TYPE: COMMITTEE HEARING

LENGTH: 19210 words

COMMITTEE: SENATE FINANCE COMMITTEE

HEADLINE: U.S. SENATOR MAX BAUCUS (D-MT) HOLDS HEARING ON WELFARE REFORM ISSUES

SPEAKER:
U.S. SENATOR MAX BAUCUS (D-MT), CHAIRMAN

LOCATION: WASHINGTON, D.C.

WITNESSES:

SECRETARY TOMMY THOMPSON, DEPARTMENT OF HEALTH AND HUMAN SERVICES
ROBIN ARNOLD WILLIAMS, EXECUTIVE DIRECTOR, UTAH DEPARTMENT OF HUMAN SERVICES
RODNEY CARROLL, PRESIDENT AND CEO, WELFARE-TO-WORK PARTNERSHIP

BODY:

 
U.S. SENATE FINANCE COMMITTEE HOLDS A HEARING ON WELFARE REFORM

MARCH 12, 2002
 
SPEAKERS:
U.S. SENATOR MAX BAUCUS (D-MT)
CHAIRMAN
U.S. SENATOR JOHN D. ROCKEFELLER IV (D-WV)
U.S. SENATOR THOMAS DASCHLE (D-SD)
U.S. SENATOR JOHN B. BREAUX (D-LA)
U.S. SENATOR KENT CONRAD (D-ND)
U.S. SENATOR BOB GRAHAM (D-FL)
U.S. SENATOR JAMES JEFFORDS (I-VT)
U.S. SENATOR JEFF BINGAMAN (D-NM)
U.S. SENATOR JOHN KERRY (D-MA)
U.S. SENATOR ROBERT TORRICELLI (D-NJ)
U.S. SENATOR BLANCHE LINCOLN (D-AR)
 
U.S. SENATOR CHARLES E. GRASSLEY (R-IA)
RANKING MEMBER
U.S. SENATOR ORRIN G. HATCH (R-UT)
U.S. SENATOR FRANK H. MURKOWSKI (R-AK)
U.S. SENATOR DON NICKLES (R-OK)
U.S. SENATOR PHIL GRAMM (R-TX)
U.S. SENATOR TRENT LOTT (R-MS)
U.S. SENATOR FRED THOMPSON (R-TN)
U.S. SENATOR OLYMPIA SNOWE (R-ME)
U.S. SENATOR JON KYL (R-AZ)
U.S. SENATOR CRAIG THOMAS (R-WY)
 


*


BAUCUS: Good morning and welcome to the first Finance Committee hearing of the year on TANF reauthorization. Mr. Secretary, we welcome you and thank you for much for...

THOMPSON: Thank you.

BAUCUS: ... coming to join us today. The 1996 welfare reform law was a landmark, a bold experience to end a failed system, to try something new. I strongly supported it then and, as we look back, I think it was the right thing to do. This year the TANF law expires and we need to reauthorize it. That's one of my priorities for the finance committee over the coming months. Looking forward to working with my good friend, Senator Grassley and the rest of the members of the committee to develop bipartisan legislation. I'm also looking forward very much to working with Secretary Thompson...

THOMPSON: Thank you.

BAUCUS: ... and with the administration, particularly you, Mr. Secretary, who are, really, the father of this wonderful change. And that the changes that's, by and large, worked pretty well and we might (ph) explore with you how we continue to make it work. There is no one in the administration who is a better representative to work on these issues than Secretary Thompson. The secretary has a tremendous amount of experience and expertise in welfare policy. As we start down the path toward reauthorization, I'd like to share some of my own views on TANF program and what we've learned. Under welfare reform, millions of Americans left welfare for work just as we intended. States have done a remarkable job and I'm glad we have a State administrator, Robin Arnold Williams of Utah here to testify to that. We learned that states know something about how to get people into jobs. Child poverty is also down, despite the fears of the critics.

However, it's not down by as much as the welfare roles are. We've learned that getting a job isn't always the ticket out of poverty. And that points to one issue I'd like to focus on this year, namely making sure that parents who are working hard to make ends meet don't have to raise their children in poverty. There are too many families who have left welfare to work and are just barely getting by, always at risk of falling back into welfare. The recent study in Montana found that even though we have a great record of moving people into jobs, only 10 percent are economically self-sufficient. We need to do better. Welfare reform in 1996 was about requiring work. Welfare reauthorization in 2002 should be about supporting work. That could mean a lot of things. As we hear from our witnesses today, I hope to learn more about what has been important in getting us this far down the road.

That will help us make sure we build on the success to date. And here are a few things that make sense to me. First, increase funding for child care. Low income parents who work must have the child care they need. If people work at night or on weekends, child care should be available so they don't have to leave kids at home alone. And child care must be of high quality. No parent should have to spend their workday or work night worrying that their child may not be in good hands. The administration's proposal to increase weekly participation requirements by 33 percent without any new child care funding causes me to be concerned. Second, extending and improving transitional Medicaid coverage for those who leave welfare for work. No one should lose their health care just because they take a job. We need to make sure that signing up is easy.

Senator Breaux has a good bill on this already, and I plan to work with him on it. While I appreciate that the administration included a one-year extension of TMA in their budget, that is transitional relief, I believe that it is simply not enough. Third, let low income working families keep more of their children, excuse me, keep more of their child support payments. I know both the administration and Senator Snowe have proposals there and I look forward to talking to them more about it. These payments can both help the family put food on the table and improve how a non-custodial father relates to his child. It's a win-win. Fourth, I know there's a lot of talk about including marriage promotion as a part of welfare reauthorization. In my view, we should proceed with caution. Marriage is a wonderful institution. I myself am happily married. I recommend it. But it is also a personal decision. It's a private choice. We need to think carefully about government interference.

Finally, there's one aspect of the president's reauthorization proposal that does not make any sense to me and I hoping that the secretary can clarify it. The administration has proposed ending all current TANF waivers. Montana has designed a very good welfare to work program under our waiver. It has worked well for the state and we want to improve it, not end it. I look forward to hearing more from the secretary about how state flexibility might be in jeopardy under this proposal. Before I close, I'd like to add that I'm very proud of our work here in the Finance Committee last year to make the extended child tax credit partially refundable. It will lift as many as 500,000 children in low income working families out of poverty. That's an example of what we can achieve when we work together. Senator Grassley and I, along with the administration and the House put that together -- and I might add Senator Snowe was a great aid -- and as representative of how I'd like to see us proceed as we take up welfare reauthorization. Thank you, Mr. Secretary. I appreciate your joining us here this morning. Look forward, as I mentioned...

THOMPSON: Thank you.

BAUCUS: ... to working with you. And I really mean that. And I know you mean, know I mean that.

THOMPSON: I know that.

BAUCUS: And I appreciate that along with ranking member of the Committee, Senator Grassley, who I know I can speak for him and says, and will say exactly the same thing. We want to do this together. And I appreciate again, all that you've done, served our country so well, the state of Wisconsin so well. And we appreciate all the years of service that you've given to the American people. I'd like now to turn it over to Senator Grassley.

GRASSLEY: Thank you, Mr. Chairman, particularly for holding this hearing during the month of March, getting a jump-start on the time that it's going to take to get this legislation through as the present legislation expires this year. And obviously, we're proud to have a person like Secretary Thompson in the driver's seat on this issue for the administration. Because he was very integral to the establishment of the existing legislation of 1996 because of his work as Governor and the trail that he blazed there for reform with, in what any Governor in the state could do at that time under a more restrictive federal legislation. Today's hearing on welfare reform marks the first hearing on a very important program and the first that Congress has held since the enactment of the sweeping reforms nearly six years ago. Those reforms, as we know, ended a 60-year-old program and ended welfare as we knew it.

States have excelled in transforming welfare into work. Our expert witnesses will describe how states become laboratories of change and created modern and very dynamic state work programs. Today no two programs look alike or act alike accept in their pursuit of four over arching goals set forth in the '96 legislation. Teams of leaders around the country have discovered innovative approaches to creating jobs for low-income workers. As a result, quality of life for millions of American families has greatly improved. Though programs facilitating work and job placement, through these programs, millions of adults are now experiencing the dignity of holding a job. The personal gains are greater than the financial ones. In my state of Iowa, most of my constituents who leave welfare do so because of increased earnings.

But the advantages of work over welfare are very important to note. Iowans leaving welfare say that work not only yields financial gains, but it has also helped improved self-esteem, independence and a sense of responsibility. Some say that it even provides new opportunities to socialize. What's more, Iowans who leave welfare report that there are better parents while employed and that the families generally get along better when the parents are employed. Finding high quality child care is among the greatest challenges facing these new working parents. But 91 percent of the parents who leave welfare report being satisfied with the quality of their child care arrangements. Economically, welfare to work is paying off. The majority of Iowa families leaving welfare are living above the federal poverty level and many of these same families report that their standard of living is better now than while on welfare. Nationally, child poverty is at an all time low.

I commend the president for focusing on child well being by insisting that improved child well being be added to the over arching purposes of new welfare legislation. It would, however, be naive to say that there isn't room for improvement. Indeed, much more work can be done to support working families. Single mothers, in particular, have proven that they can excel in the work force. But many working women have yet to realize their full earning potential.

I'm especially pleased to have our honorable secretary here to talk about both the results of the first years of TANF, as well as a vision of this next phase. Our goal in reauthorizing the reform act should be to build on the success. To do this, we must first learn all we can from those who have delivered results, particularly state officials. In my view, the collaboration between the states and our Congress in '96 was integral to the successful reform process. And we should again put our heads together and work for that common goal. Given the time constraints of this year, Congress needs to get right to business. I accept Chairman Baucus' offer to work together on legislation.

END

GRASSLEY: For guidance in my part of negotiation, I want to look to the principles set forth by the president and by you Secretary Thompson as the policies advanced by the Governors, as well as the policies advanced by the Governors and other important state holders. For one, we should continue to cultivate a strong work ethic among our welfare system. We should further encourage state innovation in meeting welfare reform goals through continued state flexibility. And we should improve our policies around strengthening families and providing opportunities for work and education. Strong families and educational opportunities are important ingredients to achieving economic stability. Because we find in every analysis and all the statistics of poverty, that however many reasons there might be in this country for people being in poverty, there's two that stand out very prominently.

And one is single parenting. And the second one is lack of education attainment. So as we work on the institution of marriage and as we work on people educating themselves and improving their abilities to earn more, we're going to solve the two basic elements of poverty. So I hope to work closely and collaboratively with Senator Baucus so that the Finance Committee can produce strong bipartisan products in the coming months and move more people to be independent and to be better, productive citizens and to earn more and have a better quality of life. I am confident that the next phase of welfare reform can be at least as successful as the first.

