[Senate Hearing 114-351]
[From the U.S. Government Publishing Office]
S. Hrg. 114-351
WELFARE AND POVERTY IN AMERICA
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FINANCE
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 29, 2015
__________
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COMMITTEE ON FINANCE
ORRIN G. HATCH, Utah, Chairman
CHUCK GRASSLEY, Iowa RON WYDEN, Oregon
MIKE CRAPO, Idaho CHARLES E. SCHUMER, New York
PAT ROBERTS, Kansas DEBBIE STABENOW, Michigan
MICHAEL B. ENZI, Wyoming MARIA CANTWELL, Washington
JOHN CORNYN, Texas BILL NELSON, Florida
JOHN THUNE, South Dakota ROBERT MENENDEZ, New Jersey
RICHARD BURR, North Carolina THOMAS R. CARPER, Delaware
JOHNNY ISAKSON, Georgia BENJAMIN L. CARDIN, Maryland
ROB PORTMAN, Ohio SHERROD BROWN, Ohio
PATRICK J. TOOMEY, Pennsylvania MICHAEL F. BENNET, Colorado
DANIEL COATS, Indiana ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada MARK R. WARNER, Virginia
TIM SCOTT, South Carolina
Chris Campbell, Staff Director
Joshua Sheinkman, Democratic Staff Director
(ii)
C O N T E N T S
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OPENING STATEMENTS
Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman,
Committee on Finance........................................... 1
WITNESSES
Loprest, Pamela, Ph.D., labor economist and senior fellow, Income
and Benefits Policy Center, Urban Institute, Washington, DC.... 4
Jackson, Aretha J., disabled veteran and TANF recipient,
Washington, DC................................................. 6
Shaefer, H. Luke, Ph.D., associate professor and co-author of
``$2.00 a Day: Living on Almost Nothing in America,'' School of
Social Work and Gerald R. Ford School of Public Policy,
University of Michigan, Ann Arbor, MI.......................... 8
Pierpont, Jon S., executive director, Utah Department of
Workforce Services, Salt Lake City, UT......................... 10
ALPHABETICAL LISTING AND APPENDIX MATERIAL
Bennet, Hon. Michael F.:
``Message to My Fellow Execs: Raise Wages!'' by Tony James,
Politico, October 29, 2015................................. 37
Hatch, Hon. Orrin G.:
Opening statement............................................ 1
Prepared statement........................................... 38
Jackson, Aretha J.:
Testimony.................................................... 6
Prepared statement........................................... 40
Loprest, Pamela, Ph.D.:
Testimony.................................................... 4
Prepared statement........................................... 41
Pierpont, Jon S.:
Testimony.................................................... 10
Prepared statement........................................... 46
Shaefer, H. Luke, Ph.D.:
Testimony.................................................... 8
Prepared statement........................................... 49
Wyden, Hon. Ron:
Prepared statement........................................... 51
(iii)
WELFARE AND POVERTY IN AMERICA
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THURSDAY, OCTOBER 29, 2015
U.S. Senate,
Committee on Finance,
Washington, DC.
The hearing was convened, pursuant to notice, at 10:10
a.m., in room SD-215, Dirksen Senate Office Building, Hon.
Orrin G. Hatch (chairman of the committee) presiding.
Present: Senators Grassley, Cornyn, Thune, Toomey, Wyden,
Stabenow, Cantwell, Nelson, Menendez, Cardin, Brown, Bennet,
and Casey.
Also present: Republican Staff: Becky Shipp, Health Policy
Advisor; and Chris Campbell, Staff Director. Democratic Staff:
Laura Berntsen, Senior Advisor for Health and Human Services;
and Joshua Sheinkman, Staff Director.
OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM
UTAH, CHAIRMAN, COMMITTEE ON FINANCE
The Chairman. This hearing will come to order.
I want to welcome everyone to this morning's hearing on
``Welfare and Poverty in America.'' The great American poet,
Walt Whitman, wrote, quote, ``What a devil art thou, Poverty!
How many desires--how many aspirations after goodness and
truth--how many noble thoughts, loving wishes toward our
fellows, beautiful imaginings thou hast crushed under thy heel,
without remorse or pause!''
I think everyone here shares Mr. Whitman's sentiments about
the crushing and remorseless nature of poverty. And while we
may have some disagreements on how best to address this issue,
all of us have an interest in trying to find more ways to
effectively and efficiently alleviate poverty in America.
Today's hearing will attempt to provide some clarity around
issues of poverty, the effect it has on children and families
in the United States, and the role that the Federal programs,
particularly the Temporary Assistance for Needy Families
program, currently play in mitigating poverty.
Poverty is a critical challenge for our Nation, and far too
often children end up being the primary victims. Recent
official poverty statistics reveal that one out of every five
children in the United States lives in poverty. That is
pathetic. Some argue that the problem is even more widespread.
But regardless of the frequency, we know that poverty greatly
increases the risks for a number of negative outcomes among our
children.
In some communities, a cycle of deep poverty persists
generation after generation. Often, these families live below
the radar, unseen by many. Day to day life for families in deep
poverty is fraught with difficulty and constant stress. To make
a bad situation worse, this unending toxic stress often leads
to a number of mental and physical health issues.
Unfortunately, there is no easy solution to addressing
issues associated with poverty. Policymakers have been arguing
for years about the best way to address poverty. For a long
time, programs which provided cash assistance to women and
children did little to encourage work and, in many cases,
perpetuated the cycle of poverty.
History has shown us that the best remedy to poverty,
especially the cycle of poverty, is a well-paying job. But I
believe that most people in poverty do want to be gainfully
employed. I also recognize, however, that in many cases,
individuals face significant barriers to successful employment
that can be difficult to surmount.
The welfare reforms in the 1990s which transitioned welfare
from an individual entitlement into a capped funding stream
produced mixed results. The number of families on welfare has
declined dramatically, going from a peak of 5.1 million in 1994
to 1.6 million in 2015. However, the poverty rate in 2014 was
nearly the same as it was prior to welfare reform.
Many families who are eligible for assistance through TANF
do not receive it. Oftentimes, States do not engage TANF
recipients in robust activities designed to help them obtain
and keep a job. The TANF benefit itself is very small, ranging
from only $170 to $923 a month for a family of three. However,
while that may seem like a relatively small amount per family,
the Federal Government still spends billions of dollars in an
attempt to address poverty each year.
In TANF alone, the Federal Government and the States spent
nearly $30 billion in fiscal year 2014. Unfortunately, the
smallest expenditure was directed toward work program
activities, while the largest expenditure was spent on what
States report as, quote, ``other expenditures,'' unquote.
There is no definitive definition of what these other
expenditures are, but we do know that nearly $11 billion are
spent on them each year. And despite these clear issues with
the program, prior efforts to reform TANF have not been
successful.
I think it is fair to say that many on both the left and
the right would agree, although for different reasons, that
TANF, the Federal Government's welfare flagship, is in need of
reform.
From 2001 to 2005, many of us here in Congress tried to
reauthorize and reform TANF. Senator John Breaux from Louisiana
and I spearheaded the so-called ``tripartisan'' proposal to
reform TANF. This proposal ultimately became the basis of then
Chairman Grassley's PRIDE bill, which, in a disappointing
display of partisanship, was ultimately filibustered by the
Democratic minority.
Several years ago, I wrote a letter to President Obama
indicating my willingness and desire to work with him on
welfare form. That letter has never been answered by the
President. What is more, the Obama administration has never put
forward a proposal to reauthorize TANF. Instead, this
administration has attempted to bypass the Congress and create
regulatory schemes not authorized under the statute in order to
undermine key features of welfare reform, including the work
requirement and child support enforcement.
In other words, welfare programs and the individuals they
are designed to help have become just another pawn in the
endless partisan conflict between the Obama administration and
Republicans in Congress. I think this is unfortunate, and it is
precisely the reason why so many people are skeptical about any
progress being made on poverty and welfare in the near future.
Unfortunately, until the administration adopts a different
posture with regard to these programs, I am afraid that this
skepticism will continue to be well-founded.
However, we do things differently here in the Senate
Finance Committee. Even if the administration continues to
double down on an unproductive position, I believe we need to
continue to explore issues associated with poverty and keep
searching for ways to improve welfare in this country. That, in
my view, is the best way to keep moving toward the reforms that
TANF needs so badly.
That is why we are here today. I look forward to a robust
discussion of these important issues.
[The prepared statement of Chairman Hatch appears in the
appendix.]
The Chairman. As soon as Senator Wyden comes, we will
interrupt whatever we are doing to have his opening remarks.
Now, let me take a few minutes just to introduce our
distinguished panel of witnesses.
First, we will hear from Dr. Pamela Loprest, a labor
economist and senior fellow for the Income and Benefits Policy
Center at the Urban Institute. She has worked for the past 2
decades on research regarding low-wage labor markets and
barriers to work among disadvantaged populations. Dr. Loprest
is a nationally known expert in welfare and policy research, as
well as co-author of a book, ``Leaving Welfare: Employment and
Well-Being of Families That Left Welfare in the Post-
Entitlement Era.''
Second, we will hear from Aretha Jackson, a veteran and
TANF recipient. Ms. Jackson was born in Prince George's County,
Maryland and grew up in Washington, DC. She joined the U.S.
Regular Army Reserves immediately after graduating from high
school, and 2 years later was released from active duty on a
pregnancy discharge. She later joined the DC Army National
Guard, where she served for 12 years.
In 2006, Ms. Jackson rejoined the U.S. Army and served in
Iraq. She offers an important perspective to this panel, as a
single mother of two, a prior TANF recipient in Maryland, DC,
and Hawaii, as well as having experienced homelessness twice
before in her life. She is a disabled veteran and currently in
her second year of training as a veteran service representative
for the VA in Philadelphia. She is a graduate of Chaminade
University of Honolulu.
Third, we will hear from Dr. Luke Shaefer, associate
professor at the University of Michigan School of Social Work
and the Gerald R. Ford School of Public Policy. Dr. Shaefer's
recent work explores rising levels of extreme poverty in the
U.S., the impact of SNAP on material hardships, and barriers to
unemployment insurance faced by low-earning workers. Dr.
Shaefer has also co-authored ``$2.00 a Day: Living on Almost
Nothing in America.''
Finally, we will hear from Jon Pierpont, Executive Director
at Utah's Department of Workforce Services since December 2012.
Mr. Pierpont oversees a $1.5-billion budget and a department
tasked with administering Federal and State programs, including
workforce development, eligibility services, public assistance
programs, and unemployment insurance.
Mr. Pierpont has over 20 years of experience with Workforce
Services, serving previously as the Deputy Director,
Eligibility Services Division Director, and leading the
Department's largest service area. Under Mr. Pierpont's
direction, the Department has saved over $33 million. He is a
graduate of the University of Utah and a dedicated public
servant.
So I want to thank each of you for being willing to appear
here today, for your diligent work and the service that you
have rendered, as well as your willingness to testify and
answer questions today.
Each of you will give your testimony in the order in which
you were introduced. I would like to remind you to please limit
your initial remarks to 5 minutes so we will have some time for
questions.
Dr. Loprest, please proceed with your opening statement.
STATEMENT OF PAMELA LOPREST, Ph.D., LABOR ECONOMIST AND SENIOR
FELLOW, INCOME AND BENEFITS POLICY CENTER, URBAN INSTITUTE,
WASHINGTON, DC
Dr. Loprest. Thank you. My name is Pamela Loprest. I am a
senior fellow and labor economist at Urban Institute, an
economic and social policy research organization. The views I
present here today are my own.
I would like to make the following points today. First, the
TANF program is increasingly playing a smaller role in
addressing poverty, even for the most needy.
Second, many poor mothers who are not receiving TANF are
also not working.
