, such as
adult day care, mental health services, and substance abuse programs,
and in Ohio, are delivered at the county level.
We encourage the Administration to consider maintaining the current
10% transferability of TANF funds to SSBGs throughout the course of the
reauthorization. I look forward to working with the Chairman and
Secretary Thompson on this issue.
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