BAUCUS: Thank you very much, Senator. That's a good statement. Secretary, we'd now like to hear from you if you have some comments you want to make.

THOMPSON: First, let me just start out by thanking you all. Thank you, Senator Baucus, Grassley and Rockefeller for being here, for holding this hearing. And thank you both for, Senator Baucus and Grassley, for your wonderful comments and your spirit of bipartisanship. This is a subject that, if we can't a bipartisan bill on this subject, I think we should all decide that maybe we should be doing else, or do something better. But I just think that this is one area that we've got a great opportunity to develop a bipartisan bill that's going to be helpful to go to the next plateau to help people. So I thank you so very much. Chairman Baucus, you and I share a love of Harley Davidson motorcycles, a fine Wisconsin product, I might add. And we also share a deep concern for helping families go from welfare to work. Senator Grassley, your support for transforming welfare has been tremendous and I thank you so much for it. Senator Rockefeller, your leadership on this subject is also noted and very much appreciated. Over the past five years, welfare reform has exceeded our most optimistic (inaudible)...

BAUCUS: Mr. Secretary, do you mind pulling that microphone a little bit closer to you?

THOMPSON: Sure.

BAUCUS: We're having a little bit of trouble up here. Thank you very much.

THOMPSON: The 1996 law dramatically shifted national welfare policy by promoting work, encouraging personal responsibility, discovering out of wedlock pregnancies and supporting marriages. States were given unprecedented flexibility in the design and 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 seven million fewer people 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 remained trapped in a web of dependency and despair. So now it's time for us to take the next bold step in reforming welfare. And the president's proposal shows us the way. The president's priorities include strengthening work requirements, promoting strong families, giving states more flexibility and showing compassion to those who need. These goals have been central to the administration's proposal 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 fought for as Governor of Wisconsin and one that the president and I remain committed today as we continue to reform welfare. Now let me move on to discuss the TANF program. TANF has moved millions of people from welfare to work. Employment among single mothers have 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, as you said, Senator Baucus, much remains to be done.

And states still face many challenges. Our proposal seeks $16.5 billion for block grants to states and tribes, an additional $319 million each year for supplemental grants in order for states that have experienced high population growth and had historically low funding levels be able to achieve parity. At the same time, we will continue the current maintenance of effort requirements 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 five years the policy permitting the transfers of up to 10 percent of 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-sufficiencies. 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 also allow substance abuse treatment, rehabilitation or work related treatment for up to three months within any 24 month period. And we will also gradually increase the minimum participation rate requirements of five percent per year. Also recognizing 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 TANF tribal 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 over arching 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 marriage 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, two to three times more likely to use drugs, experience educational, health and emotional problems and be victims of abuse. Thus, it is simply common sense to redirect our policies to encourage the formation and maintenance of healthy marriages, especially when the children are involved.

We will also redirect $100 million from the current law on the 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. Funds will be matched dollar for dollar and TANF funds may be used to meet this matching requirement. We will reauthorize the abstinence education grant program to states and territories at $50 million per year. We will establish new state program integration waivers to permit states to integrate welfare and work force development programs in order to improve the effectiveness of these programs. Broad flexibility to design new strategies and approaches will be provided as well. Child support is an equally critical component of the federal and (ph) 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 also in child support collections. The number of paternities that have been established or acknowledged has reached almost one point six million in fiscal year 2001 alone. A record of nearly $19 billion dollars 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 must be done. Our proposals are targeted to increase collections to families by nearly one and a half billion dollars over five years beginning in fiscal 2005. In another similar proposal to increase support that reaches families, states would be given the option to adopt simplified distribution rules under which all support collected would be able to be sent to families that have transitioned from welfare.

This proposal would increase collection to families by $810 million over five years and eliminate the need for states to explain and support complex distribution systems. 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 owing $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 non-custodial parent by requiring states to review and adjust child support orders in TANF cases every three years, reinstating a pre-welfare reform policy. As to child care, in 1999, 20 million families in the U.S. 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 experience as Governor of Wisconsin, access to child care assistance can make a critical difference in helping low income families to find and 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, there's several billion dollars more money that is available for child care and related services for children. Funding available through our child care programs in TANF transfers alone will provide child care assistance to an estimated two point two million children in fiscal year 2003. This is a significant increase over the numbers served just a few years ago. 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 as well as the quality of care.

Along with state flexibility, parental choice is still a key element of a successful child care program. Families must be allowed to choose that 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 proposal I bring before you today and members contains several essential principles as well as proposals that flow from them. What binds them together is the desire on a bipartisan basis, I might add, to improve the lives of the families protected by America's social safety net. I look forward to working with you, Mr. Chairman and all members of this committee to that end. And I know we will be successful. I now would be happy to answer any questions that you might have.

BAUCUS: I appreciate that, Mr. Secretary. I think a question a lot of people have is with the work participation requirements increased by a third from 30 hours to 40 hours a week and with no additional funding recommended for the program overall there's a great concern that it's, that there's just insufficient resources to get people, in fact, to working at good paying jobs. It's going to put a strain on child care, for example, a strain on other services to help people either at job training or payments to a recipient so that they're getting an income or looking toward a job. And I just -- it just doesn't seem to me how we can get this all put together. That is, how we can make sure there's more child care available and more people actually working.

And working with good paying jobs. Because it's a problem here with the 16 mil increase in recommended funding level here and the transitional recommendation is only for one year. The administration only recommends for one year. So I'm just curious how in the world, given the ambitious goals that the administration is setting, can we achieve them without the resources?

THOMPSON: Thank you so very much, Mr. Chairman. Let me quickly go through what we're trying to do. First off, there's no question that child care is absolutely essential. It's something that I believe passionately about. Well you have a limited amount of resources, so you have to put together a budget and you have to put together a TANF program. And this is what we were able to afford. Now saying that, is there enough money there? I believe there is and I'll tell you why. You have $2.7 billion in mandatory money, $2.1 billion in discretionary. You're able to move 30 percent of the TANF grant, which is 16.5 billion or an additional $5.1 billion. On top of that, you can, you can move money from the social services block grant fund into child care.

And on top of that, under the old law, you were able to reduce your workload by one percent for every reduction of one percent in the caseload. We have carried that over to the first year so those states that have reduced down to five percent, you will only have to meet five percent of your caseload. And then 50 percent of the credit into your second year. So there are upwards to $17 billion available if you use all the social service block grant money, if you use the 30 percent flexibility in the TANF money, if you use the employment credit, the reduction. And with that, with the reduction of 50 percent of the caseload and only two point eight million cases left on the, on the TANF cash assistance, I think that there's enough money there available to establish ...

BAUCUS: So your point is that with the reduced number of people on assistance essentially those will free up enough dollars to meet the administration's higher standards, that is the work week plus -- well, there's another one, too. I've forgotten what it is. But you think that's where you make up the difference?

THOMPSON: That is, that is. Plus the increased flexibility, plus the availability in moving 30 percent of the TANF dollars into child care ...

BAUCUS: But that's ...

THOMPSON: ... and some money in the social service ...

BAUCUS: But that's not new, though, is it? I mean, ...

THOMPSON: That's not new, but you have a reduction in the cases. And you also have the 100 percent employment credit that you're going to be able to use and 50 percent of the credit in the second year.

BAUCUS: Well it's something we ...

THOMPSON: It gives you immediate flexibility.

BAUCUS: It's something we're going to have to explore. Because it's just (inaudible) flesh all this out. First -- I also want to commend you very much for your very wise decision in the beginning of your opening statements to make it clear that all these jobs are going to be at least minimum wage jobs.

THOMPSON: Thank you.

BAUCUS: There was a little dust up over that, as you know. And we're just ...

THOMPSON: I know there was. There should not, there should not have been.

BAUCUS: I also appreciate some emphasis on tribes, Indian tribes.

THOMPSON: Yes.

BAUCUS: In my state, 50 percent of the rolls are tribal members and it's -- we have seven reservations and a total population, Indian population, is much lower than the -- and proportionately. And I urge you just to work hard in that regard because the demands are different, the needs are different, the cultures are different. And the needs are great. I want to work with you on that and just how we can help get better administration of this program, frankly, with the tribes.

THOMPSON: Mr. Chairman, we went around the country and held eight hearings. One of the hearings was held on a, with Native Americans. And one of their, one of their requests were technical assistance to be able to help set up quality TANF plans on the reservations. And that's why we put in this dollars in order to accomplish that.

BAUCUS: One final point here is your sort of, you know, corrective compliance plan. And I think (ph) really the question is why a penalty on states for not achieving much higher standards when they've already done a pretty good job without such a same kind of penalty? I'm just concerned as we're -- the standards here are so high and again, in my judgment, without sufficient resources, that it's -- we're going to start to push on something here that's going to get a little -- (inaudible) round peg in a square hole. Or it's just -- things are just not in sync here. So why are we going to penalize states for not meeting such high standards?

THOMPSON: The only reason is we really want this to work. We want the states to really take an earnest interest in removing and assisting individuals off of dependency and to, and to employment. We think it's something there if you feel strongly about it, it's not, it's not a big ...

BAUCUS: I'll say, characterize it as a corrective compliance plan that the administration may not enforce. I mean, it just seems to me that we're either going to do something or we're not going to do something.

THOMPSON: But the truth of the matter is, you know, there's a lot of questions about the 40 hour week. But when you look at the job employment credit that we're going to carry over and give 100 percent, that states like Montana that are reduced, I believe, 50 percent ...

BAUCUS: That's right.

THOMPSON: ... fifty percent of their caseload, the state of Montana will only have to really, the first year, meet five percent with that employment credit taken (ph) over. The next year they would have to meet 40 percent. And the third year, 35 percent. And the fourth year, up to 60 percent.

BAUCUS: Well my time's expired. We can explore this further, but (inaudible) best appreciate the thrust direction (ph) you're going in, but, again, I'm not sure we have the resources to do this.

GRASSLEY: Can ...

THOMPSON: Thank you.

BAUCUS: Mr. Grassley.

THOMPSON: Thank you very much, Senator.

GRASSLEY: I may have some easy questions for you, but they're meant to bring out some aspects of the president's proposal that were meant to take shape. And maybe in the last one, but haven't, and so the president has particular emphasis upon them. And the first one I'm going to speak about is the marriage situation and that part of the program. Could I also thank you for your clear vision, though, that you bring to this year's welfare reform debate? You leadership and expertise is greatly needed, but it builds on what you've already shown as Governor. Because we have to have as our goal to build upon successes achieved thus far after six years for our next phase of reform to be equally as successful and hopefully, even more successful than our first phase.