Third, there are solutions to bring these families out of
poverty. I discuss two. First, improving access to TANF and,
second, investing in these mothers' skills to improve their
opportunity to work.
TANF caseloads have declined and remained low. As the
chairman said, in the last 15 years, TANF caseloads have fallen
30 percent to about 1.6 million families today. Over the same
time period, the percent of families in poverty, though, has
grown. Only about one-quarter of families in poverty receive
TANF benefits. In 10 States, fewer than 10 percent of families
in poverty receive TANF benefits.
Many families eligible for these benefits do not receive
them. The TANF participation rate--the number of families
receiving TANF assistance relative to the number eligible for
benefits--has declined from 79 percent in 1996 to 32 percent in
2012. This means only about one-third of all families eligible
for TANF receive these benefits.
By comparison, the participation rate for SNAP was 83
percent in 2012.
The low participation rate in TANF should be cause for
concern. TANF eligibility rules are such that only very poor
families--in most States, well below the poverty line--are
eligible for these benefits. Even as TANF seeks to move
families from benefits receipt to self-sufficiency, families in
need should be able to access this assistance.
In addition, the share of single mothers who are not
working and not receiving TANF has increased over time. This
increase shows not only that TANF is failing to reach many
eligible families, but those families are not working--the aim
of the TANF program and the main avenue out of poverty. While
some of these mothers have exhausted TANF benefits, many have
never received TANF.
Why are so many poor families not receiving TANF benefits?
Well, families lack accurate information about the program and
have difficulty accessing the benefits. Some mothers do not
know that they might be eligible or have misinformation about
what is required. Many who have tried to get TANF found the
process difficult.
Programs had long wait times, required multiple visits,
lots of paperwork, and intrusive questions. Finally, some
mothers lost benefits after hitting time limits, but they were
still unable to find work.
Why are so many poor single mothers without work? If these
mothers could find jobs and overcome challenges to keeping
those jobs, their circumstances would no doubt be improved.
They have difficulty finding and sustaining work for many
reasons, including lack of access to child care and reliable
transportation, physical and mental illness, and low skill
levels. Roughly a third have less than a high school education.
Further, there are few jobs available in many of the
communities in which these poor mothers and children live.
What can we do to help families in poverty who do not have
cash assistance or earnings? First, we can help families access
TANF. The TANF program should work to correct misinformation
and misunderstanding and increase incentive for States to
improve access.
At the Federal and State level, there are examples from
other programs of ways to streamline access that provide
lessons for improvements to TANF. However, as the chairman
noted, TANF benefits are low in many States and are temporary.
So, while important, TANF receipt alone is not the answer to
helping families move out of poverty.
Second, we should invest in skills to increase work. Work
is the path to a better life for the majority of parents and
their children, and poor single mothers are no exception.
Rigorous evidence from studies of a number of different
employment and training programs showed significant
improvements in employment and earnings are possible, even for
families with significant work challenges.
We need to make changes to TANF policies that encourage
greater spending by TANF programs in work-related activities.
The amount of funds spent per case is far below the cost of
programs that have been demonstrated to improve work and
earnings for poor, low-skill families.
In addition, we should better integrate TANF work programs
with the broader publicly funded workforce system. In practice,
in many States, this has not been the case. The Workforce
Investment and Opportunity Act includes movement in this
direction. Federal policymakers need to reduce obstacles in
TANF policy to aid this integration.
In conclusion, one of the important successes of U.S.
policy in fighting poverty is the movement to make work pay for
low-wage workers. The Earned Income Tax Credit, SNAP, and other
programs lift millions of people out of poverty. However, for
poor women without work, our work-based safety net is of
limited assistance.
Investing in ways to improve the work prospects of poor
single mothers through the TANF program and other publicly
funded workforce programs is an important goal. Improving
access to TANF for these poor mothers is another important
goal.
Thank you.
[The prepared statement of Dr. Loprest appears in the
appendix.]
The Chairman. Ms. Jackson, we will take your testimony now.
STATEMENT OF ARETHA J. JACKSON, DISABLED VETERAN AND TANF
RECIPIENT, WASHINGTON, DC
Ms. Jackson. Hello, Chairman Hatch, Ranking Member Wyden,
and other distinguished members of the committee. My name is
Aretha J. Jackson. I was born in Prince George's County,
Maryland. I grew up in the projects of Washington, DC. I am a
graduate of District of Columbia public schools. I served in
the United States Army, Army Reserves, the District of Columbia
Army National Guard, and I have an associate of arts degree in
liberal arts. I graduated cum laude with my bachelor of arts in
psychology.
I have struggled with poverty my entire life. I have been
homeless twice in my life, a single parent of two, and have
received TANF assistance for needy families a number of times
in multiple States, including Hawaii and the District of
Columbia.
I am a disabled veteran, currently in my second year of
training as a veteran service representative in the Pension
Management Center at the Department of Veterans' Affairs in
Philadelphia, PA.
My personal experience with TANF, with the TANF program,
varies based on the time, the place, and the regulations. The
one thing that remained consistent was the negative attitude of
most of the individuals who worked as examiners. The attitude
was one of superiority.
As you know, the program has evolved over the years. I
first started receiving welfare in 1991. It was not difficult
to get food stamps and cash assistance. The housing assistance
program in DC helped me with my security deposit and furniture
for my first apartment. The program focused on getting my basic
needs met, which allowed me to focus on my child and getting
back into the workforce.
In 2001, after getting pregnant with my son, I quit my job
and reapplied for public assistance, this time in Maryland. The
program in Maryland told me of all the regulations and
requirements I was to meet, but did not offer a plan of action
to accomplish these unrealistic goals.
Because my house foreclosed, I had to move back in with my
mother in Washington, DC. Thus, my case in Maryland was closed,
opening a TANF case with the District. I was enrolled in a
resume-writing class, and the programs back then in 2001 were
okay.
I returned to work after September the 11th. In 2003, my
mom put my children and me out and we lived in temporary
housing in Bolling Air Force Base and then moved to housing in
Fort Myers.
A few months later, I was homeless again. I was not
equipped to help myself or anyone else at that time. In 2006, I
got married and reenlisted in the United States Army. By 2007,
I had gone to war and got a divorce.
In 2009, I was discharged from active duty because my
family care plan failed. Once again, I found myself unemployed
and in need of Temporary Assistance for Needy Families. This
time I was in Hawaii, and the program was totally different. I
was required to volunteer 30 hours per week after completing
workshops to help me build a resume, improve interviewing
techniques, conduct a job search, and negotiate salaries.
I enrolled in college and was allowed to attend class in
lieu of volunteer work. After graduating college, I moved back
to DC and applied for the clinical psychology program at Argosy
University in Rosslyn, VA. This is where I learned that I was
experiencing PTSD, anxiety, and depression. I failed a very
important class and was removed from the program. Once again, I
needed help.
This time, the TANF program was different from every other
time. I was required to attend America Works of Washington, DC
in order to keep receiving my assistance. America Works is an
organization that assists individuals in finding employment,
but this program also helps in a way no other program has. The
employees at America Works helped me to see myself as a
productive person again. I was able to share personal
information with Jennifer Tiller that kept me from committing
suicide, and together we were able to get me the services I
needed from the VA employers.
Employers visited America Works weekly. They interviewed
candidates and hired people all the time. There is a glory bell
in the lobby for individuals who get a job to ring. Every time
the bell went off, you could feel the joy in the air.
Jennifer was tough on all of us. At the same time, she
showed that she cared. The information and partnership America
Works provided helped me to obtain full-time employment with
the Department of Veterans' Affairs.
TANF programs across the Nation need assistance. If we had
more organizations like America Works of Washington, DC, people
would be more willing to return to work.
Thank you for your time, and I look forward to your
questions.
[The prepared statement of Ms. Jackson appears in the
appendix.]
The Chairman. Thank you, Ms. Jackson.
Dr. Shaefer, we will turn to you.
STATEMENT OF H. LUKE SHAEFER, Ph.D., ASSOCIATE PROFESSOR AND
CO-AUTHOR OF ``$2.00 A DAY: LIVING ON ALMOST NOTHING IN
AMERICA,'' SCHOOL OF SOCIAL WORK AND GERALD R. FORD SCHOOL OF
PUBLIC POLICY, UNIVERSITY OF MICHIGAN, ANN ARBOR, MI
Dr. Shaefer. Thank you for the opportunity to speak with
you today. In 2010, my colleague, Kathryn Edin, a qualitative
researcher of American poverty for over 2 decades, began to
encounter more and more families in conditions that were
strikingly different from what she had seen a decade and a half
earlier.
These families did not just have too little cash to live
on, they often had no cash at all. And while some claimed
benefits like SNAP, to Edin, it seemed the absence of cash
permeated every aspect of their lives.
Had the number of American households with children
surviving on virtually no cash increased? Edin and I looked
first to the Survey of Income and Program Participation, which
yields the largest estimate of income among poor families, and
as of 2011, we found that in any given month, there were 1.5
million households with 3 million children reporting cash
incomes of no more than $2 per person per day, up 130 percent
from 15 years prior. We examined numerous other data sources
too, and all pointed to the consistent story of worsening
conditions faced by our Nation's poorest families.
How do families end up in such extreme circumstances and
what are the consequences? In search of answers, we sought out
families who were experiencing extreme poverty in different
parts of the country, and we published our results in a book,
``$2.00 a Day.''
A clear theme emerged from our research. Families we met
envisioned themselves, first and foremost, as workers. Rae
McCormick of Cleveland says, ``My dad raised me that you work
for everything you have.'' And when we asked families to
imagine a better life, the near universal response was that
they would be working in a job with stable, full-time hours,
paying $10 to $12 an hour.
Yet, devotion to work is not enough to shield these
families from spells living on virtually nothing. The labor
market they compete in is unforgiving. Parents can apply for
dozens upon dozens of jobs to no avail, and, when they do find
work, it is often in the service sector where they must manage
considerable instability.
Jennifer Hernandez in Chicago had been hunting for work for
10 months while living in homeless shelters with her two
children, and when she finally landed a position at a small
family cleaning business, at first she liked the work. It
included cleaning vacant apartments and office buildings. But
as the Chicago winter set in, the workload shifted mainly to
foreclosed homes.
Jennifer reports that these homes had no power, no working
lights, no heat. The cleaning crew never knew what to expect--a
crack house? Lack of running water meant that Jennifer's team
would bring their own in buckets, but it would quickly turn
pitch black and off they would go to a neighbor's home or the
nearest gas station to refill and carry the heavy buckets back
to the job.
Breathing in cold, moldy air, Jennifer's immune system
weakened. She caught viruses and passed them on to her kids. As
she called in sick more frequently, her boss marked her as
unreliable and her hours and paycheck plummeted.
She had a few months left of guaranteed housing, a benefit
she received from the shelter when she got work. She decided to
quit her job so she could get well and look for the next one.
It took 10 months to find this job. How long would it take to
find the next?
Sometimes unstable relationships led to job loss. Rae
McCormick insists that the shifts at her local Walmart were the
best part of her week outside of the time she got with her 2-
year-old, Azara, when her ``uncle George'' and ``aunt Camilla''
were out of the Cleveland home they shared. In just 6 months,
she was named cashier of the month twice because she had this
ability to memorize the 4-digit bar codes of popular produce
items. She would read the bar codes into a recording device and
set it to play on repeat as she slept. ``My subconscious did
the job,'' she says.
But one day she climbed into George's pickup and the gas
light flashed on. She had spent her entire paycheck on rent,
groceries, and diapers and given George $50 for gas to take the
truck to work. Yet, he had emptied the tank over the weekend,
and Rae called her manager in a panic, could anyone help her
out, and her manager replied that if she could not get to work,
she should not bother coming in.
