WORKING TOWARD INDEPENDENCE: THE ADMINISTRATION’S PLAN TO BUILD UPON THE SUCCESSES OF WELFARE REFORM HEARING BEFORE THE COMMITTEE ON EDUCATION AND THE WORKFORCE HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTH CONGRESS SECOND SESSION HEARING HELD IN WASHINGTON, DC, APRIL 9, 2002 Serial No. 107-54 Printed for the use of the Committee on Education and the Workforce 82-130 pdf For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800 DC area (202) 512-1800 FAX: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 ii COMMITTEE ON EDUCATION AND THE WORKFORCE JOHN A. BOEHNER, Ohio, Chairman THOMAS E. PETRI, Wisconsin GEORGE MILLER, California MARGE ROUKEMA, New Jersey DALE E. KILDEE, Michigan CASS BALLENGER, North Carolina MAJOR R. OWENS, New York PETER HOEKSTRA, Michigan DONALD M. PAYNE, New Jersey HOWARD P. “BUCK” McKEON, California PATSY MINK, Hawaii MICHAEL N. CASTLE, Delaware ROBERT E. ANDREWS, New Jersey SAM JOHNSON, Texas TIM ROEMER, Indiana JAMES C. GREENWOOD, Pennsylvania ROBERT C. “BOBBY” SCOTT, Virginia LINDSEY O. GRAHAM, South Carolina LYNN C. WOOLSEY, California MARK E. SOUDER, Indiana LYNN N. RIVERS, Michigan CHARLIE W. NORWOOD, JR., Georgia RUBEN HINOJOSA, Texas BOB SCHAFFER, Colorado CAROLYN McCARTHY, New York FRED UPTON, Michigan JOHN F. TIERNEY, Massachusetts VAN HILLEARY, Tennessee RON KIND, Wisconsin VERNON J. EHLERS, Michigan LORETTA SANCHEZ, California THOMAS G. TANCREDO, Colorado HAROLD E. FORD, JR., Tennessee ERNIE FLETCHER, Kentucky DENNIS KUCINICH, Ohio JIM DeMINT, South Carolina DAVID WU, Oregon JOHNNY ISAKSON, Georgia RUSH D. HOLT, New Jersey BOB GOODLATTE, Virginia HILDA L. SOLIS, California JUDY BIGGERT, Illinois SUSAN DAVIS, California TODD RUSSELL PLATTS, Pennsylvania BETTY McCOLLUM, Minnesota PATRICK J. TIBERI, Ohio RIC KELLER, Florida TOM OSBORNE, Nebraska JOHN ABNEY CULBERSON, Texas Paula Nowakowski, Chief of Staff John Lawrence,Minority Staff Director iii TABLE OF CONTENTS TABLE OF CONTENTS................................................................................................................i OPENING STATEMENT OF CHAIRMAN JOHN BOEHNER, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES.................2 OPENING STATEMENT OF RANKING MINORITY MEMBER PATSY MINK OF THE SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS, EDUCATION AND WORKFORCE COMMITTEE, U.S. HOUSE OF REPRESENTATIVES...................................3 STATEMENT OF HON. TOMMY G. THOMPSON, SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES...........................................................................................6 STATEMENT OF WENDELL PRIMUS, DIRECTOR OF INCOME SECURITY, CENTER ON BUDGET AND POLICY PRIORITIES................................................................................36 STATEMENT OF JASON A. TURNER, VISITING FELLOW, THE HERITAGE FOUNDATION............................................................................................................................38 APPENDIX A -- OPENING STATEMENT OF CHAIRMAN JOHN BOEHNER, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, D.C............................................................................55 APENDIX B –GROUPS THAT HAVE ENDORSED H.R. 3113, THE TANF REAUTHORIZATION ACT, SUBMITTED FOR THE RECORD BY REPRESENTATIVE PATSY MINK, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, D.C............................................................................59 APPENDIX C -- WRITTEN TESTIMONY OF HON. TOMMY G. THOMPSON, SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES.....................63 APPENDIX D -- WRITTEN TESTIMONY OF WENDELL PRIMUS, DIRECTOR OF INCOME SECURITY, CENTER ON BUDGET AND POLICY PRIORITIES.........................75 APPENDIX E -- WRITTEN TESTIMONY OF JASON A. TURNER, VISITING FELLOW, THE HERITAGE FOUNDATION..............................................................................................91 APPENDIX F – SUBMITTED FOR THE RECORD, QUESTIONS FROM MINORITY MEMBERS FOR OF HON. TOMMY G. THOMPSON, SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, SUBMITTED BY RANKING MINORITY MEMBER GEORGE MILLER, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, D.C..............................................103 TABLE OF INDEXES...............................................................................................................126 iv 1 HEARING ON WORKING TOWARD INDEPENDENCE: THE ADMINISTRATION'S PLAN TO BUILD UPON THE SUCCESSES OF WELFARE REFORM ____________________________ TUESDAY, APRIL 9, 2002 U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON EDUCATION AND THE WORKFORCE WASHINGTON, D.C. The committee met, pursuant to notice, at 3:00 p.m., in Room 2175, Rayburn House Office Building, Hon. John A. Boehner, Chairman of the Committee, presiding. Present: Representatives