So that brings me then to a stronger focus on strengthening families and the new emphasis upon child well being. These are very important ingredients of improving the welfare reform measures. So could you please elaborate on the family formation part of the administration's proposal? Describe how this section differs from the more traditional form of welfare, such as job training and cash assistance. And what can families who are in welfare, then, expect to gain by participating in the family formation activities once they seek opportunities to leave welfare through the work program?

THOMPSON: There are two programs, Senator Grassley. The first program, you take the $100 million that was set aside for reducing illegitimacy. And you take that money and you put it into a demonstration program so that communities -- and they have not been defined yet -- but communities or regions can apply for this money. Seventy-five million dollars to set up a demonstration program to help couples first, stay together. And if couples are contemplating marriage, give them counseling on marriage. Give them counseling on raising children. Give them counseling if there are problems with gambling, alcohol, drug abuse, anger, be able to do that, in order to establish a marriage.

We do not want to force marriage. We do not want to put people into an abusive situation. It's only those individuals that are contemplating marriage, or in a marriage situation that may be having problems. Be able to set up counseling so that the ultimate good will be able to maintain that marriage unit. But also to be able to make sure that the children are being taken care of and the well being of the children are the utmost concern and the priority of this particular provision. The second one is $100 million, which has to be matched by the states by $100 million. And this would be setting up a state program in those states that want it. To set up counseling programs as far as helping to maintain families and to improve the families in those particular states. So it would be completely discretionary for the states. And the states would have the complete latitude on how they would have to do it. The only requirement we would ask is they have to match the federal dollars dollar for dollar in order to get the dollar from the federal government.

GRASSLEY: I don't disagree with anything you said about marriage. I just want to ask you to, ask you and anybody else, to not be defensive about the institution of marriage. Because, I mean, it's a no brainer. It's proven its value, not only in American society, but in most societies as the foundation ...

THOMPSON: I didn't think I was ...

GRASSLEY: ... for our society.

THOMPSON: I didn't think I was defensible at all..

GRASSLEY: What?

THOMPSON: I didn't think I was defensible at all, sir.

GRASSLEY: No, I don't think you were. That's why I said I didn't disagree with anything -- well, maybe the one part you said about you aren't going to force anybody into marriage. That's a no brainer, too.

THOMPSON: Yes.

GRASSLEY: I mean, you don't do that if you want marriage to be successful. The point being, though, that by saying that you might be a little bit defensive about marriage. And I think it has proven itself. Could I ask you something as it applies particularly to the state of Iowa and maybe other states? But other states I don't know. And that is, the new child support financing changes proposed by the administration that are aimed at increasing the receipt of child support payments by families. I think I understand the importance of that letting particularly fathers be a participant in the support of the family. But in a state like Iowa, we use this money -- we do not pass this money through for payments to families on welfare. So how big of an incentive is there for a state to begin these new practices?

THOMPSON: Well it's really going to be up to the states. But really we have found, Senator Grassley, in a study that was done in Milwaukee that if the non-custodial parent knows that the money is going to his children, his or her children, that they will be more willing to contribute and more apt to make their support payments. And we've found out that each state in all of the studies that have been done, if a state is allowed some additional money to go in there, it will encourage more child support money coming in, which will help the family. And those families that are leaving TANF should be able to get all of those dollars to really help that family, that person or family succeed. So there's two things, while you're still on TANF, this administration proposal allows for an additional amount of money up to $100 or $50 above what the state is currently doing in order to give a direct money to the individual family unit. And once that person leaves TANF, 100 percent.

BAUCUS: Thanks, Senator. Senator Rockefeller.

ROCKEFELLER: Thank you, Mr. Chairman. Mr. Secretary, you testified here as Governor in 1995, didn't you? And you ...

THOMPSON: Yes, I did.

ROCKEFELLER: And that was important. Because that was -- 1996 was when we did a lot of this. And actually I was on the conference committee. I was very proud to be that. But you were -- and I recognize as a leader on innovation in Wisconsin. In fact, you sort of did this before everybody else, I think, to my memory.

THOMPSON: That's correct.

ROCKEFELLER: And you deserve the rich praise that you've received for that. You talk about and the administration's program talks about the importance of state flexibility, the need for resources, child care. Now if you, if you had to kind of review the history of this, do you think that states have been, by and large, creative, innovative in the way they've approached it?

THOMPSON: I think they have, Senator. In fact, I know they have. And the wonderful thing about it is the fact that child poverty has gone down. And that you've been able to allow people to become independent and be able to, I really believe, lead a better life because of that. And they've been able to help steer themselves toward self-sufficiency and out of poverty.

ROCKEFELLER: So that the concept of flexibility rings pretty well with you?

THOMPSON: You know it does, Senator.

ROCKEFELLER: Well, I want to know it does. And I think it does with you. I'm just trying to figure out the administration on this. And at some point, you know, you're, Governor Thompson, you're the messenger for ...

THOMPSON: That's true.

ROCKEFELLER: ... something called the Office of Management and Budget, which has ...

THOMPSON: The super god in our society.

ROCKEFELLER: Yes. That's right. The super god. I share Max Baucus' concern on the 40 hours a lot.

END

THOMPSON: OK.

ROCKEFELLER: In West Virginia, the average employment for state employees is around 37 and a half hours. It's true. And this is Department of Labor figures. The average weekly hours per non- supervisory jobs, which would certainly be what we're talking about here, is 34 hours. Now one can criticize that, or not, but nevertheless those are the facts in a state which has a long and struggling, but distinguished history. So when I look at the, at the 40 hours, which is 24 hours of work and then 16 hours of quote other activities. I'm trying to think of what the consequences are, what the trade offs are when you add those together and what happens, for example. What happens in child care?

Mothers get on buses to go to do what they're going to do. That saves money. They wouldn't probably be able to do this. Child care, you say, gets an increase. But half of that increase, I think, comes out of Head Start, which is, of the child care increase, comes out of Head Start, which is a part day, four hours and part year. So is that really an increase in child care? And I need -- so I've got three questions I've got to ask you. How can states like West Virginia, which are, which are like most states already in huge -- 40 to 50 states are in huge budget surplus, 40 to $50 billion.

THOMPSON: Deficits.

ROCKEFELLER: We've just passed, not with my vote, a tax cut bill which will add $86 million over the next three years onto the budget deficit of West Virginia, almost all of which will come out of Medicaid. Because that's the way it usually works. That'll be against the wishes of my Governor, but he will have no choice, as I see it and as he sees it. So that if you -- how do the states pay for these additional 10 hours?

THOMPSON: First off, I don't know the exact figures in West Virginia, but I am sure that in West Virginia 45 to 50 percent of the welfare caseload has been reduced. And you are able to take that 100 percent credit in the first year. So West Virginia will have, more than likely, the first year where only five to 10 percent of their full caseload will have to meet the work requirement. Second year, 50 percent of that credit. So it's going to be phased in over the first two years. A hundred percent credit the first year, second year will be a 50 percent credit. The second thing that I would like to point out is is that there's complete flexibility for the states to meet this. And what I think is being missed by a lot of individuals is is that it is important when you're dealing with welfare cases to make sure you monitor those cases and counsel those cases.

And what we're, what we want states to do is set up a procedure where the case manager is looking at those particular cases and find out what they're doing. And not only have the work component, but also the additional 16 hours put into some way that that individual can get improvements. Whether it be in job training, whether it be in education, whether it be in counseling for drug or alcohol or anger management. Whatever that case may be. So we want a continuum going on with all of these cases so they're being taken care of. I understand that the states are having difficulty. And I know that West Virginia has got a deficit like a lot of states do. But that's why the transitional and the job credit was placed in there to give states the flexibility for up to, actually, three years to put this procedure in place. And that's why I think it's going to be workable and doable and having everyone of these cases being monitored and counseled is going to be extremely helpful in order to protect them, in order to assist them going from dependence to independence and give them the opportunity to have some extra help in order to achieve that.

BAUCUS: Thank you very much, Senator.

ROCKEFELLER: Let me absorb that and come back on a second round, I hope.

THOMPSON: Sure.

BAUCUS: Senator Lincoln.

LINCOLN: Thank you, Mr. Chairman. And thank you, Mr. Secretary, for joining us today.

THOMPSON: Oh, hi.

LINCOLN: Hi. I'm over here in this -- I'm (inaudible) end of the totem pole down here.

THOMPSON: Senator, how are you?

LINCOLN: Doing fine, thank you. And we're glad you're here. I won't elaborate on the questions or the issue, I think, that Senator Baucus and Senator Rockefeller brought up. But I will reinforce, the freeze on the mandatory child care and development block grant fund over the next five years is in your plan as well as increasing the work requirement from 30 to 40 hours a week is pretty unbelievable. As a working mom myself, you know, to understand what's going to be asked of these working moms, particularly in regard to child care, or particularly the lack thereof. So I just would reiterate that in terms of what's being asked there, I hope that we can work through some of those difficulties.

THOMPSON: We certainly (ph) can.

LINCOLN: Because there is no doubt that for working mothers, child care is essential. And without having any more resources towards child care -- and I understand the 30 percent from TANF and the 10 percent from the other block grant. Just a couple of quick questions, your employment credit, which I've been working with Congressman Levin on an employment credit as well, trying to work with the states and come up with a solution that is going to work. I'd just kind of like to give you an opportunity to describe to us what your employment is and why it's for only three months.

THOMPSON: Employment for three months.

LINCOLN: That was my understanding in your plan that it was, it was a three-month period.

THOMPSON: Well there's three months in which you're going -- every state is going to have the discretion for three months out of a 24 month period in order to be able to allow individuals to get alcohol, drug treatment, intensified job training, intensified education. So that if a person needs that, you know, at the beginning, you could put the individual into a job-training program for up to three months and would qualify for the work participation. Or once that person started working, if that individual needs to leave for a period of three months in order to get further training, that that would still qualify for the job training. And if, in fact, that person needs some alcohol or drug counseling, which a lot of individuals do, be able to put them into an intensified drug rehabilitation or alcohol treatment program for three months would still qualify. So it's that three months out of the 24-month period that would qualify.

LINCOLN: So you would only be able to use three months out of the 24-month period towards that employment credit?

THOMPSON: But you would also still be able to have 16 hours out of every week to be put into job training, job seek, alcohol or drug treatment program, education, as well.

LINCOLN: Sixteen hours?

THOMPSON: Out of every week.

LINCOLN: That's a lot to put towards something like that.