None of the families in our study thought of TANF as a
viable lifeline. When we asked Modonna Harris, a mother of one
living in family homeless shelters in Chicago, if she had
considered applying, she told us, ``Oh, they just aren't giving
that out anymore.''
After months without a job, Rae McCormick finally went down
to the welfare office. She reports that a case worker told her,
``Honey, I'm sorry, there are just so many needy people, we
don't have enough to go around.''
If a family accesses programs like SNAP, do they really
need cash? Beyond the high rates of material hardships we saw,
the best evidence that cash matters is the lengths to which
families will go to generate just enough to buy decent clothes
at a thrift store or stay in their home for one more night.
Jessica Compton in Tennessee donates her blood plasma for
$30 up to twice a week, as often as the law will allow. When we
met her, plasma sales were her family's only source of cash
income. After the procedure is over, Jessica says, ``I get
tired, especially if my iron is down, I get like really
tired.'' She has an obvious indentation in the crease of her
elbow, a small scar from giving plasma so much, which we saw
over and over again across the country.
The families we met very much subscribe to the American
ideal, although sometimes they did not have the resources to
reach it. They want to work in a decent job, they want a safe
place to live, and they want to do right by their children.
The more we can align policy and programs to help them meet
these goals, the more we, as a country, will have done right by
Jessica, Jennifer, Modonna, and Rae.
Whatever assistance I can provide to you with this goal in
mind, I am at your service.
[The prepared statement of Dr. Shaefer appears in the
appendix.]
The Chairman. Thank you so much.
Mr. Pierpont, we will hear from you now.
STATEMENT OF JON S. PIERPONT, EXECUTIVE DIRECTOR, UTAH
DEPARTMENT OF WORKFORCE SERVICES, SALT LAKE CITY, UT
Mr. Pierpont. Chairman Hatch, Senator Wyden, and members of
the Senate Committee on Finance, thank you for the opportunity
to address you.
I want to start with a brief story. A few months ago I had
the opportunity to visit with a mother named Melody. Melody
grew up in poverty and remains there today along with her two
children.
I was moved by Melody's strong desire and motivation for
finding a path out of poverty and providing increased stability
and opportunity for her sons. But it was something that she
said later that reveals the importance of Utah's efforts to
decrease the number of children caught in the cycle of poverty.
She said, ``There are a lot of brilliant minds lost in
poverty.'' We have come to learn that, even in Utah, where our
economy is incredibly strong, there are thousands of families
still facing barriers to self-reliance and lost in poverty.
Utah's economic success is allowing us to focus on families
struggling to break free from the cycle of poverty passed from
one generation to the next. We refer to this cycle as
intergenerational poverty.
In 2012, the Intergenerational Poverty Mitigation Act was
adopted to address the needs of struggling families. The act
distinguishes between two types of poverty--situational poverty
and intergenerational poverty--recognizing that for the
majority of people, utilization of public assistance is brief
and temporary, but for others, no amount of support leads to
self-reliance.
The act also requires the Department of Workforce Services
to release an annual report analyzing data regarding families
experiencing intergenerational poverty. The report focuses on
four areas of child well-being: family economic stability,
early childhood development, education, and health. The level
of research and analysis contained in the annual report is
unprecedented. We have gathered data across multiple State
agencies, revealing correlations between intergenerational
poverty and childhood risk factors.
In each area of childhood well-being, children experiencing
intergenerational poverty are struggling. They have limited
access to high-quality early childhood programs and experience
poor academic outcomes. Their parents are only sporadically
attached to the labor force, and they are experiencing much
higher rates of abuse and neglect relative to other children.
The data contained in the reports is utilized by the
State's Intergenerational Welfare Reform Commission to develop
evidence-based solutions to reduce the number of children
living in intergenerational poverty. The Commission includes
the five Executive Directors from the State agencies serving
the needs of Utah's vulnerable families. The agencies work to
improve coordination of services and programs, share data, and
evaluate internal policies. Three of the members serve in the
Governor's cabinet, including myself.
By aligning programs and sharing data, our agencies are
breaking down the silos that often arise in government. By
focusing on families, we are supporting their efforts to build
a brighter future for their children. These efforts are not
leading to new services or massive additional programs that
incur more government spending. Rather, we are more effectively
leveraging resources already in place in our communities and
across both the public and private sectors. This alignment
removes barriers for families working toward economic
independence without burdening taxpayers with additional costs.
I would like to briefly provide one example of program
alignment. That is our two-generation test program called Next
Generation Kids. As a part of our research, we evaluated our
TANF cash assistance program, which focuses exclusively on
employment of the parent. However, we have found that adults
often cannot truly be successful when the needs of their
children are not being met.
As a result, we modified our program so that while we are
engaging the parents to get them employed, we are also ensuring
that those parents are meeting the basic needs of their
children. Although Next Generation Kids has only been in
existence for 1 year, it is improving the lives of families
like Melody's, who is also a program participant.
Utah is committed to this effort. We are taking the
research into local communities across our State and empowering
local leaders to take the first steps. The research clearly
shows the impact of this unique form of poverty, which is why
we need a unique approach to understand it and address it.
Utah believes strongly in the potential of individuals like
Melody. She is one of those brilliant minds lost in poverty. We
cannot afford to ignore those brilliant minds. We must empower
these families to succeed and equip their children to escape
poverty, which, in turn, will allow our economy to flourish.
We will continue to learn and apply new information to our
methods, and we will hope to share our successes and failures
with other States working to empower families to achieve their
greatest potential.
Thank you.
[The prepared statement of Mr. Pierpont appears in the
appendix.]
The Chairman. Well, thank you. We appreciate all four of
you and your testimony here today. It is very helpful to us.
Let me start with you, Director Pierpont. I want to thank
you for being here today--and all of you--and for all the good
work you are doing out there in Utah.
I listened with great interest to your description of what
it took to get this intergenerational poverty initiative
underway. I would note that this effort began as a partnership
between a liberal child advocate, Karen Crompton, and a
conservative State Senator, Stuart Reid. I think we can all
take a lesson from this bipartisan alliance.
I was particularly interested in the Next Generation Kids
program. What are your plans with the Next Generation Kids
program moving forward, and what are you learning from this
test program, and are you planning on expanding it?
Mr. Pierpont. Thank you, Senator Hatch. We started our Next
Generation Kids project in an area of our State called Ogden,
UT. We targeted Ogden because they had a higher concentration
of intergenerational poverty families in that area.
We started with 32 families, tried to design the program to
mirror what we have learned with the data research, and we have
been working in this particular area for almost 1 year now. So
we are summarizing what has been working and not working in
regard to the initial year's period.
Our plan is to continue to learn from the data, learn from
the strategies that are in place with those families. We have
expanded--actually, it is a unique approach, because we have
our staff actually in James Madison Elementary in Ogden. It
gives us an opportunity to interact with the parents more
frequently and the kids to ensure that the kids are doing well
in school, that their basic needs are being met. And so we are
right there in the school, and I think we have learned a lot
just by being amongst the kids there.
We are about to expand to an area in Salt Lake City called
Kearns, and this particular extension of Next Generation Kids
will focus on middle school kids. So we are trying to learn
from the elementary school kids and now the middle school-aged
kids as we continue to work toward effective ways of serving
the families.
One more area that we are about to move to in January is an
area called Glendale in Utah, and we will be actually at a Head
Start facility there to engage that program in how best to
serve those families in that setting.
So we are learning a lot. We have seen some successes, and
we have seen some failures. We have seen some people drop out
of the program, some mothers. We have seen many get employed.
We are seeing some stability with the children.
So we will continue to learn, and that is the idea: using
the data to learn from the experiences of our interaction with
multiple partners. This is not a government thing only. It
includes the schools; it includes community partners. There is
a real collaboration going on in Ogden and those other two
schools that I think will help us determine what are the best
approaches so that we can succeed for the children and help
support the adults.
The Chairman. Thank you.
Ms. Jackson, let me ask you a question. I want to thank you
for your service to our country and for your courage in coming
here and telling your story today.
Based on your testimony, you have had several experiences
with the welfare system, and it was not until you were referred
to America Works that your needs were adequately met--at least
that is what I have interpreted.
Can you elaborate on what was so different about America
Works, and, particularly, can you describe what made Ms. Tiller
so helpful and effective?
Ms. Jackson. Well, with America Works, they were an
organization, when you went in, they addressed you as an
individual. They did not treat you as though you were just
somebody on welfare or somebody looking for a handout. They did
not treat you like it was their resources that they were giving
to you.
What happened was, they showed interest in me. At that time
when I was required to go to America Works, I was not
interested in going. I had just flunked out of graduate school.
I was depressed. And I did not want to live anymore. But
because of my children, I went.
As a matter of fact, one of my children told me, ``Ma, you
should just go. Just go.'' And then when I did go, I was able
to come back and tell them, ``You know, I met this lady named
Ms. Jennifer Tiller.'' And she helped me to get the services
that I needed in DC from the VA, because I had moved from
Hawaii back to DC.
And America Works is not--I joined the military straight
out of high school, so I never knew how to apply for a job
outside the military. Everything that I had done had been
military--back and forth, active duty, off active duty, on
welfare, off welfare.
But when I went to America Works, Jennifer had a team, and
the team looked at my resume and looked at my experiences over
the years. And they highlighted and told me what they saw based
upon what I had accomplished, even though I did not see that in
myself.
So the thing that made America Works different from
everywhere else that I had gone is they helped me to see me as
a productive individual, and they helped me to implement that
to the point where I was able to actually obtain employment.
The Chairman. Thank you. My time is up.
Senator Cornyn, you are next on the list.
Senator Cornyn. Thank you, Mr. Chairman. Thank you for
having this very important hearing. This is a subject that is
long overdue for reconsideration.
I think one of the goals of our welfare system ought to be
to equip people to become self-sufficient, and anything that
detracts from that I think ought to be discouraged.
I also think that, in addition, we ought to make sure that
people who have a responsibility to support their own families
are doing that as well. And I note that for TANF, for example,
the child support enforcement is an important part of what that
program requires.
I happen to have had some experience as Attorney General
collecting child support for more than 1 million children who
were not being provided the financial support from their own
parents that they legally are entitled to and that they need in
order to, hopefully, not live in poverty.
I also think we need to look at further encouraging work
requirements. And I would guess that even on a volunteer basis,
Ms. Jackson, your working on a volunteer basis helped equip you
with skills that made you more employable or made you more
attractive to prospective employers. Is that correct?
Ms. Jackson. That is correct, yes.
Senator Cornyn. I am just curious. How long had you served
in the military?
Ms. Jackson. I did a total of 18 years.
Senator Cornyn. Did you experience the problems you have
testified to while you were in the military or only once you
separated from the military?
Ms. Jackson. While I was in the military.
Senator Cornyn. So you were qualifying for welfare benefits
even though you were receiving pay as an active duty military
person.
Ms. Jackson. No. I was active duty, and then I went into
the DC National Guard and the Reserves. So I was a weekend
warrior.
Senator Cornyn. Well, we all know that those weekend
warriors are much more than weekend warriors now.
Ms. Jackson. Yes.
Senator Cornyn. So I just have a question for the other
three witnesses, if you would care to comment on it. TANF has,
as I said, a child support enforcement or financial
responsibility for parents, but that does not apply to any
other welfare benefit, to my knowledge.
Do you see any problems or difficulties in extending that
responsibility to parents to help provide for their own
families by making that one of the requirements of welfare
benefits?
Maybe, Mr. Pierpont, you could start.
Mr. Pierpont. Certainly, I think that child support
enforcement is an important aspect of individuals becoming
self-reliant. So, yes, it is specific to TANF in many cases.
If there is an opportunity to expand that to other
entitlement, public assistance-type programs, I think that
would be beneficial to that individual who is trying to balance
work, as well as support their family.
