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Congressional Testimony
August 1, 2001, Wednesday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 1364 words
COMMITTEE:
HOUSE BUDGET
HEADLINE: CHALLENGES
FACING WORKING FAMILIES
TESTIMONY-BY: BENJAMIN CARDIN,
R-MD, REPRESENTATIVE
BODY: August 1, 2001
Representative Benjamin Cardin, R-MD
Statement before the Budget
Committee
Hearing on the Challenges Facing Working Families in America
Mr. Chairman, let me start by thanking you and Mr. Spratt for giving me
this opportunity to come before your committee to talk about our Nation's
response to helping working families escape poverty.
Eight years of
unprecedented economic growth, increases in the Earned Income Tax Credit, and
welfare reform have all contributed to the recent decline in the poverty rate.
However, we cannot let this improvement lead us to complacency, particularly
when one out of every six children in the U.S. continues to grow up in poverty.
Furthermore, we must recognize that the gains provided by a long economic
expansion might quickly erode should the economy continue to slow down.
Therefore, I was disappointed that President Bush's budget request for
the Administration for Children and Families failed to keep pace with inflation
and failed to match the President's overall spending update for government
programs. We can and must do better.
If President Bush is serious about
helping faith-based organizations serve needy families, he should propose
restoring the deep cuts in the Social Services Block Grant, which has a long
history of collaborating with religious charities. If the President wants to
help non-custodial fathers play a bigger role in the lives of their children, he
should advocate sending those parents' child support payments to their children,
rather than to the government. And if President Bush wants to maintain the
momentum of welfare reform, he should recommend extending the so-called
supplemental grants under the
TANF program, without which 17
States will see a cut of up to 10% in their welfare funding. Regrettably, the
President's budget is silent on these issues, despite bipartisan support for
addressing all of them.
I should point out that the President's budget
did include some welcome and very useful child welfare proposals. Most
prominently, the Administration's budget proposed a $200 million annual increase
for the Promoting Safe and Stable Families Program, which provides resources to
prevent child abuse, to strengthen fragile families, and to promote adoption
when appropriate. However, there appears to be some confusion as to whether the
recent tax bill used up the funding set aside in the Budget Resolution to
increase resources for this important child welfare program. I hope the Budget
Committee can clarify this situation quickly so that we can move forward to
address areas covered in the Budget Resolution, including the Safe and Stable
Families program and the
TANF supplemental grants.
As
this Committee considers future funding levels to help working families and to
address poverty, it might be useful to survey unmet needs in some key areas.
Because my time is short, I will focus on child care, child support,
unemployment insurance, and the Temporary Assistance for Needy Families Program
or
TANF. The current funding level for the Child Care
and Development Block Grant (CCDBG) is insufficient to provide quality day care
assistance to the millions of families attempting to escape or stay off welfare.
In fact, about half of the States have established thresholds for a family's
eligibility for child care assistance at less than 60% of the State median
income - leaving many low- income families without access to child care
subsidies, while still having too little income to benefit from the Dependent
Care Tax Credit. To realize the financial burden on these families, you only
have to remember that child care costs between $4000 to $10,000 a year - roughly
the same as tuition at a public university. To ensure that working families can
find accessible and affordable child care, Congress should increase funding for
the CCDBG.
Like quality day care, consistent child support payments can
help families move toward self-sufficiency. Unfortunately, current law actually
penalizes States that send child support collections to families struggling to
leave welfare, and in some cases, to families that have already left public
assistance. For example, if a State sends a child support collection to family
on welfare, it still owes the Federal government between half and three-quarters
of that same child support payment (based on the State's Medicaid match rate).
This has discouraged States from passing through child support -- and encouraged
them to adopt an effective 100% tax rate on child support payments to certain
families. Last year, the House overwhelmingly passed bipartisan legislation to
end this disincentive for States to send child support to families, but the
Senate failed to act on the measure. The House should again pass this
legislation, particularly now that several compatible bills have been introduced
in the Senate.
Another hole in our Nation's safety net exists in the
Unemployment Insurance system. In January, the Government Accounting Office
reported that the unemployment compensation system provides "only limited
protection for low-wage workers." In fact, the GAO found that while low-wage
workers were twice as likely to become unemployed, they were only half as likely
to receive UI benefits compared to higher-wage workers (even when employed for
similar periods of time). The fact is that UI coverage rates are not very
impressive for any group: only 18% of unemployed low-wage workers were receiving
UI benefits compared to 40% of higher-wage workers.
As our Nation's
unemployment level continues to creep up, Congress should consider the
non-partisan recommendations issued last fall by the major stakeholders in the
UI system to correct some of the program's shortcomings.
This plan
suggests, among other things, eliminating certain barriers to UI benefits, such
as precluding part-time workers from receiving assistance unless they seek
full-time work, and ignoring the most recent wage data when determining
eligibility.
Let me conclude with an issue Congress will consider next
year - the reauthorization of
TANF. There can be no doubt that
welfare reform has been an important factor in helping many low-income mothers
join the workforce and begin to replace a welfare check with a paycheck. But the
job of welfare reform is far from done. Those left on the rolls are more likely
to have multiple barriers to employment, such as low educational levels, limited
work histories, substance abuse problems, domestic violence issues and
disabilities. These problems will demand intensive services to
allow recipients to enter employment.
Just as importantly, many of those
leaving welfare for work have yet to leave poverty for a better life. These
individuals need help with both employment retention and wage progression. In
addition, we need to do a much better job of ensuring that working welfare
leavers receive other benefits for which they remain eligible, especially
Medicaid and food stamps.
Finally, I want to correct a misconception
that there has been an enormous decline in the
TANF caseload.
It is accurate to say that the number of people receiving cash assistance from
TANF has declined by half over the last six years.
However, it also true that the number of people receiving
TANF- funded work supports, such as child care and training,
has grown substantially over the same period of time. Any discussion about
TANF's future funding must account for this total
TANF caseload, not just those receiving cash benefits. This
comprehensive caseload number explains why States spent 93% of their annual
Federal
TANF grants last year, even as the number of cash
recipients continued to decline. In fact, a dozen States actually spent more
than there annual
TANF allocation in 2000, meaning they dipped
into funds reserved from past years.
For all of these reasons, Congress
should continue to fully fund
TANF -- by which I mean, the
current allocation plus an adjustment for inflation. Such a commitment will
allow States to take the second step in welfare reform - turning initial
employment gains into permanent poverty reductions. Thank you.
LOAD-DATE: August 3, 2001