THOMPSON: Well you can, sure. But that's part of the 40-hour work week. And that's -- say 24 hours would be for work and 16 hours would be towards this kind of rehabilitation and treatment. And every ...

LINCOLN: Just hearing from our state though, the description was that 16 hours, that's a lot of time to consume in a program, in those types of programs. I'll just -- I was reading through some of it and I ...

THOMPSON: OK.

LINCOLN: ... wanted to make sure that I had that correct. The other thing that I wanted to bring up was your proposal continuing the supplemental grant on TANF. And I certainly appreciate that.

THOMPSON: (inaudible)

LINCOLN: There's states like Arkansas, it is ...

THOMPSON: Arkansas is going to ...

LINCOLN: ... absolutely essential. But the 319 million in the context of the 16.5 billion block grant really doesn't overcome the disparity between states as we see it, particularly in states like Arkansas and others. I mean, do you, do you feel like that gives us a level playing field in terms of a financial playing field?

THOMPSON: Well as you know, it was phased out after the fourth year in TANF one. And we put it back in for five years in TANF two.

LINCOLN: Right.

THOMPSON: We think it's something that the governors requested. I believe it's the right thing to do. You certainly ...

LINCOLN: Do you think it's enough is my question?

THOMPSON: Well that's, you know, when you have a war going on, you've got homeland security, you've got everybody else doing it. This is the amount of money that we had. You know, you certainly can make an argument that it could be more. You can certainly make an argument that the child care block grant could be increased. But ...

LINCOLN: Well it's not necessarily more in terms of what I, what I'm getting at is the disparity still exists between states.

THOMPSON: The disparity still exists, but this is money that 11 states are going to receive.

LINCOLN: Even (ph) with the grants.

THOMPSON: And we think that, we think that it's what was put in the original TANF bill and we think it's certainly equitable. And we think it is fair.

LINCOLN: And in terms of creating that financial level playing field, you're confident that it does that?

THOMPSON: I am confident that it goes towards a fair field.

LINCOLN: OK. Thank you. Thank you, Mr. Chairman.

BAUCUS: Thank you, Senator. Senator Snowe.

SNOWE: Thank you, Mr. Chairman. And thank you for initiating these hearings to pave the way for reauthorization of this historic act. And I want to welcome you, Secretary Thompson. And you've certainly been an innovative thinker in this department. And with certainly as your previous experience as Governor, in fact, I well recall how we relied on your guidance in developing this welfare reform act back in 1996. Let me begin by exploring the issues of the caseload reduction credit. I understand from the administration's that you'll be phasing that out. Is that correct?

THOMPSON: That is correct.

SNOWE: And what's the underlying philosophy behind that? Because for example, in my state, we've had a higher than national average in work participation rate. But with the increased work participation rate under the administration's proposal as well as increased number of hours to 40 hours a week, that really could be very difficult in meeting that goal because of the significant loss of jobs in our state over this last year.

THOMPSON: Senator Snowe, the reason that we are phasing out the employment credit is is that under the TANF one, the Congress put a limit of 50 percent participation. But with the states doing so well -- because of every percent of caseload reduction, the credit, the credit would go in for one percent. The caseload reduction goes down by one percent. The amount of the 50 percent would go down by one percent. So most states are now down. Like my own state of Wisconsin doesn't have any work requirements whatsoever if we wanted to. Most states are at five percent because they've reduced the caseload by 40 and 45 percent. That reduces that 50 percent now to five to 10 percent.

And so what we're doing, we're saying those states that have done this should be able to use 100 percent of that credit the first year. Because we understand that the jobs are not as plentiful today. So 100 percent of that credit, which would mean even though it's 50 percent -- and if Maine has reduced its caseload by 50 percent, you'd be still down at a zero because you get 100 percent of the credit. Next year, when the percentage goes up to 55 percent, the job credit is 50 percent of that. And so you would be at 25 plus five would be 30. And so that's where, that's why the job credit is sort of phased in. It's phased out. And we're going to go back to the original intention of making sure that at least 50 percent of the people increased by five percent over the course of the five years, that actually states are still working to making sure that those caseloads are going down. That's why the job employment credit is being phased out.

SNOWE: I see. On the issue of child care -- because I see that pivotal to establishing self-sufficiency.

THOMPSON: It is.

SNOWE: And I, and I think that ...

THOMPSON: It's the most important thing.

SNOWE: It is the most important issue. How do you see that in terms of what you have proposed to Congress in providing essentially the same funding for child care and incorporating adolescence? I mean, as we all well know, there are some significant issues with adolescents unsupervised in after school hours. Has that been incorporated especially in developing the plans for, the individualized plans for families?

THOMPSON: Yes it has.

SNOWE: And determining how best to proceed with their case and their needs?

THOMPSON: There is no question, Senator Snowe, that when I started welfare reform, there were four things that you had to do if you were going to be successful. You had to have, make sure the people were covered by health insurance. Two, that they were taken care of as far as child support. Three, that they had transportation. And four, they had training. Those are the four cornerstones of a successful welfare program. We looked at the declining caseload. We're (ph) level funded (ph) the block grant at $16.5 billion for five years. We level funded the child support, $2.8 billion, $2.7 billion on mandatory, $2.1 billion on discretionary. And we're adding in the flexibility, which isn't in TANF one, will carry over into TANF two.

Thirty percent of that block grant of 16 and a half can be put into child care, can be put into adolescent training. And we're also putting money, 10 percent of the money, going into the social services block grant can also be used in this program. And that doesn't even include any money that the states put in there. And with half the caseload, going from four point eight million cases down to about two point four million cases, we think, even though there's not an inflation adjustment, there's adequate amount of money to do the job for child support.

SNOWE: I appreciate that. I know we're continue to look at that issue.

THOMPSON: I know you (inaudible).

SNOWE: Because, you know, it's a difficult one because of the cost of child care and also the availability slot. As we know, there are thousands and thousands across this country who are on waiting lists.

END

SNOWE: Because the unavailability and the unaffordability as well in terms of child care, especially for, you know, newborns, for example. In Maine, they recently conducted a survey and indicated that 42 percent of those who were on TANF in 1997 were unemployed for health care reasons or because of the lack of child care and affordability of child care. I mean, that was the second greatest reason to health care as to why they are currently unemployed. So I see that as typical for the future. And certainly I think that in terms of child care, it's probably going to get worse rather than better when it comes to the availability and the affordability.

THOMPSON: I understand the argument and I know that this is a really an item, concern of yours and many members of the Senate and of the House. And all I can tell you is is that we believe that there is adequate funding at the present time. We're also using the job employment credit phased in over two years that maybe in the third year, there could be an increase in block granting child support. But we think that there's enough money for the foreseeable future.

SNOWE: Thank you. And I applaud your efforts.

THOMPSON: You certainly can make an argument.

SNOWE: Thank you. Thank you, Mr. Chairman.

BAUCUS: Thank you. Mr. Secretary, you know, Senator Lincoln asked a very good question regarding allocation. And if the allocation is based upon low-income children as AFDC was, then as you know, Wisconsin gets five times what, say, Louisiana would receive. Montana would receive one third of Wisconsin. And there are supplemental grants, but that doesn't make up the difference. With a new program, it's not based solely on, you know, low-income kids. We're talking about families and moms and we're talking about efforts to get people working and educated and so forth. I mean, just on the face of it, it sounds like that the program that you and I and all of us are working toward should be based on a state allocation that's a lot more up to date. Doesn't that, just on the face of it, make sense?

THOMPSON: I really am not sure what you're driving at, Senator.

BAUCUS: What I'm driving is looking at the allocations.

THOMPSON: Well, every time you look at an allocation, you know as well as I do that we've been fighting that same fight together on health disparities and reimbursements for Medicaid ...

BAUCUS: Right.

THOMPSON: ... and Medicare.

BAUCUS: Right.

THOMPSON: That every time you start talking about allocation, you take away from somebody else. And it's a, it's a real contested fight. There's no, there's no item gets more ...

BAUCUS: Well that's true in terms of each state and each senator wants the most that he or she can get for his state on a subjective basis. But I'm looking at it on an objective basis.

THOMPSON: OK.

BAUCUS: Just, you know, what seems right? What seems fair?

THOMPSON: All I can tell you is I would be more than happy to work with you, Senator Baucus and Senator Lincoln on the, on the formulas any way that we can get a better (ph) ...

BAUCUS: (inaudible) if I'm asking you, on the face of it, aren't the current allocation formulas a little out of sync with the objections we're trying to reach here?

THOMPSON: I am, I am not ready to come to that conclusion yet.

BAUCUS: Why don't you want to jump into this?

THOMPSON: Because all I want to do is make sure that we get a good bipartisan bill and I know full well that no matter which way I go in that, I can't win, Senator.

BAUCUS: Well I don't know. There are ways you can go.

THOMPSON: I'll work with you and I certainly want to.

BAUCUS: I appreciate that. And one other quick point, and I know Senator Rockefeller wants to ask a question. It just seems to me that we can be performing a great service to our country by putting much more emphasis on child care, both in quantity and quality. It's going to help so much. And I say that partly because of the experience I had with -- I was talking to a young lady who was on welfare. She was determined to get off welfare. Single mom. And just every fiber in her body, she was not going to be on welfare. It just bothered her so much to quote to be on welfare. So she got a job. It was a minimum wage job in Bozeman, Montana. Yet she, to make ends meet, she had slept on her parents' sofa, had a kid. She took her child to a child care. Just tried every way she could to make ends meet. But her child care -- forgotten the exact percentage, right? Thirty or forty percent of her take home. It was high.

THOMPSON: Twenty-five, thirty percent (inaudible).

BAUCUS: Well in her case, it's about that. Yeah, it was about that.

THOMPSON: It could have been.

BAUCUS: She finally had to give up. It just pained her to no end. She couldn't make it. And it just seems to me if we had a little more help for child care and pertaining to quality, too. And another huge component of this is jobs. It's just better paying jobs. And it's minimum wage -- maybe increase minimum wage. Because that is going to go farther than some of the other things we're talking about here is to get people off welfare and working in a productive -- people in our (ph) work force. I just don't know why the administration and all this ...

THOMPSON: Mr. Chairman, ...

BAUCUS: ... placing a greater emphasis on that.

THOMPSON: Mr. Chairman, you're not going to get an argument from me. I believe so passionately in child care that I not only, when I was Governor -- we don't have a waiting list in Wisconsin. Every person in Wisconsin that wants child care is entitled to it and gets it. We set up the program to accomplish that. This is something I passionately believe with you on and I thank you for your passion on it. The problem is is that when you have a situation where your country is at war, both in internationally and homeland security, you have so much money, you look at what you're able to do. That's why we're phasing in the job employment credit over two years to give states a lot of flexibility. And maybe at the end of two years we'll be able to find some additional money for child care. But I sincerely agree with you that child care is absolutely essential to move people from dependency to independence.