Boehner, Petri, Roukema, Ballenger, Hoekstra, McKeon, Castle, Johnson, Upton, Hilleary, Ehlers, Biggert, Tiberi, Osborne, Miller, Kildee, Owens, Mink, Roemer, Scott, Woolsey, Rivers, Hinojosa, Tierney, Kind, Kucinich, Holt, Solis, Davis, and McCollum. Staff Present: Stephanie Milburn, Professional Staff Member; John Cline, Professional Staff Member; Kate Gorton, Professional Staff Member; Travis McCoy, Legislative Assistant; Paula Nowakowski, Staff Director; Sally Lovejoy, Director of Education and Human Resources Policy; Jo-Marie St. Martin, General Counsel; Scott Galupo, Communications Specialist; Patrick Lyden, Professional Staff Member; Deborah O. Samantar, Committee Clerk/Intern Coordinator; Charles Barone, Minority Deputy Staff Director; Mark Zuckerman, Minority General Counsel; Maria Cuprill, Minority Legislative Associate/Labor: Ruth Friedman, Minority Legislative Associate/Education; James Kvaal, Minority Legislative Associate/Education; Maggie McDow, Minority Legislative Associate/Education; Joe Novotny, Minority Staff Assistant/Education; Peter Rutledge, Minority Senior Legislative Associate/Labor: Michele Varnhagen, Minority Labor Counsel/Coordinator; Daniel Weiss, Minority Special Assistant to the Ranking Member. 2 OPENING STATEMENT OF CHAIRMAN JOHN BOEHNER, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES Chairman Boehner. We are hearing testimony today on the administration's proposals for welfare reform. Under committee rule 12 (b) opening statements are permitted by the chairman and the ranking minority member of the committee. Therefore, if other members have opening statements, they will be included in the hearing record. And with that, I ask that the hearing record remain open for 14 days to allow members' statements to be submitted for the hearing record. Without objection, so ordered. Let me say good afternoon to you, Mr. Secretary. Thank you, Mr. Miller, and all my colleagues, and our audience. I extend a warm welcome to you. I want to thank you very much for being here to show your interest and assistance. Many of us on this committee remember the heated debates Congress had over welfare reform in 1996. After President Clinton signed the bill into law, some predicted it would have disastrous results. One of our former Senate colleagues said, and I'll quote, “Those involved will take this disgrace to their graves.'' Well, let's look at what has happened: Welfare caseloads have dropped 57 percent from their all-time high of 5.1 million families in March of 1994 to 2.1 million families in May of 2001, their lowest level since 1968 according to the U.S. Department of Heath and Human Services. Census figures also show that employment by mothers most likely to go on welfare rose by 40 percent between 1995 and 2000. Moreover, since 1996, nearly 3 million children have been lifted from poverty. Census data show that child poverty is now in its longest period of sustained decline since the early 1970s, and the black child poverty rate is at its lowest point ever. One of the myths that welfare reform opponents like to employ is that the reductions in welfare caseloads and child poverty during the late 1990s were a result of a healthy economy, not the welfare reform law. But history shows that this argument simply doesn't hold water; during other long economic booms in the 1960s and the 1980s, welfare caseloads actually rose. The fact is that the '96 reform law's work requirements made the crucial difference in maximizing opportunities for welfare recipients to participate in the workforce. The success of the '96 welfare reform law is beyond dispute. Indeed, an editorial in yesterday's New York Times called it, and I'll quote, “an obvious success.'' The challenge for this Congress is to build on that success by putting more Americans on the path to self-reliance when 3 the law is reauthorized this year. While it is true that the '96 reforms significantly reduced welfare caseloads, we still have work to do. A majority of TANF recipients today are still not working for their benefits. According to the Health and Human Services Department's Third Annual Report to Congress, 58 percent of TANF adult recipients are not participating in work activities as defined by federal law, which includes work and other various job training and education activities. In addition to strengthening work requirements, we recognize how essential it is for welfare families to have access to appropriate childcare. The bill this committee will consider in the coming weeks will reauthorize and improve the Childcare and Development Block Grant. President Bush recently released his blueprint for the second phase of welfare reform, which aims to help more welfare recipients achieve independence through work and strengthen families. Secretary Thompson is here today to testify about that proposal. As this committee prepares to consider legislation to