SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 5509 words

COMMITTEE: HOUSE WAYS AND MEANS

SUBCOMMITTEE: HUMAN RESOURCE

HEADLINE: WELFARE OVERHAUL PROPOSALS

TESTIMONY-BY: RAYMOND MEIER,, CHAIR, COMMITTEE ON SOCIAL SERVICES,

AFFILIATION: NEW YORK STATE SENATE

BODY:
Statement of

Raymond Meier, Chair, Committee on Social Services, New York State Senate; Chair, Human Services Committee, and Co-Chair, Task Force on Welfare Reform Reauthorization, National Conference of State Legislatures

Testimony Before the Subcommittee on Human Resources of the House

Committee on Ways and Means

Hearing on Welfare Reform Reauthorization Proposals

April 11, 2002

Chairman Herger, Ranking Member Cardin and members of the Human Resources Subcommittee, I am Senator Ray Meier of New York. I chair the Committee on Social Services in the New York State Senate. I am testifying here today on behalf of the National Conference of State Legislatures (NCSL), where I serve as the Chair of the Human Services Committee as well as co-chair NCSL's Task Force on Welfare Reform Reauthorization. NCSL is the bipartisan organization that serves the legislators and staff of the states, commonwealths and territories. Mr. Chairman, as key stakeholders in welfare reform, state legislators are reviewing your efforts to reauthorize the historic 1996 welfare reform law very closely. NCSL supported the law in 1996. Enacting and implementing welfare reform was accomplished in partnership with state government; our hope is that reauthorization will continue this partnership built on flexibility, not mandates. State legislators are responsible for writing, financing and implementing laws governing the TANF program in their states, for overseeing the programs in their states, and for appropriating TANF and Maintenance of Effort (MOE) funds. Our choices and successes offer the federal government a chance to learn what really works to help struggling families, just as the federal government drew on state efforts to reform welfare in crafting the 1996 law.

Last year, NCSL created a task force on welfare reauthorization that I co-chair with Assemblywoman Dion Aroner of California. This bipartisan group of 36 legislators and staff developed NCSL's positions that were adopted by NCSL's Executive Committee at its February meeting. We have learned a great deal about the successes and remaining challenges of welfare reform and the creativity and enthusiasm of government, for-profit, not-for profit and faith-based and community organizations in serving these families. Federal law should help foster this creativity and not stifle this enthusiasm.

As states have transformed the nation's welfare system to better serve local needs and different populations, our nation's state legislatures have made different choices. States have crafted different approaches that respond better to local economies. Many states further devolved policymaking responsibility to localities, as my own state of New York did. State legislatures' diverse policy choices and funding decisions mean that any further changes in the program may impact states in different ways.

Like you, I work in an environment where bipartisan compromise is necessary because control of the chambers is divided by party. Like the U.S., the state of New York has urban and rural areas that have unique sets of needs. My own district, which includes large rural areas, is vastly different from New York City. The most exciting thing about TANF is that we can tailor our programs to best serve the needs of very different places. The federal government devolved policymaking authority to the states. In New York, we have taken this policy even further by giving some policymaking authority to our 58 counties so they can tailor programs even further to local needs.

As the County Executive of Oneida County ten years ago, I was involved in welfare reform before the passage of the federal welfare reform law in 1996. I instituted a program with federal and state waivers requiring and supporting work and eliminating barriers to employment by welfare recipients. I have furthered these efforts in the state legislature as chairman of the Senate Social Services Committee. A job provides freedom, independence and the ability to support oneself and one's family. Welfare reform has made employment possible for millions of families and helped give people the freedom to make a better life for themselves.

Our work is not done. While caseloads have declined dramatically, many families struggle with barriers to self-sufficiency. Mental illness, substance abuse, physical challenges, low literacy, limited English proficiency, domestic violence, and learning disabilities are among the challenges faced by our clients, especially long-term recipients. Given the declining economy and the impact of the tragic events of September 11th on industries that have traditionally hired former welfare recipients, special attention is needed to ensure that there are no adverse unintended consequences in reauthorization. State legislators also believe that welfare reform is an ongoing process of sustaining the work effort of former welfare recipients. This includes services that support job placement, retention and advancement to prevent welfare recidivism and improve the lives of children and families. Our work has also focused on welfare prevention strategies including teen pregnancy prevention, noncustodial parents and fatherhood programs, promoting marriage and other family formation strategies.