So I would be in support of moving in that direction.
Senator Cornyn. Dr. Shaefer?
Dr. Shaefer. I think, in my opinion, I would start where
you, Senator, started with your comments, with the jobs piece.
So, coming out of our research and ``$2.00 a Day,'' expanding
economic opportunity and expanding the number of jobs through
subsidized jobs creation I think would actually go a long way
to improving the ability of families to care for their own
children.
My co-author knows more about child support. I would be
happy to connect with her on that. But I think the best thing
we could do to make sure especially fathers, nonresidential
fathers, pay child support is to improve their access to jobs,
which they, in particular, have trouble accessing often.
Senator Cornyn. Dr. Loprest?
Dr. Loprest. I would just add that, as you may know, many
of the fathers of the children also are very poor and have
limited funds to pay. So child support enforcement is
incredibly important, and fathers should be helping to support
their families, but there is this conundrum of, you cannot get
money where there is not money.
So I mainly would like to make sure that adding something
like that does not make people ineligible or unable to get
something like SNAP, because it is so important for their
families. We do not want to add roadblocks, while I understand
the importance of child support enforcement.
Senator Cornyn. Mr. Chairman, I will just close on this. I
had the experience of getting out of an airplane in El Paso,
TX, and a gentleman came up to me and said, ``You put me in
jail,'' and I did not know what to expect after that statement.
But what he told me is that his wife, his former wife, denied
him visitation with his children in exchange for not requiring
him to pay child support, and it strikes me that those children
were two-time losers.
They lost the love and association with both parents and
the financial support of both parents that they have a legal
right to expect. So as a consequence, frequently, when parents
do not support their own children, then the taxpayer has to
pick up the tab.
But actually the story ended well, because he told me that
once we took him to court and the judge ordered him to pay
child support, he also ordered his former wife to let him see
the kids. And he told me, ``We are back together again as a
family.'' So a happy ending to that story.
The Chairman. I am glad to hear that, I will tell you.
Senator Wyden, Vice Chairman Wyden?
Senator Wyden. Thank you very much, Mr. Chairman. I want to
apologize to all our guests. We also are dealing with the
budget agreement on the floor, which is very important to a
whole host of domestic programs. I think it was the judgment
that we have Chairman Hatch here and I would go to the floor,
and I think, to some extent, we will be shuttling back and
forth.
I am going to spare all of you my opening statement and
just ask one question.
The late President Reagan said, and I think it really says
it all, that the very best program, the best program in this
space is a job. That was the judgment of a conservative
Republican who has been looked to for literally decades for the
philosophical underpinnings of the party.
I gather, before I came in, you all have had some
discussion about employment. Perhaps we could start with the
authors of this wonderful book that I enjoyed reading, we could
start with a discussion of what you think the best way is for
people to get these jobs, these entry-level positions, and then
how you evaluate the programs.
I would be interested in hearing your thoughts on that to
start with. What is the best path for people to get these jobs
in the private economy, and how best should we go about, as
legislators, trying to evaluate which programs work and which
do not?
So why do we not just go right down the line?
Dr. Loprest. Sure. Thanks. So, as I referred to in my
testimony, there are a number of rigorous evaluations of
different programs, many focused on----
Senator Wyden. Start with the first part of the question--
what is the best path for people to get the jobs?--and then
we'll talk about the evaluations.
Dr. Loprest. Yes. So the best path to get the job----
Senator Wyden. Right.
Dr. Loprest [continuing]. For the individuals who have
tried, been out there in the labor market, maybe had sporadic
work and lost it, is to get assistance from programs, as Ms.
Jackson said, in how to get prepared to look for work, how to
best do that, and to gain the necessary skills to be able to
get that job.
So having assistance and programs that can help people with
that so that they can go out and get the job, that is the best
way.
Senator Wyden. Is there a program that you think is one of
the best models we should be looking at?
Dr. Loprest. There are a number of really good programs.
Senator Wyden. Give one or two examples.
Dr. Loprest. There are a number of programs that are
dealing in what we call sectoral space, like looking at
industries and trying to work with industries and employers in
those industries to get people, low-skill people, into jobs and
a foot in the door.
There is an evaluation of three of these sectoral programs.
One is Instituto in Chicago, doing wonderful work in helping
people get better-skill jobs; JVS in Boston, another one that
worked to help people; and America Works is a program that Ms.
Jackson mentioned.
There are programs that are doing this and really being
successful.
Senator Wyden. Others? Ma'am?
Ms. Jackson. I think the first thing that we need to
address is building self-efficacy, because when we are unable
to see ourselves equipped or able, when we are stuck in our
environment, the world is not where we actually live. We live
only in our communities and in our environments, because we are
not involved with the workforce and with the outside world, per
se. So I think starting there is very important.
The other reason why I say that is because I believe that
is where America Works started with me. Jen and her crew, they
offered all of the resources to help me get a job. But had she
not dealt with me and my personal issues, not like a
psychologist or whatever, although they did have a few neat
trainings, had she not dealt with that, I still would not have
been employed.
Senator Wyden. Very good.
Dr. Shaefer?
Dr. Shaefer. I would concur with what has already been
said, but I would also just say, coming out of my experience
writing ``$2.00 a Day,'' I firmly believe we need to do
something to increase the number of job opportunities for
people at the very bottom.
The last data that I looked at showed there was a 2-million
job shortage between just the number of people who were
actively seeking work and the number of jobs available, and
that is exacerbated especially in these communities that have
high levels of chronic poverty.
So we need to do things. I think we need to have public and
private partnerships. We have some experience with this. Just
recently, the Federal Government, through the TANF emergency
fund, sponsored a short-term program that allowed States to
subsidize positions.
In a very short time, we created 260,000 positions through
that, and it was very popular with employers. It was very
popular--bipartisan--with States. And so, I think a program
that creates positions for folks who cannot compete in the
private sector itself, with a lot of wraparound services that
can help with self-efficacy, is what really it is going to take
to put a dent in this.
When I look at the New Hope program out of Milwaukee, it
did just that. There was a guaranteed temporary job that folks
could access, as well as a lot of services to help them be
successful.
To your question, I would say I think these types of
programs might have modest effects on earnings, but we start to
see effects in all sorts of other domains--criminal justice,
right? There is a program in New York that paid for itself with
ex-offenders coming out of the system simply by reducing
recidivism, which is, of course, very expensive.
In New Hope, actually, we saw a decade after randomized
trials--so this is a randomized trial--an 80-percent increase
in marriage rates among never-married single mothers at the
time that they enter the program.
Now, I have not seen a marriage promotion that gets an 80-
percent increase in marriage rates.
Senator Wyden. That is an eye-popping figure.
Dr. Shaefer. So I think we really need to look broadly with
these programs, not just at long-term earnings, but what does
it do to mental health? Jennifer Hernandez says it eloquently:
``When I have a job, I have a sense of purpose.'' And I think
that is what a lot of us think about our jobs. So I think we
should think of poor families as feeling exactly the same way.
Senator Wyden. My time is up, but Chairman Hatch would not
let me pass over a Utah fellow.
Mr. Pierpont. The question is the best path forward for
many of these individuals. Utah is in a great position, with a
3.6-percent unemployment rate and a 3.9-percent job growth
rate--one of the most diverse economies in this country.
So the opportunities for our families are maybe in a better
position than some of the other States. Certainly,
understanding the labor market and the demands of business and
positions that are available--we currently have in our system,
our labor exchange system, about 25,000 job openings in Utah
across the State.
So understanding the labor market, what the demand is, is
critical. Certainly, the high school GED component is an
important piece. If you have not received a high school
diploma, completing your GED is a must. Skills training has
been mentioned, making sure that we are training people in a
skill set that is going to get them employed in an occupation
that will be self-sustaining and long-term and have opportunity
for growth within an organization.
I think connecting to the workforce system--we are in a
unique position where TANF is in the workforce system. It is
under the Department of Workforce Services in Utah, and that is
an important piece of the puzzle. The workforce system is
successful, and attaching TANF recipients to that system, I
think, is an important piece for States to consider.
One program that has shown great success in Utah is called
Work Success, and it is an intensive program. It requires
recipients, as a part of the Work Success program, to be a part
of that 40 hours a week. It is about networking, it is about
understanding the labor market, social media, how to build a
resume, how to interview, how to really prepare then go out and
try to pursue opportunities for an interview, and then get your
foot in the door in a company.
So Work Success has about a 70-percent placement rate
currently in Utah.
Then, I think retention is a component. How do we keep
people in jobs, and, when they have life struggles, how do we
best support them so that they retain their jobs and not
experience a lot of transition or turnover?
Lastly, there is a difference between situational and
intergenerational poverty, and I talked about this in my
testimony. It is a different set of strategies for families
that are in intergenerational poverty. Situation folks
typically can get attached to the labor market relatively
quickly with the tools that we provide.
With intergenerational families, they are sporadically
attached to the labor market. So that is what we are trying to
learn with our Next Generation Kids project in our State, to
learn really what helps the adults, but also focusing on the
children. We have to help the children prepare themselves to be
adults and successful adults in our States. And the key thing
that is outlined in our report is that you have to make sure
that the kids are well-equipped to be successful as they grow
up and then become adults and attach themselves to the labor
market.
Senator Wyden. Thanks to you all.
The Chairman. Thank you, Senator Wyden. I have been called
to the floor, so I am going to ask you to take over. Senator
Bennet is next on the list.
Please forgive me for leaving early, but I have some very,
very important duties on the floor as well. We did not know it
would be today, so I am just stuck with it. But just let me say
that I am very appreciative of this testimony. It has been very
helpful. Each one of you has been of tremendous help to us. And
I am very proud of Utah for what we have been able to offer.
Senator Wyden [presiding]. Senator Bennet?
Senator Bennet. Thank you. Thank you, Mr. Chairman. I want
to thank Chairman Hatch very much for holding this hearing. It
is a rarity in this Congress that we focus on these issues. So
I am delighted with the witnesses who are here.
I have one suggestion, Senator Wyden, at the outset about
what we might do that is not a government program to help with
this issue, which is, we could raise the minimum wage in this
country.
To have a single mother of two kids working for $7.25 still
be below the poverty line because we have allowed the minimum
wage to collapse over the last 50 years, I think is a disgrace.
With your permission, I would like to submit to the record
a piece in today's Politico newspaper by the lead director at
Costco calling on other companies to raise the minimum wage.
Senator Wyden. I share your view, and it will be in the
record, without objection.
[The article appears in the appendix on p. 37.]
Senator Bennet. Thank you. I appreciate that.
Now to the panel, and I will start maybe with you, Dr.
Shaefer. All across the country, as Chairman Hatch said, today,
one in five children is living in poverty, which, according to
at least one report, is far higher than any other developed
country in the world except Romania. And about 40 percent of
children, it is estimated, will be poor at least 1 year before
they turn 18. That is about 29 million of today's children in
the United States.
These numbers are staggering. They are not, obviously, just
numbers. It is human lives in what we think of as the greatest
country in the world, and poverty is not something in this
country that exists only for a handful of children in some
cities in America.
The experiences of children in poverty, the challenges they
and their families face, are almost commonplace today, and that
should be unacceptable to everybody in this building, and the
politics that are so corrosive in this place should be utterly
unacceptable when we are facing that kind of challenge as a
country.
I think to start, it is helpful for all of us to understand
what it is like for a child to be living in poverty. What are
their daily experiences? What are the common obstacles they
must overcome that people in this room and on this panel would
never even imagine?
I was particularly struck by your account in your book of
Tabitha living in the Mississippi Delta, an area of the country
my wife is from, and I wonder whether you might be willing to
share her story with the panel today.