reauthorize the 1996 welfare reform law, which Subcommittee Chairman Buck McKeon and I will introduce today, I look forward to a spirited debate. We all share the same goal, and that is to help more people move into productive, independent, and self-sufficient lives. With that, I yield to my friend and my colleague, our distinguished Congressman from California, Mr. Miller. OPENING STATEMENT OF CHAIRMAN JOHN BOEHNER, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, D.C. – SEE APPENDIX A Mr. Miller. Thank you, Mr. Chairman. I'd like to welcome Mr. Secretary to the Committee this afternoon and I will be yielding my time to Congresswoman Patsy Mink, who is the ranking member of the subcommittee. OPENING STATEMENT OF RANKING MINORITY MEMBER PATSY MINK OF THE SUBCOMMITTEE ON 21ST CENTURY COMPETITIVENESS, EDUCATION AND WORKFORCE COMMITTEE, U.S. HOUSE OF REPRESENTATIVES Mrs. Mink. Thank you very much, Mr. Miller. On behalf of the ranking member of the full committee and certain members of my subcommittee on this side and all of the minority members of the committee, I, too, want to join in welcoming the Secretary for this opportunity to discuss with you the many pertinent issues that we feel are still very much under discussion when we take on the responsibility of reauthorizing the Temporary Assistance to Needy Families Program. 4 I would like to first of all, Mr. Secretary, call to your attention the bill, H.R. 3113, that I introduced last year. It now enjoys 88 co-sponsors in the House and it has been endorsed by more than 80 organizations all across the country. This represents not only the welfare community organizations but also well-known organizations like the BPW, YMCA, Communication Workers, and so on and so forth. I'd like to put on the record to include at this point the list of not only the co-sponsors but the list of organizations. GROUPS THAT HAVE ENDORSED H.R. 3113, THE TANF REAUTHORIZATION ACT, SUBMITTED FOR THE RECORD BY REPRESENTATIVE PATSY MINK, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, D.C. – SEE APENDIX B Mrs. Mink. H.R. 3113, Mr. Secretary, was the product of grassroots recommendations and the product of many, many hearings all across the country in which these organizations took testimony, particularly from recipients and recipient families, with respect to what they felt needed to be improved in terms of the TANF legislation. My bill seeks to make a real path from welfare to true self-sufficiency. As to the relevant matters before this committee, we feel strongly that education and training is the major way to provide economic security for families who are in this specialty category. Therefore, Mr. Secretary, I'm quite dismayed that so many of the suggestions for reform by yourself and by the administration do not go to the central issue of how to improve the families and their future by emphasizing the importance of education to this responsibility. The President took great initiative by promoting H.R. 1, Leave No Child Behind, where we worked together for over a year and produced legislation which you were all able to sign and support, and it seems to me that if we are going to advocate a notion of leave no child behind and doing that through education and accountability in educational systems, then we have to adopt that same principle with respect to families who are on welfare and who are still in need of support. Education is our primary difficulty with the current bill, because it only allows one year of educational training. The legislation that we have submitted calls for the encouragement of persons on welfare to engage themselves in the full display of educational opportunities so that they can uplift themselves, their families, and their children to the full strength of economic security and opportunity which there is in America, and we feel that the TANF legislation ought to do this. The first thing is to allow it as a work activity and then to stop the clock while that activity is in full progress, so that people can get nursing degrees, teaching degrees, become professionals and so forth. So we think that in this committee that's the major issue that we should be facing. Now the proposal of the President and your administration is to go in the opposite direction by requiring 40 hours of work by the recipients, 16 of which could be in education and 24 in full work activity. We feel that this increase of the 40 hours is a gross mistake and to couple it with 5 acknowledgement that education is valuable we think misses the point entirely. There are many other areas that go to the notion of what is important in America. We think that middle-class families, upper middle class, and the rich have always had a sense of pride when women have decided on their own, even though they have high-paying jobs and professional careers, to become mothers