I participated in the listening sessions held by HHS to hear the views of state policymakers. I appreciated the sincere effort the Administration made to listen to our experience in the states. The President's welfare reform proposal reflects an effort to resolve many issues that were raised by state legislators in these sessions and will increase state flexibility. Unfortunately, less attention has been paid to these helpful provisions because the proposal also adds new requirements with no additional funding, resulting in less flexibility for the states. In particular, the President's work rates proposal will force states to concentrate their efforts on those receiving cash assistance. This will force states to reallocate TANF funding away from creative and innovative services to fund these new efforts, and will exacerbate the difficulties states face in providing child care to those on welfare and poor working families including former welfare recipients since no new child care funds are included.

FUNDING

States and territories have used the flexibility in the TANF program to fund services such as expanded child care, substance abuse treatment, pre-kindergarten classes, training to help parents get better jobs and after school programs aimed at reducing teen pregnancy. In FY2000, only 50% of TANF was spent on cash assistance. 20% was spent on child care and the remainder was spent on other services.

The TANF program today serves a very different population than the AFDC program at its inception in the 1930s. People accessing our services are no longer widows and most children on welfare are not orphans. Most women work outside the home and our economy has changed the type of job opportunities available to low- skilled workers. The caseload for cash assistance has declined nearly 60% nationally since passage of PRWORA; however, as we provide increasing support to ensure job retention and advancement as well as services for children and families, the total caseload receiving services has increased. This is why continued full funding is critical.

We appreciate that both the Administration's proposal and your own legislation, Chairman Herger, do not cut the block grant but maintain the commitment to fully funding the block grant. We also appreciate that the TANF supplemental grants are continued and that the contingency fund, which provides federal cost sharing in an economic downturn is reinstated. However, the contingency fund should have a less restrictive trigger mechanism and less complicated requirements for state participation than the contingency fund in the 1996 law. I urge you to construct the reconciliation and maintenance of effort provisions so that needy states can have greater access to the fund.

FINANCIAL FLEXIBILITY

In addition, the administration's proposal continues the financial flexibility of the block grant structure. We are pleased that the Administration rejected pressures to earmark the block grant. NCSL will oppose any effort to earmark the TANF block grant as a limitation on critical flexibility and antithetical to the notion of devolution. Mr. Chairman, there are a number of provisions included in the President's proposal and your legislation that would enhance the financial flexibility for of the TANF program. These items reflect concerns raised in the listening sessions by myself and my colleagues in the nation's state legislatures. First, restrictions are lifted from TANF that is carried-over from the previous fiscal year so it can be spent as flexibly as current year TANF, not limited to funding only time-limited assistance for basic needs. The administration promotes changes so states get "credit" for rainy day funds when we appropriate the funds for that purpose and your legislation mirrors this. Currently, states are discouraged from maintaining their own contingency funds because such funds remain in the federal treasury and are considered unobligated, thus making it appear that those funds are not needed or not allocated for any purpose. We appreciate your recognition that state rainy day TANF funds as a legitimate use of TANF block grant funds consistent with state budgeting principles. We especially appreciate that the current artificial distinction on the treatment of child care and work supports for the employed and unemployed is removed in the President's proposal. Currently, time limits are triggered for the unemployed using these services while they search for a job.

WORK

Mr. Chairman, state legislators believe strongly in the value of work. In fact, states changed their welfare programs into programs that require and support work using waivers before the federal government acted. 48 states operated their welfare programs under these waivers before 1996. The rigid rules of the old AFDC program actually prevented programs from implementing strategies to help welfare recipients become self-sufficient. For every dollar earned, welfare recipients lost a dollar in benefits. Poor people can do the math. If we make it advantageous to go to work and provide support to those confronting tough challenges, parents will work. We supported the federal bill in 1996 because we recognized that the old system had trapped too many families in poverty by not having any expectation that individuals work or make themselves ready to work.