Dr. Shaefer. I can say that among the families we studied,
the very poorest of the poor actually share with poor families
more generally just the striking instability in life,
instability in jobs. So those who are able to get jobs often
see fluctuations in the number and timing of work hours that
they have which, you can imagine, makes it hard to plan for
child care.
Then, of course, the cost of housing has gotten to be such
a crisis point for many poor families. We have millions of poor
families who are spending more than half of their incomes on
housing. So we saw this incredible residential instability of
families moving quite constantly and I think being housed quite
precariously, and this leaves children vulnerable.
When we talk about the intergenerational transmission of
poverty, it has been our experience that that happens through
the experience of trauma, as I think Director Pierpont pointed
to, that when you are precariously housed or doubled up, you
are more at risk if somebody wants to take advantage of you,
and in many cases, there is no one looking out for children.
So the Mississippi Delta, as you pointed out, has been one
of the most chronically poor parts of the country for
generations, and I would say it was our experience that the
challenges faced by many of these small towns were an order of
magnitude worse than we saw anywhere else. And a big part of
that was because the institutions that were set to serve the
most vulnerable, in many cases, had often broken down.
So Tabitha Hicks, as you mentioned, grew up poor. She was
from a very large family. I think her mother had suffered abuse
over the course of her life, and so she knew the constant
experience of going hungry. Often, the lights would be sort of
out for 2 weeks out of a month and they would be hungry for a
month.
So imagine sort of living in the dark, seven kids sort of
piled up in a bed at night, no lights and going hungry. In her
own words, she said--we asked her what is it like to be hungry,
and she said, ``It makes you feel like you want to be dead.''
And so for a child to experience that, I think, is not what
should be acceptable in America.
Senator Bennet. Ms. Jackson, would you like to add
anything--I have just a minute left--about the kind of
instability Dr. Shaefer talked about or other perspectives that
you might have?
Ms. Jackson. As far as----
Senator Bennet. As far as what are the experiences that you
had living in poverty or your children had living in poverty
that people on this panel might not even think about because
they have not lived the way you have.
Ms. Jackson. Well, I came from what I think Mr. Pierpont
described as intergenerational poverty. My mom was 24 when she
had me. I am the youngest of seven. So she raised seven
children as a single parent in poverty.
She had to drop out of school but went back and got her
degree and became a chef. When she started working, she was not
home a lot. What happens is, as we go back to work as single
parents, that puts our children home alone.
So now it is totally different when you do not have those
resources available in reference to being able to have an adult
with your child while you go to work. For instance, I took a
job in Philadelphia so that I would not continue to be
unemployed. That was a year ago. But I have a child who is
still in school. He is here with me today because I do not have
family in Philadelphia.
So I wanted to be here. I brought him with me and, of
course, got him excused from school. But the point is, if I had
more of a support system and did not have to take a job in
another State--you know, most people who have been where I have
been will not take a job in a different State to get out of
that situation. I think me being in the military is the only
reason why I had the courage to transition from State to State
the way I have.
Senator Bennet. Thank you, Ms. Jackson. Thank you, Mr.
Chairman.
Senator Wyden. Senator Brown?
Senator Brown. Thank you, Mr. Chairman. I have never done
this at a committee hearing, and that is to suggest that people
read a book, by name, but I would just ask everybody in this
room, all of us, to read ``$2.00 a Day.'' I think it puts
people in a frame of mind and provides an understanding that
most of us who dress like this and have great titles and have
been relatively affluent through much of our lives--or all of
our lives--would not get otherwise.
It is in the tradition of James Agee's book in the 1930s,
``Let Us Now Praise Famous Men,'' and the 1960s Michael
Harrington book about poverty in America, and I would urge
people to do that.
I just want to say a couple of comments about the book
itself. What struck me about ``$2.00 a Day'' more than
anything--two things struck me. The first thing was how
entrepreneurial people who are desperately poor are. The woman
in Mississippi who had, I believe, the only freezer in her
neighborhood, bought Kool-Aid, Dixie cups, popsicle sticks,
sold for 50 cents if I remember, Dr. Shaefer, popsicles that
she made.
One of you, either you or Dr. Edin, sat--or both of you
sat--at the bus stop in Cleveland and watched the bus hourly
come by, disgorge six or eight passengers who went into the
plasma center to sell it for $30, and some had to take iron
pills because their plasma would not have qualified.
The woman you mentioned in, again, my hometown--I live in
the city of Cleveland. My zip code, 44105, had the highest
number of foreclosures of any zip code in America in 2007. It
is better now, but not enough better.
One woman who lived not far from where I live--I live in a
nicer neighborhood, for sure, than she did, but she had a job
at Walmart, as you mentioned. She was employee or cashier of
the week or month twice. She lost her job because she did not
have the $10 to put gas in her truck, as it was taken by
somebody else, as you mentioned.
The scrappers in Cleveland and Chicago and in many other
cities who get a shopping cart from the local Heinen's or the
local Dave's supermarket and look for aluminum cans and look
for, at abandoned houses, any aluminum or any metals they can
get--I mean, these are incredibly entrepreneurial people.
So I just bristle--as I know this whole panel does, because
all of you are public servants in your own way, from the
military to the State of Utah. I bristle when I hear people say
they do not want to work and they are lazy and they are
shiftless and all those vaguely racist sometimes, but terrible
comments regardless of how you might characterize them.
But the other part of the book that is much more optimistic
is how well the Earned Income Tax Credit works. It is not big
enough, it is not permanent yet. The chairman, I know--he was
chairman for a moment anyway; he was chairman last year,
Senator Wyden--and I know everybody on this panel wants to make
it permanent, wants to keep the expansion and do better with
the Earned Income Tax Credit and the Child Tax Credit, and what
that can mean for bringing millions, as you point out in your
book, Dr. Shaefer, and Dr. Edin, your co-author, bringing
millions out of poverty because they are doing the right thing.
I would echo Senator Bennet's comments about minimum wage.
Costco, which I would also add, is a company that--I am not
into advertising private-sector ventures today, but I guess I
will. Costco has much less turnover than other large companies
that do what they do, big box retailers. Because they pay
better wages, they have less turnover. They do all that. I am
not saying you should shop at Costco instead of Walmart, but if
there is one near your house--anyway. [Laughter.]
So my question is this. I just want you, Dr. Shaefer, to
talk a little more about work. You have done that, but I want
to kind of pull it out. I know I have taken most of my 5
minutes, but you can take as long as you want. That is kind of
the rules here. [Laughter.]
Just talk about the role of work in people's lives and why
whatever percent, 99 percent, of people really do want to work
and contribute to society.
You were living with these people. You saw homes with 20
people in them in Cleveland and Chicago and Johnson City and
the Delta. Just talk about the seriousness of work, the
necessity to work, the intrinsic need to work, and the joy of
work for so many of these people who really are entrepreneurial
fundamentally in many ways.
Dr. Shaefer. Thank you for your kind words about the book
and the endorsement. We have heard that our book is on the
depressing side. So I would apologize for that, but Senator
Brown picked out, I think, the positive things.
One is this real entrepreneurial motivation, in a way, that
you really see. To me, it is really an American story of people
taking whatever resources they had and doing what they had to
do to do right by their children. And there are, of course,
always bad actors in any sphere, but in this case I think we
really just saw that come through.
It is unfortunate that a lot of the activities that
families undertake to generate a little bit of resources for
their families actually leave them open to felonies. So Martha
Johnson, who created the sort of--she actually had a whole
candy shop in her living room, with the popsicles that she sold
for 50 cents to anyone who would come, she bought those
resources with her SNAP card. And so this, I think,
constitutes, at least by the books, a felony.
So in many cases, you would see families that would have to
do things that broke the law, whether it was using their
bodies--but you know, we saw Paul Heckewelder, also in
Cleveland, when they had 22 people packed into their 1,100-
square-foot house and the water got turned off, they jury-
rigged the garbage can under the rain spout to collect the rain
water, and that is how they flushed the toilet. So I think
there was a lot in there.
Now, you mentioned the EITC, and I would say one thing we
really came away with in this study was thinking about a litmus
test for any policy, any program. And I think it came out
clearly in all of our comments today that our programs for poor
families should seek to incorporate them into society rather
than isolate them from it.
This sounds like a simple premise, but I want to be clear
that, as Ms. Jackson pointed out, the history of welfare policy
in this country has been one of shaming, of stigma, and of
isolation, and I think this sort of drive to work is a part of
that. People want to be a part of society, and sometimes they
do not have the resources, they do not have the human capital,
the families that can help them. And in those cases, I think we
just need to have incredible programs like Director Pierpont's
that can help people get the skills and get in.
In some cases, I think we need to create more jobs that
will relieve the pressure all around. But the EITC does this
better than any other program that we have, in that you do not
have to go to the welfare office. You do not have to put up
with a case worker who is looking down at you. You go file your
taxes. It is one of the most American things we do, except they
look forward to tax time and, of course, I do not usually. But
no offense to all of you. [Laughter.]
But I think this is something we can build on, and I think
it is why looking for work and looking for ways to more
comprehensively--outside of a few good examples--connect people
to jobs and increase the economic opportunity, that is what
families want.
When we asked them if, in a year, you are doing better,
what would it look like, none of them said, ``Oh, I would be on
a cash safety net program.'' Now, I happen to think we need a
functioning cash safety net--and TANF, in my opinion, is wholly
failing in its stated purpose--but what they would point to is
work. So if we are going to start from where people are, I
think that is where policy should go.
Senator Brown. Thank you.
One brief comment, Mr. Chairman. I appreciate your saying
all of that. Senator Bennet always mentions CTC with EITC. I
sometimes forget that. And I think it is important to always
link them as we talk about permanence, as we talk about
expansion, as we talk about mistakes made in filing. And we had
a moment earlier this week in the last hearing we did where--I
will not mention a name, but I have talked about this at many
hearings--well, it was the IRS hearing--that the mistakes in
the Earned Income Tax Credit are not fraud, they are just badly
filling out, with some errors, the applications. The IRS needs
some authority from us to be able to correct those.
A number of people, my colleagues, have called that fraud
in the past. One Senator whom I had heard say fraud is now
talking with us about fixing it in a way that really is the way
to do it, and I am encouraged by that, that this can be
bipartisan. EITC and CTC, thank you, from the Reagan years on,
have provided a real opportunity to lift a lot of people out of
poverty with showing the kind of respect that we can.
So thank you so much.
Senator Wyden. Thank you, Senator Brown.
Just before we recognize our colleagues, I also want to
note that Senator Brown's point with respect to bipartisanship
was also highlighted in this last exchange.
Dr. Shaefer, many of us who are progressive really think so
highly of your book, and we are quoting it, we are using it,
talking about it frequently. But I think it was noteworthy that
Dr. Shaefer singled out Mr. Pierpont and a State that has
always been conservative in politics for programs that work.
So there is a real chance here, colleagues, to find some
common ground, as Senator Brown was talking about, on the
Earned Income Tax Credit, and I thought that last exchange with
Dr. Shaefer praising the folks in Utah for stepping up really
highlights the possibilities here.
Senator Menendez?
Senator Menendez. Thank you, Mr. Chairman. Thank you all
for your testimony. I have been in and out because we had a
Foreign Relations nomination.
I think this is an incredibly important hearing today. I do
not think we spend enough time on these questions. I also
think, while the goals of welfare reform 20 years ago to
encourage people to work and move people from welfare to self-
sustaining economic freedom were certainly desirable and
laudable, it seems to me that the end result is a program that
has utterly failed to respond to the needs of people receiving
the very help it purports to accomplish.
In the past 20 years, the number of people receiving cash
assistance is down to 26 out of 100 needy families, from 68 out
of 100 in 1996. And because the TANF program is not indexed for
inflation and has received flat funding since 1990, resulting
in a net loss to States of $300 million a year, and because the
program is not tied to overarching economic conditions, it
cannot respond as needed.