BAUCUS: I hear you, but in the state of Montana, your proposal will bring back waiting lists for child care, bring it back. We're going the wrong direction with this, with the administration's proposal. That's the effect of it. You know, I appreciate we're all working together.

THOMPSON: We're all working together. We want to accomplish the same thing.

BAUCUS: (inaudible) I think we've got to spend some time on this.

THOMPSON: I'll look at, I'll look into Montana.

BAUCUS: OK. Just a quick point ...

LINCOLN: Look at Arkansas. We have a large waiting list for child care. A large waiting list.

BAUCUS: Mr. Secretary, these are all the states and there's about 40 percent of them, 30 percent. I didn't count them.

THOMPSON: OK.

ROCKEFELLER: Where there is a child care -- they have an inability to pay child care. There are kids waiting to get child care. So the question that I -- and I have to be short because of the vote -- but, and I agree with you. You keep saying, you know, we're fighting a war overseas, we're trying to secure our homeland is the first job under the constitution, of government. And you're, and you're cash strapped. We're all cash strapped. Our state's in debt. Our government's in debt. And so I guess the question I'm trying to ask is if, you know, if you got this problem and you hear from around the table, or at least a lot of it that we don't have the money to do the child care and that West Virginia is just about, maybe this week, to cut child care because they don't have a choice.

Why then, add on the new requirements from a Governor who specialized in flexibility and letting the states do it in a way -- why be so prescriptive by adding on something which almost makes it mandatory? And I understand you phased all the rest of it, but it's going to increase child care costs. And all you're hearing from around this table is child care, child care, child care. We can't do it. Somebody goes off the caseload, but they've still got to have child care and for years to come. And it's expensive. In fact, it costs as much as a public education tuition. So it's just a question of why the 40 hours when it's more than, you know, the state workers work? You know, why sort of demand, be prescriptive about putting those 40 hours on ...

THOMPSON: But we're giving the states complete flexibility how to set that program up.

ROCKEFELLER: But they ...

THOMPSON: And when we argued for this, when I argued for this program back in '95 and '96, I said set the standards and we will meet the standards. And all we're doing here is setting the standards, allowing the states to set up the programs to meet the 40 hours, 24 hours of which is work. And 16 hours to be set up into training programs, educational programs, treatment ...

ROCKEFELLER: And mentoring programs which can't, ...

THOMPSON: And mentoring programs which are good.

ROCKEFELLER: ... which can't, which are good but can't be done in many rural areas because there's nobody to set it up. I'm just saying why -- I understand the need -- some, you know, there's always sort of the top aspect of welfare.

THOMPSON: There is.

ROCKEFELLER: It speaks to the American people. And I understand that. But there's also the fact of how people live their lives under welfare. And can they make it? And the key to making, one of the keys to making that is, obviously, self-esteem. But the other is child care. And what we're doing is in a sense, against the instincts of the Governor Thompson that I listened to in 1995, I thought, creativity, flexibility, we can do it. No, you're not on the child care waiting list, but my state sure is and there's a whole lot of other states who are today, before the prescriptive 40 hours is put on. And I don't, actually I can't get a question or else I'll miss my vote and I'll be impeached. But the ...

THOMPSON: Please don't.

ROCKEFELLER: Yeah. But as we're working this through, I hope that one of the things that is a fact in this is that you're setting out a standard. If we kind of come to the common conclusion that we can't meet that standard and do justice to people today trying to do the right thing, that we will adjust to that fact.

THOMPSON: I will ...

ROCKEFELLER: I sort of have a feeling that we, that a little bit what you're saying.

THOMPSON: I want to work with you, Senator Rockefeller. I want to come up. I want to be as flexible as possible but still accomplish the objective ...

ROCKEFELLER: Yes.

THOMPSON: ... of moving more people. And allowing for single mothers to be able to have good, comprehensive child care. It's absolutely essential in order for this program to work. And I want to work with you to do it. I think we have set up a program that will accomplish that. You have some questions about it and it's my job to convince you. And we'll -- and I want to work with you in order to accomplish that.

ROCKEFELLER: Convince me and listen.

THOMPSON: I always listen to you, Senator. You're my boss and I know that.

ROCKFELLER: And I've got, and I've got to go vote. The hearing is in recess.

(RECESS)

BAUCUS (?): The hearing will reconvene. OK. I apologize to all participating for the inconvenience of that vote.

In honor of the panel consisting of Robin Arnold Williams, who is the executive director of the Utah Department of Human Services, you've been mentioned many times, I might add all approvingly. Rodney Carroll, president and CEO of Welfare to Work Partnership. And he's located here in Washington, D.C. And Gordon Berlin (ph), senior vice president of the Manpower Demonstrations Research Corporation based in New York City.

Mrs. Arnold Williams, why don't you proceed?

WILLIAMS: Good morning, Mr. Chairman and members of the committee. I am Robin Arnold Williams, Executive Director of the Utah Department of Human Services. Today I am testifying on behalf of the state of Utah and the American Public Human Services Association, a non-profit, bipartisan organization representing state and local human services administrators. And I thank you for the opportunity to testify today. Prior to welfare reform, caseloads were soaring and families were trapped in a pattern of dependency that few believed could be reversed. By the mid 1990's, 48 states, including my own were operating their AFDC programs under federal waiver. Work was the hallmark of early welfare reform experiments.

And by 1996, it became clear that states could achieve success in this area. States agreed to implement the welfare law with fixed block grant funding because TANF afforded them tremendous flexibility to achieve those goals. States have achieved unprecedented success. Employment rates for never married mothers increased by 40 percent over the past five years, reaching an all time high in 2000. Sixty percent of TANF mothers who left cash assistance are holding jobs. The number of children receiving monthly child care subsidies has increased 80 percent. And the number of child support cases with collections has doubled. In implementing welfare reform, states created thousands of new partnerships with business, communities, tribal governments and faith based providers.

In 1993, we received a federal AFDC waiver and we have achieved great success for our families through universal engagement, individualized case assessment, diversion assistance, employment and training and ongoing case management. When the federal law was enacted, we also implemented a 36-month time limit. After an initial 44 percent decline, caseloads began increasing slightly in the fall of 2000 due the downturn in our economy. We saw a six percent increase over the last six months of 2001. We use the universal engagement strategy for all clients receiving assistance, but our ultimate goal for families has been private sector employment through training, ongoing counseling and aggressive job search.

We have not focused our resources on developing community work experience programs or community service. We are particularly proud that in 1999 Utah received a TANF high performance bonus for job placement. And in 2000 we received a bonus for our ability to retain former TANF clients in employment. As Congress considers reauthorization, continued state success is contingent upon four factors. Maintaining flexibility, funding, continuing the focus on work and simplifying related programs. We were (ph) -- APHSA recommends that Congress set broad goals for the reauthorization of welfare reform and afford states the flexibility to supervise their own strategies to meet those outcomes.

We oppose changes in the TANF statute that would require states to abandon their goals or redirect their limited resources to meet process measures, penalties or purposes that are inconsistent with their proven successful welfare reform strategies. APHSA supports continued federal investment in the TANF block grant and allowing for annual inflationary increases. In addition, we would like to see supplemental grants extended and enhanced, full allowable transferability into the child care development fund and into SSBG (ph), restoration of SSBG (ph) to $2.8 billion, a revised and adequately funded contingency fund and no set asides in the TANF block grant. In addition, we enthusiastically support the new flexibility included in the President's welfare reform proposal such as lifting the restriction on unobligated TANF funds, excluding child care and transportation from the definition of assistance and allowing the creation of state rainy day funds using unobligated TANF funds. And we would urge this committee to include these provisions in any reauthorization.

Finally, if Congress mandates new TANF work requirements, new quality standards or new eligibility expansion, then Congress must address the inevitable corresponding need for increased child care funding as we talked about prior. States have demonstrated that they can devise effective welfare to work strategies. Today, 77 percent of families on cash assistance are either in unsubsidized employment or looking for it. Only 11 percent are engaged in work fair activities. We believe that's compelling evidence that states have placed their emphasis on work. Recent proposals have focused on increasing participation rates, 40-hour work weeks, 24-hour work definitions, the elimination of federal waivers and the caseload reduction credit. We urge members of this committee to assess the full impact of these policy changes on your state programs before acting on them.

WILLIAMS: We recommend replacing the caseload credit with an employment credit that provides an incentive for an incentive for states to place and retain TANF clients in jobs with earnings, for providing short-term assistance to clients with earnings and which values part-time employment and earnings. And we appreciate the efforts of Senator Lincoln in this area. With respect to the work participation rates, APHSA supports the president's proposal to include two parent families in the all families rate. And furthermore, we believe states should be afforded additional flexibility in defining work activities so they can place clients with multiple barriers in meaningful activities. We also support the continuation of state welfare waivers. With respect to the increased required hours of work, the new requirement could have unintended effects and increased costs.

First it is important to note that in 27 states TANF clients no longer qualify for cash benefits when they work 40 hours per week at the minimum wage. In 16 states they lose eligibility after 24 hours of work at $7.00 per hour. So in short, clients will exit welfare before they can be counted towards the participation rate. States may have to adjust their eligibility rules in order to keep the family on cash long enough to count them. In a time limited TANF program, this would be unfair to the client and contrary to our mission of moving families off assistance. With respect to the unique needs of tribal TANF over the past year, ...

BAUCUS: I'm going to have to ask, I'm going to have to ask you to wrap up ...

ARNOLD WILLIAMS: OK. OK.

BAUCUS: ... best you possibly can.

ARNOLD WILLIAMS: I'll do this real quick. Again, we've been working with the National Council of American Indians on TANF, tribal TANF recommendations. We would encourage those, also as well as conflicting federal program rules which we've outlined in a recent document entitled Crossroads that I would recommend for that. In the long run, it is not rates, hours or activities that matter for the families that we serve. Rather the ultimate goal of welfare reform is the transition from cash dependency to job retention and earnings progression generating sufficient income to support a family free from welfare for a lifetime. Thank you for the opportunity to testify. And I would be happy to respond to any questions.

BAUCUS: Well thank you very much, Mrs. Arnold Williams. And all the statements (ph) of each (ph) will be included in the record so you needed worry about that. Mr. Carroll.