States are strongly committed to the work first focus of TANF. Federal constraints will compromise our ability to allocate our resources to best serve individual recipients. Major changes in the current requirements could upend state spending decisions. We have learned that different strategies are needed for clients who have very different barriers to work. We also believe that part- time employment with some support is better than no employment, and feel that states should be able to count all recipient work effort. We value job retention and advancement efforts. These supports are critical for long-term self-sufficiency and truly represent the next phase of welfare reform. States are best suited to decide what work activities a recipient can perform. We know we must work quickly to get recipients into the workforce. After all, TANF is a time limited program, with a 60 month lifetime limit on benefits.

In my own state of New York, labor participation rose in the years following welfare reform with the largest increases occurring in groups most likely to use welfare; for example, single mothers. Between 1994 and 2000, work rates for never- married single mothers increased from 40.6% to 60.8%, an increase of 50% in just five years.

Mr. Chairman, we have targeted TANF resources toward supporting families who are in the work force. New York provides a package of work supports that include child care subsidies, EITC, Child Health Plus, Medicaid, housing and transportation along with administrative changes that increased child support collections. New York has a very generous state earned income credit. The average state and federal credit was $1,849, for the most recent year in which statistics are available.

Mr. Chairman, New York's combined impact of increased supports make a difference. For a working mother with two children holding down a $6 an hour job, food stamps and the EITC boost her income well above what she'd get in welfare and move her above the federal poverty level. And, if we give her help with her child care bills and get her the child support she is due, this will further boost her family income. Unfortunately, with higher work participation rates and an increase from 30 to 40 hours per week, the New York legislature will be forced to reallocate funds from these supports. States like mine are facing our own budget deficits - in fact, 45 states and the District of Columbia have budget shortfalls - and cannot make up the difference with state funds.

Mr. Chairman, it is very misleading to think that because of the caseload reduction credit, states are not requiring recipients to undertake productive activities. The current caseload dropped dramatically, 63% in New York, from January 1995 through December 2001. This was beyond our wildest expectation. No one predicted so many families would leave public assistance. Many are still receiving TANF funded service but are no longer receiving cash. The so-called "effective" work rate doesn't reflect state efforts at putting people to work at all. It has been a longstanding policy of NCSL to support a measure that gives us credit for putting people to work or keeping them from going on welfare in the first place. We have supported giving credit to the states for caseload reduction and are intrigued by your proposal that would maintain the caseload reduction credit, but change the baseline year. We will need to examine the implications further. However, if the caseload reduction were to be removed or limited, an employment credit would more accurately reflect the accomplishments of the TANF program.

Federal statistics about the number of recipients receiving cash who are working under-represent the number of mothers and fathers actively engaged in preparing themselves for life without cash assistance. Under current rules the federal government does not collect this information. Half of the states don't report activities that don't count under the federal definition of activities that count toward the work participation rate, including job preparation. Activities that represent critical steps to self-sufficiency, such as drug treatment, do not count. In New York, about 50% of adults receiving TANF cash assistance are either in a work training activity or actual employment. If exempt adults are removed from the equation, then 70% of nonexempt adults receiving cash assistance are engaged in some level of training or employment. The remainder are mostly in the process of being assessed and assigned to work activities or sanctioned for noncompliance.

Unless they work for the full 30 hours, recipient work efforts cannot be included under current rules. If we value part time work, all hours worked should count. If a recipient who never worked or a victim whose batterer had prevented her from working outside the home is able to work 15-20 hours a week, that's a success to be built on. They also miss the families we have exempted from work - notably parents caring for a disabled child -- and it's worth noting that these families are at high risk of divorce and dissolution, contrary to our shared goal of promoting marriage and family formation. In New York state, 26% of the adults exempted were exempt due to caretaker status of a child under 12 months or as a caretaker of an incapacitated individual; 33% were exempt due to long-term disability which could make them SSI eligible; and 28% were exempt because of short-term disability.