So if you look at the graph from where we started on
welfare reform and go down, even in recessionary periods, you
do not see a response that would be reasonable to expect.
In fact, in my State of New Jersey, there has been a 25-
percent decrease in the number of families helped by TANF since
2010 and an unbelievable 80-percent reduction since its
inception in 1996. And, even during the Great Recession, we did
not see any uptick.
So this sharp decline in both the quality and the quantity
of assistance we provide to those in need should not come as a
major surprise. But instead, I am concerned that we may see it
as the coming attraction for further plans, including by some
of my colleagues on the other side of the aisle, who seek the
blockbuster goal of block-granting the Medicaid program, and
that, to me, is a recipe for disaster.
We have already seen how damaging block grants to States
can be for providing basic assistance to those most in need,
and I think it is absolutely imperative we do not allow the
same thing to happen to necessary medical care.
Now, you can have innovation and greater efforts with
proven programs that can move people to self-sufficiency
without necessarily block-granting, at the end of the day. This
committee has jurisdiction over a wide swath of programs aimed
at people in need, and they have been referenced here: in
addition to TANF, the CTC and the EITC. To me, that encourages
and rewards people to work rather than punishing them for being
unable to find work, even when Americans who have been
gainfully employed cannot find work.
So, even in those periods where Americans who have been
gainfully employed cannot find work and maybe were never on any
assistance program, even in those periods of time, we still
have an attitude of punishment. So I think we need to focus on
how we reward work.
I want to piggyback, Dr. Shaefer, on the comments made by
my colleague, Senator Brown. In your testimony and in your
book, you discuss the unifying trait of all families that you
studied and the overwhelming desire to work and to provide for
their children. That is totally counter to the myth of the so-
called welfare queen that helped push reform in the 1990s.
So, can you talk a little bit more about the desire, what
you found, families' desire to work and if you think that that
desire would lessen if we make structural reforms to TANF to
increase assistance and provide more to struggling families
when there is a transitional period, and how do we best meet
that desire, the desire to work and to provide for your family?
Dr. Shaefer. So, coming out of the School of Social Work,
as well as the School of Public Policy, I was actually struck
by a number of our folks who talked about work. Not
specifically using these words, but what we found was they were
really talking about work as a mental health intervention, that
when they had the resources--they were helped with the
resources to get work--they found structure in their life, the
ability to give meaning. And I do think it goes back to this
desire to contribute to society, and the feelings of being
worthless are often a result of feeling like you have nothing
to contribute, right? And work is a defining way that someone
in this country makes a contribution. It is a way that we all
define ourselves. So if you feel cut off from that, then you
really are isolated.
Now, you asked the question, if we made some reforms to
TANF, would it change that, and, in my opinion, the biggest
problems with TANF have to do with its tremendous complexity
that allows for lots of loopholes from the work requirement.
There are many, many States that have very, very small work
requirements, because they are able to take advantage of
loopholes in the law or technical details. Also, the block
grant structure, the way it is designed, puts perverse
incentives actually not to invest in programs that help.
If the goal of TANF was actually to sort of provide a
temporary cushion and do away with long-term dependency and let
the States innovate on what kind of work programs they might
have, I think we have failed in that regard.
At the worst, the TANF program, what it does is, it
actually allows States to reallocate, substitute, or supplant
State funding with Federal funding, so that there is no benefit
at all to Federal taxpayers. It is simply taking money, keeping
cash assistance caseloads low--putting people to work is
expensive, let us be honest about that--but keeping those
expenses low and moving money into, say, the foster care
system.
In some cases, many States are paying for college
scholarships for childless people, and the parameters under
which you can use your TANF block grant are so broad as to
allow a lot of this and to, frankly, fill State budget gaps.
You might imagine, as you mention--as the overall level of
resources shrinks with inflation and States continue to be
strapped, what are the chances they are going to reallocate
money back to a program like cash assistance?
So I think we could make fundamental changes to the TANF
block grant that would both improve its ability to be a safety
net, as well as improve its ability to help put people to work,
to sort of incentivize putting resources toward that.
I think the most comprehensive treatment of this actually
was a white paper, ``TANF is Broken,'' which many of you may
have seen, by Peter Germanis, who was a former White House
staffer, and it goes sort of detail by detail, all of the
technical details that, as he says, we got wrong. It is all in
there.
Senator Menendez. Thank you.
Senator Wyden. Thank you, Senator Menendez.
Senator Casey?
Senator Casey. I want to thank the ranking member. I also
want to thank the chairman for calling this hearing. And it is
nice to have a little extra time too. I will take a little bit
of extra time, but not too much. But it is helpful because this
is a subject about which we do not debate enough, do not spend
enough time on.
I want to start with the New Testament. There is a line in
the New Testament where Jesus is quoted as saying, ``The poor
you shall always have with you.'' I guess, over time, that has
been a much-debated line, what that means.
Some, I guess, could interpret it, in the context of our
political debates, as there will always be a high number of
poor people, and that is just the way life is. I think most of
us here would interpret it another way, and I think the
appropriate way, which is, you are going to have poor people in
society and you have to do something about that. You have to
work and act to reduce that number.
It is especially urgent when it comes to children, and, if
you want to talk about a subject that we do not spend enough
time on, it is this: children in poverty, what can we do about
it, what are we not doing?
I would assert that both houses and folks in the House and
the Senate in both parties are not doing enough. None of us is
doing enough on this and certainly not doing as much as the
people in front of us.
So I want to thank the panel for your testimony and for
your kind of living witness about what this means and what we
must do about it.
Secondly, I want to mention some numbers. We have all kinds
of numbers flying around. The most recent number I have seen
for 2014--we have a lot of 2013 numbers--the 2014 number is
about a 21-percent poverty rate for children.
The Annie E. Casey Foundation--no relation to me--a great
foundation that tracks these numbers, has put out a one-pager
for a number of years now, and this is my marked-up version of
it. It is 16 categories for children broken down into four
segments, Mr. Pierpont, just like yours in Utah: economic well-
being, education, health, and family and community as it
relates to children.
The green in this chart means that the numbers have gotten
better since 2007 to 2008, and that is good, and we should
highlight when numbers are getting better.
Unfortunately, the numbers that are getting worse are the
subject of this hearing. Child poverty, worse since 2008;
children whose parents lack secure employment, worse since
2008; children not attending preschool, that number got worse,
not by a lot
percentage-wise, but it is a big number, according to them:
children not attending preschool, 4.4 million children--more
than 4.4 million across the country.
So I can go through all the numbers: children living in
high poverty areas, higher; children in single-parent families,
higher. So the numbers are way up.
What do we do about it? Well, one thing we can do--and I
want to ask the panel to give your point of view on what is the
top recommendation you would make for us to reduce these
numbers, that is my question.
Before I do that, though, I want to highlight a bill I am
introducing today--the House has a similar version introduced
recently--the Child Poverty Reduction Act, basically doing what
the UK did, which is to set a target and figure out a way to
reach the target.
The UK set a child poverty target, and resulting policy
changes cut their child poverty rate by 50 percent in a decade.
What our bill would do would be to set a target of reducing the
number of children living in poverty by half in 10 years. That
would be a national goal pursuant to the bill: develop a plan,
develop recommendations as to what is working now and what is
not working right now.
So that is one thing we can do: at least set a target and
work toward that. But I will go right to left and go down the
list. If you had an opportunity to say one thing the Congress
of the United States should do, what would it be?
Mr. Pierpont. I do not believe that there is one solution.
I believe there are several. Part of what we have done in Utah
is dig deep into the data to really understand what families
are faced with, what their challenges are, certainly with a
keen interest on how the children are doing.
There are a couple of things that I can highlight as a part
of our report that stand out, and you mentioned one: access to
high-
quality preschool and after-school programs, preparing kids for
kindergarten, extended-day kindergarten, ensuring that they are
prepared to succeed in the school system. So that is one
example.
Another would be access to health care, making sure that
children have access to dental care and health care screenings.
Our data shows that they are not going to the doctor every
year, so how do you best support kids in the health area?
So there are several others that are in there, but
certainly I believe this committee, as you look at TANF and
other programs, needs an understanding of how the children are
performing, how they are doing, including a conversation about
what needs to be done differently with the programs to include
the children in the dialogue.
Senator Casey. Thank you. Dr. Shaefer?
Dr. Shaefer. Well, I have to go with what we heard from the
families in our book, which is that I would make a concerted
effort to increase economic opportunity at the very bottom. I
would see if we could make the next generation a jobs
generation.
I think these types of initiatives should probably be
place-based. I think they can be done through public and
private partnerships, and maybe they would be done with the
notion of improving infrastructure, of which we have many
problems, and I think these types of programs would probably
need lots of wraparound services to help place families into
jobs and keep them in those jobs as they experience crisis
points.
Senator Casey. Let me just note, for the record, I was
struck by that searing statistic from your testimony on page 1:
as of 2011, 1.5 million households, with 3 million children,
reported cash incomes of no more than $2 per day, up 130
percent from 15 years ago.
So your data, your research, shows that since TANF was
passed, as Senator Menendez outlined, you have 3 million more
kids living in $2-a-day homes.
Dr. Shaefer. That is right: up 130 percent, and this is
consistent across a series of indicators from household survey
data. From our administrative tallies, we see a similar
increase in the number of homeless school children, as reported
by our schools.
So I think when you see all of these indictors moving in
the same direction, you can say pretty clearly that
circumstances are getting worse at the very bottom. Well, in
fact, in some ways, the government does far more for families
around the poverty line, just above the poverty line, than it
has ever done before, and I think we can be proud about that.
Senator Casey. Ms. Jackson, thank you for your service.
What would you hope we would do?
Ms. Jackson. I would hope that Congress would put more
resources into organizations like the one that Mr. Pierpont has
going in Utah, and America Works, organizations like that.
Me, myself, I started a nonprofit in 2005 for single
parents, and it did not go anywhere because I did not have the
education or the experience to actually get it going. But what
Mr. Pierpont spoke about, those were all of the things that I
had outlined in this nonprofit to be able to assist families.
My biggest thing when I did my research was single
parents--the poverty impacts everybody. Poverty does not just
stay below the poverty line. It impacts the entire country, and
what Congress has to do is understand that--not understand,
because I know you all understand----
Senator Casey. Sometimes we do. [Laughter.]
Ms. Jackson [continuing]. It is just understand that the
people who are in poverty are--some are generational and some
are situational, as has been said. What I see is, we do have a
lot of programs that focus on the children. However, the single
parents are the ones who really have to be dealt with. They are
the ones who have to be realigned.
Of course, you have to make sure that when you teach them
or you train them or you redirect them, that you look out for
the welfare of the children. But I really believe that putting
more emphasis on the person as opposed to just shoving out
money is more important, if that makes any sense to you.
Senator Casey. Dr. Loprest, we are down to maybe 20
seconds; that is my fault, but just be observant.
Dr. Loprest. No, because I agree with what everyone said. I
think that the most important thing is to create work
opportunity. When you think about child poverty--and we know
the persistence of child poverty, how devastating it is--
helping those children's parents to be able to work and take
care of the children is the number-one way, I think, to help
them out of poverty.
We need all of the other programs, but helping them to be
able to provide for their families and investing in that
opportunity is what is important.
Senator Casey. Thank you very much.
Senator Wyden. Thank you, Senator Casey.
Senator Stabenow?
Senator Stabenow. Thank you very much, Mr. Ranking Member,
and thanks to the chairman for having this hearing, which is
incredibly important.
I want to thank all of our witnesses, particularly Dr.
Shaefer, whom we are very proud to have as a professor at the
Gerald Ford School of Public Policy at the University of
Michigan in Ann Arbor.