CARROLL: Thank you. Good morning, Chairman Baucus and certainly Senator Breaux and Senator Lincoln. I'm delighted to be here. Thank you for inviting me here today to discuss how the American business community believes we can support the individuals and families who have moved from welfare to work and also ensure people who work hard and play by the rules get an equal chance at achieving the American dream. My name is Rodney Carroll. I am the president and CEO of the Welfare-To-Work Partnership. I can think of no more noble, patriotic or American cause than taking people from poverty by getting them a good job. In 1996 when this welfare reform act was passed, shortly after the Welfare-To-Work Partnership was established in 1997. It began with five companies. Those companies are United Airlines, Monsanto, Burger King and Sprint also UPS.

It was established also under the direction of then Governor Thompson and also Governor Carper (ph) who chaired, co-chaired our Governor's Advisory Board. It was also established early on that the tag or the byline for this partnership would be that it is a smart solution for business. Since that time the partnership has grown significantly from five companies to now boasting over 20,000 companies throughout the United States. Those companies, I believe, have had a significant impact in changing this welfare population's landscape. They have created more than one point one million jobs since that time. It's important also to note that those jobs I am speaking of, by and large, average more than 45 percent above minimum wage. More than eight out of ten full health care benefits, and I guess another thing is almost 83 percent have what we call promotion track jobs. In other words, even though a person may come in entry level, they will have the opportunity, if they work hard or they get education, to advance in the company.

One of the reasons why this is a smart solution for business is because we found that hiring people from welfare makes good business sense. People transitioning from welfare have had, in some cases, a 50 percent higher retention rate than other traditional hires. Once we, once we began to talk to businesses about that, certainly they raised their eyebrows because they could see how it could be good for their bottom line. In 1999, we applied for and received a competitive grant from the Department of Labor. Although the issue of welfare reform is a national issue, I believe it might be solved with local solutions. And we started offices in five cities, New York, L.A., Chicago, New Orleans and Miami. And we started a program that I'll just refer to as a bizzling (ph) program. The objective was to go on the ground, go from grass tops to grass roots and really get involved in the local community, the local government with the local service providers and see if we could make an impact. The Department of Labor made a comment (inaudible) not only do we want you to hire people from welfare, but you have to hire or get people that we call the hardest to place people.

These are people that have more than one barrier to self- sufficiency. And we did that. The goal was 2,500. We passed 2,500 before the grant expired. And we did that with about half the money left over. I'd be more than happy to answer questions on this bizzling (ph) program if you so desire. But I looked at the panel today and I started to think about what I was going to say, how I was going to say it. And I began to think that, you know, we probably need to also hear from someone who really understands and knows what it's like to be on welfare. You see, although many of us talk to people every day and we read about them and all that, but in some cases, no one else can better tell you than a person that's actually experienced that. When I was 15 years old, I remember growing up in Philadelphia. I was in a kind of a tough neighborhood. And I found out -- I guess I had a pretty good childhood. But I found out later on that I was poor. I didn't know I was poor.

People told me I was poor. I guess I was poor. You see, and I remember growing up and, for some reason, my family was on welfare and I remember debating back and forth with my sister who would have to go to the store because when you went to the store, you had food stamps. And then you didn't want your friends to see you with the food stamps. And the kind of things you deal with when you're a teenager. But I also remember that people in my neighborhood, people that I looked up to, people in schools, people that were of authority, they had a low expectation for me. They didn't think I was really going to do anything except for perhaps get in trouble. And if I remember looking at, what I guess was a script for my life, I didn't like what I was seeing. Because people thought that well, he's probably going to get in trouble. He looked at a database and looked at statistics.

And statistics said, well, a person growing up is probably going to do this, is probably going to do that. And I remember feeling not good about that. Because you see, I was determined to do something good with my life. But I was looking for a chance, an opportunity. Fortunately I did get that. Eventually I got a chance to work at UPS. Now when I came to UPS, I didn't come in in a suit and tie. I didn't even come in full-time. I didn't come in with anything other than an opportunity, a chance. And when I got that opportunity and chance, fortunately I was able to make the best of it. And I began to climb the ranks of UPS, going from loader to unloader and to supervisor and so forth and so on, to the point in 1996 I was running the third largest operation in the UPS system. And during that time, one of the goals where we had a problem was hiring people. And I remember how I grew up and I remembered that people that were just like me, looking for a chance. And we started what we considered to be one of the best and most innovative welfare to work programs in this country. Thank you.

BAUCUS: Thank you, Mr. Carroll very much. That's certainly helpful. Mr. Berlin (ph).

BERLIN (ph): Mr. Chairman and members of the committee, I appreciate the opportunity to testify about the lessons we have learned from more than 30 vigorous evaluations of state welfare reform programs. Evidence from these evaluations of programs like the ones states have been running since the passage of welfare reform provide reliable evidence that these programs have played a significant role in raising employing and earnings and reducing welfare receipt (ph). Underlying TANF success are its focus on private sector work, the new message that welfare is temporary and the block grant structure that makes TANF a flexible funding source, not simply a program.

But welfare reform's very success has helped to underscore its shortcomings as well bringing into sharper focus two new sets of problems, the needs of the work poor, who have traded a welfare check for a paycheck but saw little change in their income, and the needs of the hard to employ with a range of employment barriers who were left behind by reform. The key challenge is how to sustain the remarkable gains in employment and welfare while adapting TANF to this changing context. In my written remarks, I make several principle points, primarily overall program effectiveness could be improved by expanding the role of education and training, particular welfare policies can indeed benefit children, investments in R&D are needed, and fourth, the Congress should proceed cautiously in further increasing TANF's participation requirements while ending the caseload reduction credit. These steps could have the unintended effect of diverting resources, modifying otherwise successful programs and increasing costs. Let me just focus in my remaining time on three of these issues.

First, overall program effectiveness could be substantially improved by modestly expanding the role of work-focused education and training. The evidence indicates that both job search first and education first programs are effective, but neither is as effective as a strategy that combines the two. What might Congress do? Allow states to count education and training and other services towards the participation requirements. The second point is that there is now new and powerful evidence demonstrating that welfare reform can play a vital role in improving the well being of children. But success depends on both the strategy employed and on the age of the child. Strategies that increase employment and income together, specifically strategies that supplement the earnings of welfare recipients who take jobs can improve the school performance of elementary school children. Fortunately, most states have taken steps to boost employment and income.

More than 40 states have revised the rules so that welfare could be used as a supplement to boost the earnings of the working poor along with EITC and food stamps. In the long run, however, these earning supplement strategies run afoul of welfare's time limits. Recipients can combine work and welfare until they reach the time limit, at which point benefits end, income tumbles and the prerequisites for benefiting children no longer exist. What can Congress do in this area? First, either allow states to stop the federal time limit clock when welfare recipients work full-time or clarify the definition of non-assistance to include ongoing cash payments made to supplement the earnings of full-time workers. Either change would allow states to use federal TANF dollars to run two separate programs. A time limited program for the welfare poor who are not working and an earning supplement program for the working poor who are. I said earlier that age of child also matters.

This is particularly true for adolescents. When mothers go to work, adolescent school performance declines somewhat. These teens are less likely to be supervised, more likely to be caring for younger siblings and more likely to work long hours themselves, all of which appear to negatively affect their school performance. Fortunately these negative affects for adolescents do not translate into higher rates of school dropouts, suspensions or teenage child bearing. While the affects are small, they bear watching and raise questions about whether we are doing enough to engage adolescents in positive after school experiences and to provide enough child care to care for their younger siblings. A related strategy for shoring up the income of low income families and benefiting children is to build the new safety net you've begun to build around the working poor by making the child support and food stamp programs more working poor friendly.

And by sending the message that states should be taking steps to ensure that workers get the benefits for which they are eligible. My third point was related to investing in R&D and I provide more information on that in my written statement. The fourth point is the administration's bill provides a constructive framework for addressing many of these issues. But in one area, participation standards, the administration's proposal entails significant risks. It is attempting to strike a balance between the strengthening the act's already strong employment message, while opening the door to increased use of education and training. The administration proposes to ratchet up TANF's participation standard and the weekly hours of participation required, while also ending the caseload reduction credit. And these three things together constitute powerful medicine for a program that doesn't appear to be sick. In my prepared remarks, I ask and answer two key questions.

Are the new standards achievable? And are the standards likely to generate more effective state programs? The short answer to both questions is no. And in addition, and most importantly, the risks of unintended consequences is quite high. To meet the standard being proposed, the most successful state welfare programs we have evaluated would have to radically restructure their programs. This restructuring could have the unintended affect of distorting priorities, diverting resources and driving up costs for child care and the creating of work experience slots with the potential consequence of undermining the very success we are now celebrating. Changes in participation standards are needed but building better information systems and establishing benchmarks based on actual participation rates might be the best next step. Thank you very much.

BAUCUS: Thank you very much, Mr. Berlin (ph). I'd like to begin with you, Mrs. Arnold Williams. And I believe it's your view that work participation rates are not the best measure of program performance, if I understand you correctly.

BAUCUS: And you feel that work participation requirements are a bit outmoded (ph) and incomplete measure welfare-to-work efforts. I wonder if you could just talk about that a little more and then your experiences in Utah. You know, what works. And you've mentioned a couple of changes. I wrote them down here, about the employment credit and two parent ...

WILLIAMS: Right.

BAUCUS: ... and so forth. But again, if you could just flesh that out a little more why you think that the work participation rates are really not the best measure. Just so we can get a better flavor of that.

WILLIAMS: I'd be happy to do that. They were probably the best measure that we had in 1996 as we ventured into this across the country, some states for the first time in terms of that. And in some states they may still be. What APHSA recommends is that states be allowed to choose. If they believe that participation rates are still what's most appropriate for their state based on, again, 50 very different state programs out there and with a states, differences based on counties and localities. But that many of us as states have tried to progress beyond that to true outcome, what we would consider more less process and more outcome measures of job placement, retention and earnings progression.

Basically the high performance bonus criteria that we've been competing for over the last couple of years. And we believe that that's the next stage of welfare reform, is particularly retention in jobs in our economic downturns in our states. That's raising the bar a lot higher to have us focus on retaining TANF families in employment and earnings progression within that. So we'd like to work with the Congress and the administration in structuring something that would have some options in that for the state to move to more of an outcome focus with respect to children and families based on those criteria.

BAUCUS: So I don't have a lot of time here, but again, just how do we address retention? Just more ideas and talk a little bit more.

WILLIAMS: Right. I think, you know, some of those have been mentioned a lot here. What are the work supports? In our state we put a lot of focus on the work supports. In one of those big, large, square, western, which I know you represent as well, transportation is one of the most critical supports that we can provide, right up there with child care, right up there with medical assistance. Transitional medical assistance is a key.