Current law and the President's proposal don't give us credit for those we help who never touch cash assistance and are diverted from the welfare system. I am proud of our TANF funded Wheels to Work Program that helps families with their transportation needs without making them go on welfare. Let me give you an example of how it helped one individual, a grandmother in the rural part of Dutchess County raising her deceased daughters' three kids. She has an $8 an hour job at Wal-Mart. To get to work, she had to spend $8 on taxi fare each way-- in other words, two hours of her earnings every day were consumed by transportation. Our Wheels for Work program helped her buy a car. Now that's an example of how we can wisely use our TANF resources to give an individual the freedom to make a better life for themselves and avoid cash assistance. I would hate to see innovations like these stifled.

As I said before, the TANF program has given each state the freedom to respond to its own unique set of needs and circumstances. What troubles state legislators about the President's plan is not that it focuses on work-- let me repeat that state welfare programs have honored and rewarded work-- but that it will force states to establish community work programs for those on the rolls at the expense of those who have left or have never been on the rolls. If new and inflexible work requirements are added to the program, states, constrained by the fixed sum of money available from the block grant and their own economic difficulties, will be forced to cut back on other TANF funded programs that support work. Programs that could be cut include programs like our INVEST program which provides on-the- job training help for employers hiring welfare recipients and programs that prevent welfare dependency in the first place, such as after school programs to prevent teen pregnancy. Instead, states will have to fund an administration structure to create slots and monitor activities to meet the work participation rates. To do otherwise would leave states vulnerable to substantial fiscal penalties - losing 5% of TANF block grant, backfilling this penalty with state dollars and an increase in 5% for the state maintenance of effort requirement.

While my state has experience with workfare program, few other states have chosen this approach. We have permitted each county to make their own decision - and while workfare is used in some locations, notably New York City, this has not proven to be a useful strategy in more suburban and rural counties. My own attitude is that everyone who is able should give some work effort back to the community while they are receiving public assistance. Still, a welfare recipient who we require to perform public service such as cleaning public parks is still on welfare. If our goals are personal and economic independence, then the place to find them is where Americans have historically found them, in private sector employment. The majority of states have focused on getting welfare recipients into unsubsidized jobs in the private sector -- a proven strategy to increase earnings, promote family stability and end the cycle of dependence. States have succeeded with this strategy, and I am puzzled that Congress and the Administration seem to be considering making it difficult for states to continue this success.

Another troubling feature is that job search and vocational education would not count for the first 24 hours of the work requirement as they do under current law. Job search, often through job clubs, has been an effective means of ensuring placement in the private sector. The focus on work should not come at the exclusion of necessary basic or vocational education including English as a Second Language that would enhance skills, job retention and earnings. NCSL has always urged the federal government to leave the decision on when and how education should count for each client up to the states, similar to other TANF benefit and services decisions. The current policy that limits the amount of time and caps the number of clients engaged in vocational education does not take into account state decision- making. We should have the ability to count educational activities if we choose to include them in our range of job preparation efforts. Both job search and vocational education should continue to count as work.

We strongly support the Administration's proposal to eliminate the two-parent work participation rate and have all families count in one consistent work participation requirement, which will help strengthen families and remove a barrier to marriage.

We appreciate that your legislation and the Administration's proposal attempt to give states more flexibility in counting employability services such as job search, mental health treatment, treatment for substance abuse and education both for 3 months towards the 40 hour work requirement and towards 16 of the 40 hours of the work requirements thereafter. Unfortunately, the work rates overall are less flexible, but recognizing the value of treatment and employment preparation by counting such activity for the work rate, even if in a limited manner, is a positive step. However, since 24 hours of work are required in order for any of the 16 hour activities to count, this is hardly flexible.

In addition, the 24 hour work requirement represents a four hour increase for parents with children under 6 who are required to meet 20 hours under current law. Child care is most expensive for these families with young children and under current law, we cannot compel a parent with a child under six to work without child care assistance.