As has been said a lot by our colleagues, your book is very
important. It is jaw-dropping and eye-popping, and it examines
what we are really confronting today in a very real way by
talking to the people themselves. So thank you for that, and
thank you, to all of you, for your testimony.
When we look at this, in America right now we are facing a
huge crisis, a poverty crisis, and we cannot just say this is
because people do not want to work. As you have said, Dr.
Shaefer, people view themselves as workers, and in fact, in
many, many, many cases, they are working one, two, three, four
part-time jobs. They are trying to piece it together.
In fact, what I find an astounding statistic is that, if we
actually enforced equal pay for equal work for women, half the
women in poverty today would be lifted out of poverty.
So there are policy things that we can do. Along with a
livable wage and making sure that when folks are hit because of
the global economy or tax policies that are rewarding plants
going overseas or lack of investment in job training, there are
things that we can do to support what all of you are doing, and
that is why I think this hearing is very important.
I do want to just reiterate, as we are going to be bringing
this hearing to a close today, what we are talking about in
terms of the crisis in this country. Nearly 47 million
Americans are living in poverty, about 20 million in deep
poverty. Nobody wants to be in that situation. And nearly 106
million Americans are on the brink of falling into poverty.
So they are holding on. They were in the middle class. They
have fallen down. They are trying to hold on so they do not
find themselves losing every rung on the ladder. And what
colleagues have said, so importantly, is that one out of five
are children, the future for us. And what does that mean for
them?
Ten or 15 percent are seniors, and, frankly, if we did not
have Medicare and we did not have Medicaid and we did not have
Social Security, which have been safety nets that have lifted a
generation out of poverty, there would be a whole lot more
senior citizens in poverty today. So these things have actually
worked.
I could go on and on, but I would just say that one out of
seven are women, and there are unique challenges for women with
children.
Mr. Ranking Member, this is very, very important, and we
are talking about moms and dads and grandpas and grandmas and
folks who just want a chance to make it in the greatest country
in the world. They are looking for opportunity.
So my question really goes to what we are doing about
this--and we have talked a lot about TANF. The reality is--and
a New York Times article this week laid out a number of issues
with the program, and you have spoken about some of those: flat
funding for 20 years, first of all, for TANF. So we are all
talking about how certainly electricity costs have gone up,
food, gas, rent, school clothes, everything has gone up. But
support for low-income individuals to be able to move out of
poverty has been flat for 20 years, 2 decades.
Secondly, this is a block grant with minimal oversight, and
I am very concerned about that, because I think when you put
those two things together, a block grant with very little
accountability, flat funding, we have seen devastating
realities as a result of that, particularly for children.
Now, only nine in every 100 poor families--nine out of 100
poor families--actually benefit from this program that was put
into place. And in the 1990s, it was 55 percent.
So my question goes to what we can do from a block grant
status, because my concern is, we have seen Republican budgets
pass in the House and in the Senate that would block-grant more
things; let us block-grant Medicaid, let us block-grant food
programs without accountability. I have deep concern, because I
do not see where this approach has actually worked.
So my question for each of you would be, what can we do to
provide more oversight so, in fact, the block grant approach
works, or can we do it differently, or do you think that it has
worked? I guess all the numbers that I see show that it is not
working.
But if we are going to do more, particularly so that those
who are eligible can receive cash income that they so
desperately need, what can we do to change a program that
clearly has not kept up with the times in terms of the
challenges that families are experiencing?
Mr. Pierpont, I will start with you.
Mr. Pierpont. I believe that giving States the flexibility
they need to innovate and to serve their communities and their
citizens is the right approach. I am not familiar with what
other States may or may not be doing in regard to their block
grant. I believe ours is successful.
I think that some opportunities lie with aligning Federal
agencies to more accurately identify outcomes they share in
common. I mean, I administer food stamps, the SNAP program, the
child care program, the TANF program, the Wagner-Peyser funding
with Workforce Programs, and alignment of outcomes is an
important piece for us.
It becomes difficult to provide an effective service
delivery mechanism when you are trying to meet the needs of all
of the different programs. So I believe trying to eliminate the
silos as much as we can, that is part of what we are doing with
understanding our data that we have been working on over the
last 4 years. Once you understand the challenges of the
families in regard to TANF, food stamps, Medicaid, the programs
that they are on, you can shape the programs to best address
those needs.
What we are trying to do now is to look at our programs,
look at our policies and how do we align, not only within
Workforce Services, but Department of Human Services and the
other agencies that are a part of our commission, to then be
more effective in the way we deliver the programs to the
families.
Senator Stabenow. I would just ask one thing, though,
because clearly you are focused on that, and I very much
appreciate all the work that you are doing.
But if a State is not doing that, there is no
accountability for that right now. Should there be some
benchmark, some different accountability, if every State is not
taking the kind of thoughtful approach that you are?
Mr. Pierpont. I would encourage that they move in that
direction. How about that for an answer? I do think it has shed
light on our programs in a way that we may have not understood
it in the past, and it takes a lot of effort and it takes
leadership and it takes the will to really understand what
works and what does not and then have the ability and desire to
change to make it more effective for the families.
So I do think there should be accountability, but I think
you first have to understand the data and the situation that
you are faced with in your State.
Senator Stabenow. Thank you.
Dr. Shaefer?
Dr. Shaefer. I am afraid I tend to agree with Peter
Germanis and the white paper ``TANF is Broken'' and his
assessment that the block-grant structure--I do not see a
conceivable way where the block-grant structure is a good way
to do social welfare policy.
In the case of TANF, I think if we were going to start
somewhere, it would be in trying to close some of these
loopholes that allow States to simply fill their budget gaps
while providing no actual increased support to poor families.
I do not think it was policymakers' intent for that to be a
primary function of the TANF program, that only 26 percent of
funding for TANF would go to basic assistance, that only a very
tiny amount would actually go to supporting work programs. I
think if we want it to work more in the ways that it was
intended, we need to figure out ways to simplify so that there
are not numerous loopholes.
I will give you just one more example, which is that many
States actually use third-party maintenance of effort funds.
They count as part of their contribution to TANF what
nonprofits are doing in their communities, but they are not
actually spending any money whatsoever on their own programs.
In fact, it goes beyond that. It is not just the
expenditures of these programs. In some cases, they are
actually counting volunteer hours as maintenance of effort, and
I just do not think this was ever what was intended for the
program.
So I am not of a mindset that there is a good way to do
this as a block grant. I think once you close one loophole--we
know the great American spirit--I think people will innovate
and find other loopholes to work through.
So in some ways, simplicity is better. And I am not--I want
to be clear I am not advocating for a return to AFDC. I do not
think that was a successful program either. But I think we
should have a cash assistance program that does at least what
we think it should do, what it is supposed to do, and right now
we do not.
Senator Stabenow. Thank you.
Ms. Jackson, thank you again for your service.
Ms. Jackson. You are welcome. The way that I can answer
that is, I know in the military when things do not work, the IG
comes out, they inspect, they tell you what is wrong, you fix
it. If you do not fix it, you get in trouble. So it is kind of
like that is what you have to do.
Senator Wyden. Way too logical.
Senator Stabenow. Very logical, very logical. [Laughter.]
Thank you very much.
Dr. Loprest. I agree with Dr. Shaefer that the block grant
structure is difficult to make workable, but I do think also
that Congress has not abdicated all its ability to provide some
incentives and encouragement and structures around what you can
do with a block grant.
I do think, even within the block-grant structure, you can
make changes that will encourage more spending on cash
assistance, encourage more spending on work. And some of the
performance indicators and making things more efficient, as Mr.
Pierpont has said, not making States have to run around and
spend a lot of administrative dollars, I think are important
too.
Senator Wyden. Let us do this. Senator Cardin has not had a
chance. I know Senator Bennet wanted to ask an additional
question.
Senator Cardin?
Senator Cardin. Mr. Chairman, I have been enjoying this
discussion. I will be glad to yield first to Senator Bennet,
and then I will take my time.
Senator Wyden. Great.
Senator Cardin. I know he has had his first round and I
have not had my first, but I am more than happy to yield to
him.
Senator Bennet. That is enormously kind, an unusually kind
gesture around this place. I deeply appreciate it.
I wanted to come back, Mr. Pierpont, to the point you were
making a minute ago. When I was Superintendent of the Denver
Public Schools, I felt like so much of what we did was comply
with what the Federal Government told us was important
accounting and that, by the time these silo programs got to our
kids, they were so separated from each other and so distinct
from each other that you could not actually serve the whole
kid.
If it were up to me--it is not, unfortunately, up to me--we
would have a standing committee of the Senate that was focused
on our kids and on their future, and the first question we
would be asking ourselves is, how do we align all the well-
intentioned programs that we have so that when they actually
get to the local level, you have the ability to be able to
serve kids and serve families?
So I wonder if you would--two points here. One, and to Dr.
Shaefer, also, we need a feedback loop coming from the field to
the Congress that is not just these hearings, but that is
informing us how you are actually using the money well at the
local level and where it is being wasted. We do not have that
on so many issues, but certainly on these issues.
Second, if you could talk a little bit about your work in
and around schools and early childhood and after school, which
you mentioned earlier, I would be interested to hear that.
I have a maximum of 3 minutes and 19 seconds left, because
Senator Cardin needs to ask his question.
Mr. Pierpont. I will be brief then.
Senator Bennet. Thank you.
Mr. Pierpont. Breaking down the silos has been something
that has taken a bit of time. Certainly, having the State
School Superintendent sit on the commission is an important
aspect of the discussion of how to best serve the children, as
well as the entire family, and for him to understand the data
that is coming out as we continue to research will compel him
and Superintendents across the State to understand the data,
understand what the challenges are with the family. They are
working with the kids anyway.
Senator Bennet. Right. That is where the kids are
generally.
Mr. Pierpont. Yes. That is where the kids are. So we need
to make sure that the programs that are maybe outside of the
schools are effective in the way that they are trying to serve
them within the schools.
That is why we very thoughtfully went into the schools to
be a part of the project and Next Generation Kids, really to
start understanding the dynamics between principals and our
services and so that we can continue to learn how to best serve
the families.
The second part of the question, remind me again.
Senator Bennet. I think it was about feedback to this
place.
Mr. Pierpont. The feedback--whatever mechanism you believe
would be most beneficial. We produce our report annually. It
comes out every October 1st. We have a 5- and 10-year plan that
outlines what we think we need to do to address the findings in
the data. It focuses on kids.
We have policy recommendations that go to our legislature.
They are very familiar with the work. They are the ones who
will consider legislative changes that may help support the
understanding of the data that we have been able to produce.
So we are happy to come and testify. We are happy to
provide the reports annually but continue the dialogue on what
I believe is an important transformation that could occur at
least with the intergenerational poverty families.
Senator Bennet. Thank you, Mr. Chairman. I will forbear.
Thank you to the panel, by the way, for your very, very
interesting testimony.
Senator Wyden. I think Senator Bennet, who has been for
this kind of advocacy for a long, long time, makes the point
also that Congress has a big oversight responsibility, and we
have to more frequently hear from people in the field, and I am
going to talk to Chairman Hatch about that.
Senator Cardin?
Senator Cardin. Senator Wyden, it is a point I was going to
make about Senator Bennet also. You and I were in the House of
Representatives when we changed from AFDC to TANF, and one of
the areas that we really tried to harp on was to deal with the
basic structures of people being able not only to get a job,
not only to be able to keep a job, but to move up the economic
ladder. And Senator Bennet has been a real champion of
recognizing that we have to have the educational component in
that to make it sensitive.
I understand that work experience is important, but you
also have to have the skills in order to be able to keep a job
and to be able to advance. That is how you get out of poverty.
And I thank Senator Bennet for his leadership.
That is why I wanted to listen to your questioning first
before asking my questions.