and have the responsibility of taking care of their children, to decide for themselves to stay home and to rear their young children until they are of school age. We think that this is a philosophy that should be sustained when they deal with welfare recipients as well. Therefore, one of the major points that we make in our legislation is directed towards the responsibility to allow mothers to stay at home and care for their children. And certainly we think that is something that puts the child first and to allow the parents to nurture and raise their own children is a very important principle for welfare recipients. The other areas have to do with drug treatment, to allow drug treatment to be a work activity that allows the clock to stop. There are numerous other things, Mr. Chairman; I would like to add to the summary of my legislation at this point. I urge the administration to have an open mind in considering a number of these points that many of us feel are very, very important and go to the dignity and respect that we feel that these individuals who find themselves in misfortune have the right to expect their country to extend to them. Thank you very much, Mr. Secretary. Secretary Thompson. Thank you. Chairman Boehner. I would like to yield to my colleague and vice chairman of the committee, Mr. Petri, for purposes of introducing us to the former governor and now the Secretary. Mr. Petri. Thank you very much, Mr. Chairman. It's an honor for me to have an opportunity to present someone who I think you have all met a number of times already but the most distinguished constituent, former governor of Wisconsin, Secretary of Health and Human Services. It is appropriate at this time that our nation has the leadership of Tommy Thompson in this important role because as governor of our state, he led the nation in reforming welfare through a bill that we called W2; Welfare to Work. To do that, he had to not only reinvent the incentives of the program at the state level but also battle here in Washington for waivers so that he could do something different and innovative. I think it is particularly noteworthy that in the administration’s proposal, which the Secretary will be presenting to us today, there is enhanced labor authority, so that our nation can benefit from using the states as laboratories of not just reform but also to deliver innovative and improved services to the people which provide increased opportunities. 6 Secretary Thompson has put his efforts into practice by providing more opportunities for people through helping them to get health care they would not have it otherwise and a number of other programs. We look forward to your testimony today. Chairman Boehner. Mr. Secretary, welcome. You may begin. STATEMENT OF HON. TOMMY G. THOMPSON, SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Secretary Thompson. Thank you very much Mr. Chairman, Congressman Miller, my very good friend and colleague, Congressman Petri, Congressman Kind and other members of this wonderful Committee. I'm very honored, Mr. Chairman, to appear before you today to discuss the next phase of welfare reform. Chairman Boehner, your bipartisan leadership of this committee rightly earns you high marks. And, Congressman Miller, thank you for your years of leadership. I'm confident that we will work together to find common ground on the next phase of welfare reform. Over the past five years welfare reform, as the Chairman has indicated, has exceeded our most optimistic expectations. The 1996 law dramatically shifted national welfare policy by promoting work and encouraging personal responsibility, discouraging unwed pregnancy, and supporting marriages. States were given unprecedented flexibility in the design and implementation of their welfare programs. Families were given the help that they needed to transition from welfare to working. And underlining all of these changes, we restored a central principle that has long been lost, that welfare assistance was designed to be temporary and help families in crisis and that dependence and poverty were not and should not be permanent conditions. Welfare was fundamentally reformed, and as a result, nearly 7 million fewer individuals are on welfare today than in 1996. Two point eight million fewer children are in poverty. Minority children raised from poverty levels has increased dramatically. These things have occurred in large part because welfare has been transformed. 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 levels since 1979. Overall, child poverty rates have declined from 20 percent in 1996 to 16 percent in 2000. The poverty rate among African-American children declined from 40 percent to 30 percent, the lowest level on record, and the poverty rate among Hispanic children declined from 40 to 28 percent, the largest four-year drop on record.