Finally, it is not clear to us why an increase in the requirement from 30 to 40 hours is necessary. The jobs most readily available to low-skilled workers don't offer 40 hours a week of work, or the hours worked may vary from one week to the next. Hotel workers, for example, found their hours cut back after September 11th. In addition, the Bureau of Labor Statistics reports that the workweek for production or nonsupervisory workers on private payrolls has consistently averaged 34-35 hours over the last decade.

The work requirements will have a different impact on each state because each state sets its own welfare benefit level and eligibility requirements. In fact, under current state law, welfare recipients working at minimum wage at 40 hours a week would be ineligible for cash assistance in 27 states. In 5 states, a recipient working 24 hours a week would make too much to qualify for cash.

CHILD CARE

Increased funding for child care is essential to the continued success of TANF. Mothers and fathers cannot work without safe, reliable child care. In addition to using all of our CCDF dollars, states are currently spending 20% of our TANF funds on child care, yet we still struggle with deciding whether the poor families who have never been on TANF or poor families who are moving off cash assistance or low income poor families who never received welfare but are a crisis away should receive subsidies. By the way, that TANF spending funds more child care than the entire value of the federal Child Care Development Fund.

New York's CCDF funds, even when augmented by TANF transfers, only reach 12% of the eligible caseload. If, as the administration proposes, states are faced with more parents having to work more hours a week, and no new funds are provided, the situation will only get worse. There is simply no way to continue our progress without increased funding for child care. In New York, TANF transfers to child care are more than the value of the federal block grant and these funds mean 76,000 additional subsidies annually.

Mr. Chairman, we strongly support an increase in the mandatory funding of the Child Care Development Fund. I believe that this is a critical support for these families - families on welfare meeting work requirements, families leaving welfare for work and working poor families.

FAMILY FORMATION AND MARRIAGE

While marriage is an issue that transcends discussion of the reauthorization of the TANF program, promoting the formation of stable families is part of ensuring that the cycle of dependency on government programs is broken. Marriage provides important benefits, including economic ones, for adults and children. Government policy should be to support healthy marriages, and, perhaps as critically, not to set up barriers to marriage. While we have made great progress has been in reducing dependence on welfare, state legislators recognize that much remains to be done in addressing the underlying causes of poverty. That includes strengthening two-parent families. State legislators also recognize that not everyone will choose to marry or choose to stay married.

State legislators believe that any federal discussion of the issue of marriage must be based on the following principles:

NCSL recognizes that efforts to salvage some relationships may not be appropriate and there needs to be special awareness of the prevalence of domestic violence, family violence and abuse. Therefore, NCSL supports the family violence option;

Marital status must never be a condition of receiving TANF benefits or services. Because people approaching human services agencies are in a vulnerable position, great care must be taken to respect personal decisions;

Efforts to encourage marriage should respect cultural differences and should be conducted in culturally sensitive ways;

States must have maximum flexibility as they utilize a range of approaches to promote marriage, especially within the finite resources of the TANF block grant. Marriage laws have been the purview of state government, not the federal government;

A central focus of these efforts must be child well-being. NCSL supports efforts to assist parents with parenting skills, even in the absence of marriage, so the children involved have a stable support system, and

Rules for the TANF program and other federal programs must be examined to ensure that they do not penalize couples that choose to marry.

The federal government should consider existing efforts and how those efforts might be strengthened. States are already working to promote marriage outside the TANF program. Some examples of actions states have taken include establishing fatherhood programs, providing incentives for marriage education including reduced fees for marriage licenses, enacting earned income tax credits without penalizing marital status, enacting family law related to both marriage and divorce and creating programs to sustain the marriages of parents of children with disabilities with respite care services. State legislators urge federal policymakers to affirm the value of these efforts.

Mr. Chairman, NCSL supports the President's proposal to use the funds in the current out-of-wedlock bonus fund to create a technical assistance and demonstration fund for states to implement marriage and family formation initiatives including out of wedlock pregnancy prevention. We also support the creation of a fund to expand the ability of states to create new programs in this area. NCSL opposes any efforts to earmark the TANF block grant for the purpose of family formation or marriage. We strongly urge the federal government to provide more technical assistance to states on this topic. We appreciate that you have made it simpler for states to use maintenance of effort funds for services states provide under purposes three and four of the TANF program, promoting marriage and family formation and preventing out-of-wedlock births.