BAUCUS: That's true. We have virtually no public transportation frankly.

WILLIAMS: We do not. We have it in the central, Salt Lake area, Wasatch (ph) Front. The rest of the state has no public transit. So transportation is absolutely critical. So I think it's being very creative about how we package our resources and how we work actually in a community by community level to provide the right job supports, working with businesses to figure out what works best to support that employee. And that has become more challenging in a time of economic downturn, where the full, you know, jobs aren't as available. Full 40-hour week jobs are not as available. We have many businesses who are cutting back on hours per employee to avoid layoffs, full layoffs of employees in terms of that. So I think we want to, you know, focus more on what do we do to support those families and keep them in that work force. Child care, transportation, medical support, food stamps, that entire kind of EITC, all of those package.

BAUCUS: Right. Again, if you could -- both of you -- I'd like you and Mr. Carroll and Mr. Berlin (ph), too, if you'd like to, on the kind of a point you made, there aren't that many people who have 40 hour jobs, even off welfare. And how hard it is to meet the 40-hour state requirement when so many service sector jobs, which are the jobs most likely to be utilized here themselves are not 40 hours. They're just 20 hours, maybe a week. Or 35. It just changes so much. How do we deal with that? You know, the administration says 40 hours, you've got to have 40 hours. But my off the cuff (inaudible) observation is that's pretty tough to meet. That's unrealistic given the jobs that are available today. So it's -- your thoughts. So, Mr. Carroll, why don't you begin?

CARROLL: Sure. Thank you. Obviously, that's going to be tough certainly the, you know, the bar has been raised. However, here's what I would suggest. One of our programs that we have is called law project program. And we tell people that have never been in a law firm or had something (inaudible) background, you name it, that we'd like you to be a paralegal. And we tell them about what a paralegal makes and all that. And a paralegal, I think it's about $38,000 a year on average. How you can transition your life. And we began, they began in a law firm just doing whatever a law firm -- it could be in the mailroom.

But along with that, they go to school to become a paralegal. And I'm not sure because I don't know the plan as well as somebody else knows, but -- so part of the goal would be, not only to work, but they need to get some type of training and education that's really going to take them, not out of welfare to work, but out of poverty. And how you do that is they're going to have a skill that businesses are going to be willing -- so I think if we're going to raise that bar, our expectation level for people transitioning from welfare needs to be higher as well.

BAUCUS: How do you get more employers to develop these kinds of programs?

CARROLL: Well, that's what we specialize in. We go and we start with the employer and we ask them, do you have a need. And if they say they do have a need, then we start to talk about, as Mrs. Arnold Williams said, we start the support. We say, OK, we're going to put a person in your job, in your company and they're going to come along with them, a support system.

BAUCUS: What about, you know, smaller businesses? You know, a lot of states don't have a lot of big companies. UPS is virtually everywhere, but, you know ...

CARROLL: Well, these companies, these law firms I'm telling you, some of them, a lot of them are on 10, 15 people, five people. You know, it all depends. We have accounting. It really has to do with the vision. Where do you see this going? And once you get that clear, then I think it becomes clearer how to get there.

BAUCUS: OK. Well, my time's up. When other senators ask their questions, I'm going to ask you to put yourself -- I mean, you made an excellent initial point. We need somebody here who's on welfare or just, or off, or just to get, just to get -- hear firsthand, not secondhand, but firsthand. So I'm going to ask you to be that person.

CARROLL: Sure.

BAUCUS: (inaudible) background. Just (ph) put yourself in the shoes of the average, typical, you know, single mom and just struggling and just talk it through. When we come back around.

CARROLL: OK.

BAUCUS: Thanks. Senator Lincoln.

LINCOLN: Mr. Chairman. And thanks to our panel who is here today to share with us some of -- looking for some of the solutions and some of the solutions you've already found. Mrs. Williams, you hit on a point earlier and I think Senator Baucus mentioned some of it, too. And I had meant to bring it up with Secretary Thompson, but didn't have time. But we in Arkansas, we have a monthly benefit of $170 for a family with an adult and two children. And once a welfare client in Arkansas is working 28 hours at minimum wage, the family no longer qualifies for TANF. So if the 40-hour work week is required, the family would be off of TANF before they could even be counted towards the state's work participation rate. So the state would disregard the earnings, perhaps, but that would really have somewhat of a perverse affect of making the family stay on cash assistance so that they could be counted towards the state's participation rate. Is that -- that's kind of what you're saying, right?

WILLIAMS: Right. I ...

LINCOLN: (inaudible) incentive.

WILLIAMS: I think that is a fact. I think it's in -- a good number of states are in that situation. And I think the unintended consequences of that policy choice would be states looking at earned income disregard. Or in states like ours that has chosen a shorter time limit, maybe going back up to the longer one, which is not the right answer for anyone. I think that's why we would like to structure -- and again, we appreciate your leadership on this -- some kind of an employment credit. And I think we all agree, the caseload reduction credit isn't probably the right measure in 2002. But if we could count those individuals for longer than three months, for a year even, it would boost that.

It would give credit to what they're doing. We talked about expectations. We have a universal approach in Utah because we believe that. If you expect nothing of someone and say, well, we don't think you can do anything, they won't. If you say we believe everyone can do something, they will. But we need to honor that then when they step up to the plate and say, you bet. I'm doing it. We want to be able to give full value to that and credit to that. And so I think a better policy choice is around the employment credit and how we structure that.

LINCOLN: Well, I want to thank you because certainly working with my colleague on the House side, Congressman Levin and your group and others, we're trying to come up with that employment credit that is going to work. And, I think, move us more towards the objectives of what we have intended. And I think perhaps, maybe Secretary Thompson and I may have been talking about different things when we were talking about the three-month piece there. He may have misunderstood what my question may have been there. Mr. Carroll, I want to applaud you. I've been a fan of yours for quite some time.

And what you have done in taking your Welfare-To-Work Partnership and really working through that in providing the incentive for individuals as well as businesses. Because this is not something that government can do alone. We have to have a partnership, whether it's our state or federal governments, with the businesses and industries out there, knowing what they need in their employees, and helping them to locate those employees and then providing that kind of assistance and backup. The one thing that we talked about earlier, just maybe you might elaborate on your experience in helping place welfare recipients into jobs. And how crucial dependable child care is in that vein.

CARROLL: Sure. I agree with most everyone here that child care is probably the single most important reason -- and certainly something that we all need to be concerned about. And Chairman Baucus talked about a woman in Montana who with every fiber of her body wanted to be off welfare and got off, but could not afford the child care. If I were her, I would be thinking, well, one solution would be to give me a child care subsidy or something that I (inaudible) could pay for child care. But I would prefer to make enough money to pay for my own child care. So when we approach this, I think we have to approach it from both directions. We may need to have some type of additional subsidy for child care. But again, the long-term goal needs to be that that woman and any other person is able to provide for their own families. Because that is what they -- that's what we really want, the dignity that we can provide for our own families.

LINCOLN: Self-sufficiency.

CARROLL: Right.

LINCOLN: Mr. Berlin (ph), is that correct? You mentioned in some of your testimony that satisfying that 40-hour participation rate would require major increases in child care funding. One of the other issues that's critical for us in rural states is transportation. And that's been talked about a lot here. I'd like for you to kind of elaborate on these challenges in rural areas that are somewhat magnified. When you talk about child care, you're not just talking about affording it. You're talking about finding it. We have counties that don't even have child care. And we've got people that live out in rural areas that don't have any transportation. Much like Montana and other places, we have very little public transit. So you mentioned that there's a little bit of a magnification, I guess, in rural areas.

BERLIN (ph): I mean, the problem is definitely worse in rural areas. You know, it's really the administrative impracticality of the whole thing that you have to react to. If somebody's working 30 hours a week, it means you have to arrange 10 hours of extra activity, especially in a rural area. You'd have to get from your job to that 10 hours of other activity. Even if you were trying to set up 40 hours of other, you know, education and training kinds of activities, most of those programs don't run for that long. So then, really what happens is you end up focusing on keeping people busy while they're on welfare, rather than actually investing in getting them off of welfare. So in my testimony, I lay out a number of the difficulties and problems that you'd confront. And they're all magnified tremendously in rural areas.

LINCOLN: We appreciate it. It's been an excellent panel. Thank you, Mr. Chairman.

BAUCUS: Thank you, Senator. Senator Breaux.

BREAUX: Thank you, Mr. Chairman. And thank you panel (ph). I apologize. Previous meetings would not let me be here for the Secretary. I'm sorry I missed him. I remember when President Clinton proposed the legislation to end welfare as we know it. There was a real substantial amount of predictions that it was never going to work. That it was going to cause unbelievable hardship and it couldn't meet our 50 percent work requirement. And I think we've done a pretty good job of meeting all of those requirements. I mean, by any measure, 52 to 56 percent, as the Secretary said, fewer people are in welfare, families and individuals. And that has been a real success. I'm hearing the same type of concern expressed that we heard eight years ago.

That if you require 70 percent of the welfare caseload to be engaged in 40-work week, it's going to collapse. The country is not going to be able to survive, et cetera, et cetera. It seems that that was the same concerns I heard eight years ago. And we met those standards. It kind of reminds me of the CAFE standards debate on automobile efficiency. You know, the automobile industry said you make us meet these high standards, we're all going to close and go broke. And yet, they've met them all. And we're looking at the same thing, expanding it again. Could you comment on why we can't do more in this area? Because when we were challenged once, we did it very successfully.

WILLIAMS: I would be happy to take a stab at that from a state perspective. I think we're saying we can do more. I think it is probably time to raise the expectations of the states and of us on our customers. I think the key to that, and what was key to the '96 law that allowed us to not have those very negative outcomes that some predicted to happen, is that flexibility. And again, I'll use my own state. We have a very individualized approach. Universal participation, no one's exempted. We work one on one.

WILLIAMS: Our employment counselors focus on negotiating a very individualized plan that meets that person's individual needs. And then they meet the participation requirements. So I don't think it's an either/or question. I think it's a question of what should those expectations be, and we agree they should be higher. But then, what are states allowed in terms of flexibility to mix and choose and match the strategies that will have us achieve those, again, with positive outcomes for children and families.