TEEN PREGNANCY

Teen pregnancy has declined, but it still must be a focus of efforts to reduce out-of-wedlock child bearing. NCSL believes that this national problem deserves our full and continued attention. We have found through our research that teen mothers and fathers have worse future outcomes including educational attainment and income than other teens. Over time, we believe, teen parents have much more difficulty remaining self-sufficient and are more vulnerable to economic shifts in the labor market.

CHILD SUPPORT ENFORCEMENT/NONCUSTODIAL PARENTS

Child support enforcement is a critical component of welfare reform and these payments represent an important part of family income. Child support payments can make the difference in a working family living in or moving out of poverty. State legislators have been at the forefront of innovative efforts to improve child support including establishment of orders, collection, enforcement and work with noncustodial parents. We are concerned, however, about unfunded mandates and preemption of state law in any new federal child support law.

Mr. Chairman, NCSL strongly supports the creation of options for states to pass through child support directly to families without having to reimburse the federal government. Thank you for addressing this issue in your bill. Currently federal law requires that state pay not only the state share of collected child support, but reimburse the federal government for their share if the state chooses to pass through support to families. NCSL strongly supports a change in federal law that eliminates the requirement that states reimburse the federal government if the state chooses to pass-through child support to families. This will also strengthen the relationship between fathers, mothers, and their children. It may also lead to reconciliation and/or marriage. Noncustodial parent programs, especially fatherhood programs, are also critical to this effort. We reiterate our concern that as states update their child support legislation, technical assistance is needed to assist the states as they come into compliance with federal goals.

LEGAL Immigrants and refugees

Mr. Chairman, I urge you to reconsider the 1996 provisions that deny eligibility for legal immigrants and certain refugees to the TANF program and to create a state option to provide TANF funded services to these families. The 1996 welfare law eliminated most of the federal safety net that serves legal immigrants and consequently shifted these costs to states. 23 states including New York provide assistance to those families using state funds. Unfortunately, by barring these families from TANF, legal immigrants cannot even access TANF funded services that could make it possible for them to improve their ability to work such as job training and ESL. While some benefits have been restored to some immigrants, much more should be done. The President listened to state lawmakers' concerns on this issue and has proposed restoration of food stamp benefits to legal immigrants. There should be a state option to provide TANF to legal immigrants as well.

WELFARE WAIVERS

NCSL strongly believes that states need flexibility for further innovation. State legislators would prefer to have options, rather than waivers, for policy changes. NCSL strongly believes that states must be able to continue current federal waivers and receive new federal waivers for welfare reform.

Program coordination remains a barrier to state innovation. I was very pleased to hear the President propose a "super waiver" process for demonstration programs that could cut across programs and federal departments. It is very important that we work closely together on the details of this proposal.

SOCIAL SERVICES BLOCK GRANT

Social Services Block Grant (SSBG or Title XX) funds are a vital part of the delivery of community and home-based services to the most vulnerable segments of society including the disabled, elderly, and children in need of protective services. NCSL urges the federal government to fund the SSBG at the level agreed to as part of the enactment of the 1996 welfare reform act, $2.8 billion. New York transfers more from TANF into SSBG than the amount of its SSBG allotment. It is critical that the amount states can transfer from their TANF grants to the SSBG remains at least 10% and is not reduced. If New York can only transfer 4.25% of its TANF grant into the SSBG, that would mean:

21,000 fewer children in subsidized day care;

70,000 fewer adults helped in adult protective services; and

138,000 cases in the child protective services system that would have casework disrupted or delayed.

States use their SSBG funds to provide protective services for children and adults, adult day care, meal preparation and delivery for the elderly, counseling services, and serve the disabled in their homes, rather than in institutions. Further reductions in funding for this grant would mean programmatic losses and service reductions.

Mr. Chairman, that concludes my testimony, I would be very happy to respond to any questions that you and the members of the subcommittee have at this time.



LOAD-DATE: May 1, 2002