BREAUX: Well I think that that's important to consider where we were eight years when we talked about setting these numbers and what the outcome ultimately was. And now we're saying, well, can we do better than that? And I hear some of the same arguments that no, we can't. (inaudible) I heard back then and yet we were able to do it. One of the big arguments -- I'm a big supporter of child care. You can't have individuals work if they don't have child care. The children aren't being taken care of. They're going to get in trouble. They're going to end up being a bigger problem then if we took care of them in the first place. And I mean, it's incredibly important that we do that. Arguably, Louisiana is one of the poorest states in the nation. And maybe it's not even an argument. They'll just give us that. But we checked with the State Department and about whether we had a waiting list for child care. And it came back that no, we don't. And, you know, if we don't have a waiting list for child care assistance in what is arguably the poorest state, what am I missing there? Or am I missing something? I mean, can anybody talk about child care?

BERLIN (ph): Well, I think it varies by state. I'm not sure of all the specifics in Louisiana, but in some places, there are pretty substantial, you know, waiting lists for child care. I just would make one other point about this, broadly. I think you're absolutely right to raise this, you know, it was a leap of faith then. Why do we think we can't do it now? The only thing I want to point out is that in actuality, no state actually had to meet the participation standards that were established in the old act because caseloads fell so much. And what the administration is proposing to do is actually phase out that caseload reduction credit that reduces the participation standard. So what's going to happen in the next three or four years is states are going to have meet rates dramatically higher than they've been meeting up until now.

BREAUX: Well it's going to be a lot more difficult. I mean, the easy cases have been solved. What remains, in most cases, are the most difficult. Because if they weren't that difficult, they would already have jobs. I mean, they'd be in a law firm, they'd be driving a truck, they'd be working a hamburger place, they'd be learning a skill, working their way into a very meaningful occupation. And I'm all supportive of that. So that what we have left is some of the most difficult cases which are going to require some real challenging innovative ideas about how to solve it. I'm a big believer in helping them with medical assistance and the transition medical, Medicaid assistance program. Have you all had problems or seen problems on a state level, Mrs. Arnold Williams, with regard to the continuing updating on their incomes? Now if someone's making enough income or having, hopefully, working for an employer that provides them health insurance so they don't need to have this program. But has it been a burden on the states, in your experience, with the other states of being required to constantly update their income earnings to maintain their eligibility?

WILLIAMS: Right. And I think, Senator, that would extend the things like food stamps and -- you know, there's that whole area of aligning the package of programs that support families in employment. And Medicaid is one. In our state, we had a waiver to have two years of transitional Medicaid. We lost that waiver a couple of years ago.

BREAUX: But you had it going for a while?

WILLIAMS: We did. And our waiver ran out about a year ago on that.

BREAUX: We have legislation to give you another year.

WILLIAMS: Right.

BREAUX: With less regulatory requirements on reporting.

WILLIAMS: The more simplified, the better. Because, particularly as we move towards higher expectations of number of hours per week, that TANF families are involved in work or other activities, that's less time they have to be walking into our offices, updating everything or doing that. In our state, we're actually trying to do as much of that electronically. We have a new major initiative around that. So, but I think it's real important to simplify that. Not only for the agency, but most importantly, for the family.

BERLIN (ph): Right. And similar simplification in the food stamp area along the lines that we've done in Medicaid would be very helpful.

BREAUX: We have them doing more reporting than we're going to have them doing work.

WILLIAMS: Yeah.

BREAUX: That's crazy. Thank you.

BAUCUS: OK, Mr. Carroll. Who's that -- just talk, walk us through. Put yourself in the shoes of that single mom. Just what's she -- what's her life? How she sees it as if she were here. Unfortunately she's not, but if she were.

CARROLL: Well, you know, I can think of a number of, you know -- not to discount -- I think, obviously, child care, if it's a single mom, one of her concerns would be her children and whether they would be taken care of if she were -- the child care -- if she had to work on off-hours, she would need child care that would be open at night or on the weekends. Certainly she would want a safe child care. And the other thing is she would want to be able to get to and from wherever her employment was. So transportation could be an issue as well. And then she would also like to be trained and be able to know what she's going to do in the job. And I think -- but at the -- at some point down the road, she would want to be in a place where she could manage all that through her own means.

She would want to be able to have a car so she could drive to and from. She would want to be able to have a system, or be able to pay for child care. And certainly, she would want to be able to advance in her employment job. So, when every -- I guess when we start to talk about the bill and legislation, we need to have some process -- if we're going to -- TANF one has passed. Now we're going to TANF two. We need to have something that says, OK, what is the road map? You know, where are we going to end up down the road? Where are we going to be? We don't want to be five years from now saying, well, you know, the child care subsidy is not enough. We need to have -- we'd like to be at a point where we have the child care necessities, like in Louisiana, are less. Because people have been able to take care of that. And so I think the one thing I think we make a mistake as a society is we don't necessarily know that welfare recipients want what we all want. They want the dignity that work brings. They want to have the same lifestyle. They want their children to go to college. And they want everything that we want. And they just need some help in getting there.

BAUCUS: Mrs. Robin (ph) Williams, did you want to supplement that? Or what do you think?

WILLIAMS: I would add maybe just from the other end of the harder to serve. This is an example I've been using where I go of what I believe I'm proud of in our state in terms of innovation across entities. And that is that recipient who maybe has a severe substance abuse problem, which we know is true for many of them. What we have done, and again, an individualized approach, is taken that intercept -- we also know that many of those families, because of that abuse problem, interact with the child welfare system. My child protective services investigators know that family as well. And my substance abuse staff know it. And our work force staff know them. So we've challenged the three systems to come together in trying to match -- and they all have different timeliness. We talk about the 60 month time limit, in our state, 36. But in child welfare, in my state, you have 12 months to get your act together or face losing your children permanently. And substance abuse tended to like to have 18 to 24 months to work with someone.

So we actually set the systems down and said, we can't do this. We can't achieve the outcomes for these kids and this family with you doing that. So we adopted the very successful drug court (ph) model into the dependency court (ph), into our juvenile court (ph) to work with these mothers and these children so that the system is putting everything together and we're shooting on that 12 month time limit because that's the shortest for mom to either get her kids back or keep her kids. And it's working. It's working tremendously. So that mom needs the three systems to come together and work together well and give everything towards that.

But that mom also needs the system to be able to say I might know for 12 months the best she's going to do is be in very intensive substance abuse treatment. Visit the judge every other week, not every six months or every three months in a typical child welfare case. Make sure kids are in school. Work with my child welfare staff. And work with her employment counselor, so at the end of that drug treatment, it may be 12 months, she is ready to move into employment. So I would also say that I think what -- if I were that mom, I would want my system coming together collaboratively for me. I'd want them to have the flexibility to do that. And I'd want them to be able to work very intensively with me up front so that I do stand a better chance. And that may not be three months. One of the things that concerns me a little bit is assuming you can do substance abuse treatment in three months. Because you can't do that.

BAUCUS: It's a good point. Unfortunately, there's a lot of states, and one of them is mine, is Montana, the largest law enforcement problem is methamphetamines (ph).

WILLIAMS: It is.

BAUCUS: That's the case in, I know, most law enforcement jurisdictions. And you know as well as I that methamphetamine (ph) is wicked stuff. And it's -- that is -- when you get on it, it's harder to get off. And the treatment is harder than other drugs, cocaine, heroin, et cetera. And unfortunately in Montana, there is virtually no public drug rehabilitation substance abuse programs. There are some available on the private sector, but they're very expensive. And it's, and there's none, for example, in the penal system. As persons who are incarcerated don't have any -- there's no program to help them get off. So when they get out, they're more likely to get back on again. And it's -- how many states, you know, do have a significant substance abuse program to -- that works? Because I'm told, I'm told like with methamphetamine, it's your point. It takes more than three months. It takes more than 12 months ...

WILLIAMS: Right. Right.

BAUCUS: ... in many cases. It's such bad stuff and alters your brain permanently.

WILLIAMS: Yeah. And unfortunately, it's a drug of choice for women.

BAUCUS: Yes.

WILLIAMS: (inaudible) what we see. Because it helps them lose weight.

BAUCUS: It helps them lose weight. Exactly.

WILLIAMS: Unfortunately, there is that -- and do everything. Be superwoman in terms of ...

BAUCUS: Exactly.

WILLIAMS: ... that.

BAUCUS: Supermom.

WILLIAMS: Yeah. I should mention how we have funded many of these drug dependency courts (ph) is with our tobacco settlement money. Our legislature chose to put some into that. Because you're right. The substance abuse block grant that states get is not sufficient to meet the needs. And even though it's a block grant, it has many set asides and earmarks. So one thing might be allowing some flexibility in how that money is spent to target on some of these families. We've been lucky to have our state legislature put state funds into substance abuse treatment as well as local funds. But I think we may be unique in that. I believe we have a very key point there that states are not geared up to handle what's coming their way.

BAUCUS: OK. Mr. Berlin (ph), do you want to add anything here?

BERLIN (ph): I just ...

BAUCUS: Give you an opportunity here.

BERLIN (ph): I just would put out that really what's happening is the system's been transformed, not just because the welfare roles have gone down, but these agencies now have a whole new set of responsibilities in two new areas. One is they're becoming rehabilitation agencies for the hard to employ and requires a completely different set of relationships with different providers, different thinking about what the right standards are and what, you know, what progress would constitute. And secondly they're also now the agencies responsible for pulling together the safety net that we've built around work for the working poor. And in, you know, instead of having a system that's built around non-work, we're increasingly building a system around work. And that, I think, is a much healthier place to be. And it's where the American public wants us to be.

BAUCUS: Well that's a good point. And I know that efforts, at least in my state, that have some success in stamping out meth have been totally holistic (ph). It's not just law enforcement. It's not just prevention. It's not just rehabilitation. It's in schools, in the churches, in the communities and just so there's -- it is zero sum. There's just no escape. And I think it's somewhat similar to the concept you were making about (inaudible) work and helping the community based effort to get this done.

Thank you very much, all of you. You've been very helpful.

The hearing's adjourned.

END

NOTES:
[????] - Indicates Speaker Unknown
   [--] - Indicates could not make out what was being said.[off mike] - Indicates could not make out what was being said.

PERSON:  MAX BAUCUS (94%); FRED THOMPSON (67%); THOMAS A DASCHLE (57%); JAMES JEFFORDS (56%); KENT CONRAD (56%); BOB GRAHAM (56%); ROBERT G TORRICELLI (55%); JOHN F KERRY (55%); JEFF BINGAMAN (55%); ORRIN G HATCH (53%); FRANK H MURKOWSKI (53%); DON NICKLES (53%); PHIL GRAMM (52%); TRENT LOTT (52%); OLYMPIA J SNOWE (51%); CRAIG THOMAS (51%); JON L KYL (51%); 

LOAD-DATE: March 16, 2002