There is no question that we needed to reform AFDC. There
is no question about that. We needed to be able to put an
emphasis on work and to give the flexibilities to the States to
innovate. That was the whole reason for it.
What I have seen, though, is that there has been more
micromanaging at the national level, more so than
accountability at the national level.
I was listening to my colleague, Senator Wyden, ask these
questions, which are very valid questions. How do we achieve
our objectives? By the major test of poverty, TANF has not
succeeded. You look at the numbers on the poverty rates, and
you see that one of the major tools, TANF, has not been
successful in that regard.
Therefore, I think it is important for us to look at
accountability. But do not confuse that with taking away
flexibility. The problem is that many States have diverted
funds for reasons other than dealing with getting people jobs
that they can grow to get out of poverty.
So this hearing is very important, and I think it is
interesting to see the people who were here at the end and
their commitment to saying, look, we have to do this better. Of
course, the truth of the matter is, Congress has really reduced
this effective tool in real dollars. We have not kept up on the
amount of dollars that are necessary.
So, Mr. Pierpont, I appreciate very much the innovation
that you have brought to that.
Dr. Shaefer, I want you to know that Senator Brown has not
only distributed your book, he has given us a test to make sure
we actually read it. [Laughter.]
But we appreciate the commitments you made.
Dr. Loprest, I very much appreciate the work that you have
done in this area.
But I am going to ask Ms. Jackson a question, for two
reasons. First and foremost, she hails from Prince George's
County, Maryland, which has my attention. Secondly, she has
experienced firsthand the challenges of the system.
I know that you are a strong proponent of America Works. I
know you have benefitted from the program at America Works. But
I would really just like to get your firsthand experiences as
to the challenges that are in the system that we should try to
do something about.
Where does it make it difficult for you to take care of
your needs with temporary assistance so that you can, in fact,
be productive? Where can you see people who have been
inhibited, where we think we can make some common-sense changes
to the system so that more people can benefit and get the type
of employment that they need for their families?
Ms. Jackson. I think the program would benefit from--let me
make sure I understand your question.
Senator Cardin. Sure.
Ms. Jackson. From my perspective in going through the
program, I was very young. I started well before I started
working, living in the community. Everything has changed so
much over the years.
Senator Cardin. Where did America Works help you? Why was
that such a valuable program to you?
Ms. Jackson. That was very valuable mainly because--I have
probably said it like three times already--but because it
focused on me as a person. Yes, it was about getting the job,
but it mainly focused on making sure that when I--I mean, I was
able to call Jennifer Tiller when I did not feel like coming
in. I am going to get my benefits anyway. When you say 30
hours, okay, I already have my 30 hours, I am not going in
there, I do not feel like it.
I wanted to work, but I was going through a depression and
going through PTSD and all these other things, but the PTSD
came later, after war. I was still going through all of those
depressions and those anxieties way before I went to war from
the stressors of everyday life, of just trying to have a place
to live, of just trying to keep a place to live in a decent
safe area.
So America Works ended up helping me by helping me to
pretty much focus on my strengths.
Senator Cardin. What I take away from that is that
flexibility is important, allowing the States to come up with
innovative ways to deal with the individual, because everybody
is different.
Ms. Jackson. Right.
Senator Cardin. Everybody is different. By the way, people
want to work. I do not know anyone who would not prefer to have
a job than the alternatives. So everybody wants to work.
People develop at different stages and have different
challenges and have different needs, and they need help in
reaching that ladder that allows them to grow and be able to
take care of their family.
So giving flexibility I thought was always a good idea. I
do not challenge that. But I thought Senator Stabenow's point
about accountability is right. There has to be some
accountability in the system, so that if you do not take on the
challenges, if we give you the flexibility and give you the
tools--which, by the way, I do not think we are today--but if
we give you the necessary flexibility and the tools, then we
should hold you accountable so that you cannot dodge the issues
of poverty in your State, you cannot dodge the issues of people
having multiple issues.
Having challenges--everybody has challenges. You have to be
able to figure out how to deal with those challenges, and for
people who are vulnerable, those challenges can be
debilitating, and you need to figure out how you deal with that
to get people in a productive work environment.
Anyway, Mr. Chairman, I thought this hearing was extremely
helpful, and I thank you, Senator Wyden, for your patience in
giving us the opportunity to ask our questions.
Senator Wyden. Thank you, Senator Cardin. And Senator
Cardin has extensive experience on this not just here, but in
the other body as well, because he was on the committee of
jurisdiction there.
Just because I did not give an opening statement 2 hours
ago is no reason to torture you now, and I will not give one.
Here is my thought about this. One of the great chairs of
this committee was Daniel Patrick Moynihan. Senator Schumer is
an enormous fan of Senator Moynihan. And Senator Moynihan, who
chaired the committee, talked about the ``complexification of
government'' and frequently said that in connection with a
whole host of government programs, and that certainly seems to
embody much of what we have heard today.
I leave encouraged on a number of fronts. The bouquet-
tossing that has taken place between Dr. Shaefer and Mr.
Pierpont, for example, is just one example. Our fine witnesses,
who come from the field and who can tell us what it is really
like, have been enormously helpful.
I am struck by the notion that, well, there was AFDC in
yesteryear and now there is TANF, and people will kind of chew
on which program did what and what the limitations of both
programs were. It seems to me where you all were taking us was
sort of toward a third path, not AFDC, not TANF as it stands
today, but this third path.
What I got out of it--and, again, we are not going to keep
you here until breakfast time--was the notion that you all were
interested in more understandable standards--I think Dr.
Shaefer and several of you mentioned that--and some
flexibility. And when you were talking about flexibility, I got
the sense that flexibility meant the capacity to respond to two
types of economic changes: big picture economic changes that
take place in our country and individual needs.
Because of the lateness of the hour, I am not going to,
again, make this a star chamber hearing and put you through
lots more, but ponder that, if you will.
As Chairman Hatch and I both have noted, this is a very
hectic day, and I am going to have to go back to the floor as
well.
I want to thank all of our witnesses for their outstanding
presentations, and thanks to all the Senators as well. We got a
lot out of this hearing.
I will also note that any questions for the record,
particularly for staff, need to be submitted by no later than
Thursday, November 5th.
But thank you all. Thank you all for your service. With
that, the Finance Committee is adjourned.
[Whereupon, at 12:10 p.m., the hearing was concluded.]
A P P E N D I X
Additional Material Submitted for the Record
----------
Submitted by Hon. Michael F. Bennet
From Politico
Message to My Fellow Execs: Raise Wages!
If we do we'll all be richer in the end.
By Tony James | October 29, 2015
In early 2014, President Barack Obama paid a visit to a local Costco.
He wasn't there to get a good deal on tires or a big-screen TV but to
use Costco as a platform to advocate a higher minimum wage. That's
because the retail giant (where I am lead director) has proved that
businesses can perform better by paying more. Costco pays some of the
highest wages in retail--almost twice the minimum wage.
And guess what, it's doing great. At a time when debate over raising
the minimum wage is front and center, I have a message for my
colleagues in business: We are missing the boat. Knee-jerk opposition
is wrong, because as I have seen at Costco and other companies, raising
wages will be good for business.
There are three key reasons. First, it will accelerate growth of the
economy. Second, it will increase labor productivity. And third, it
will reduce government support payments and the pressure to raise taxes
on business.
For the past 50 years, the U.S. has allowed its minimum wage to
plummet, to the point where in real terms our minimum wage today is
back where it was in the late 1930s. We have squeezed consumer demand
and sapped economic growth.
Many businesses and their advocates argue that higher labor costs from
an increased minimum wage would hurt jobs. But in fact, higher wages on
a national scale will accelerate growth by triggering higher demand for
the very sectors that pay low wages, more than offsetting the higher
costs. This is why many studies show higher wages do not cost jobs.
When you raise the minimum wage, you give more money to the people with
the highest propensity to spend. If you give consumers a $1 tax rebate
or other one-time break, they spend only about 50 cents. If you
increase their incomes by a dollar, however, they actually spend more
than that dollar, because they also use more credit. This direct
spending increase from higher wages then has an additional 1.5-times
multiplier effect that ripples through the entire economy.
If the federal minimum wage were raised to $12 per hour, that would
raise wages either directly or indirectly for over 20 percent of
American workers. It would raise incomes by over $80 billion and add
$200 billion of economic activity as the multiplier effect cascades
throughout the economy. And that's just the beginning, because a higher
minimum wage would actually trickle up, causing other incomes to rise,
too. All told, this would drive a 1 to 2 percent near-term jump in
gross domestic product.
If a rise in wages is instituted nationally, a level playing field is
maintained that avoids artificially legislating winners and losers.
Businesses will adjust to constraints uniformly applied, and each
business will still try to find a way to win from innovation, improved
productivity or price increases. Rather than continually driving down
real wages and demand, we will benefit our entire economy.
It is also important to note that jobs that pay minimum wage are
heavily concentrated in non-tradable services with restaurants and
retailers. These jobs are hard to replace by imports or automation--and
the low-wage workers in these places tend to spend locally--so their
added income would recycle into the local economy, benefiting the very
businesses affected by higher wages.
The second reason business should embrace a higher minimum wage is
productivity. Higher wages make businesses stronger because they can
find savings and more effective workforces through lower turnover,
reduced training costs and more responsive and committed employees.
This is precisely what we have seen at Costco--and what many of my
colleagues at other well-paying companies have discovered as well. I
think we can all agree that no one can actually live on $7.25 an hour,
so it makes perfect sense that people who earn that will spend most of
their energies trying to find something else to do.
And finally, businesses will benefit from a higher minimum wage because
it reduces required government support payments and encourages people
to work, ultimately reducing pressure to raise taxes.
Think about an unemployed or underemployed worker today. It's likely
that this person is receiving substantial government support. If that
person gets a job, they forfeit much of this government assistance--and
with the current $7.25 minimum wage, there's little incentive to do
that. In many cases, they would be working simply to offset the loss of
government assistance.
A higher minimum wage would empower people to support themselves and
significantly reduce government welfare spending. And unlike many other
social programs, it rewards people for working.
It's time for all business leaders to see what's become increasingly
clear. Our economy has been stalled for more than a decade. We must
ignite growth. Zero real interest rates and trillions of dollars of
corporate cash shows that we have enough savings. We need more demand!
At a time of rising income inequality, let's not just hope for
prosperity to trickle down. Let's put resources where they are needed
most and lift the entire economy with them.
______
Prepared Statement of Hon. Orrin G. Hatch,
a U.S. Senator From Utah
WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah)
today delivered the following statement during a committee hearing to
explore solutions and promote self-sufficiency for families living in
poverty:
The great American poet, Walt Whitman, wrote: ``What a devil art
thou, Poverty! How many desires--how many aspirations after goodness
and truth--how many noble thoughts, loving wishes toward our fellows,
beautiful imaginings thou hast crushed under thy heel, without remorse
or pause!''
I think everyone here shares Mr. Whitman's sentiments about the
crushing and remorseless nature of poverty. And, while we may have
disagreements on how best to address this issue, all of us have an
interest in finding ways to more effectively and efficiently alleviate
poverty in America.
Today's hearing will attempt to provide some clarity around issues
of poverty, the effect it has on children and families in the United
States, and the role that Federal programs, particularly the Temporary
Assistance for Needy Families program, currently play in mitigating
poverty.
Poverty is a critical challenge for our Nation, and, far too often,
children end up being the primary victims. Recent official poverty
statistics reveal that one out of every five children in the U.S. lives
in poverty. Some argue that the problem is even more widespread. But,
regardless of the frequency, we know that poverty greatly increases the
risks for a number of negative outcomes among children.
In some communities, the cycle of deep poverty persists generation
after generation. Often these families live below the radar, unseen by
many. Day to day life for families in deep poverty is fraught with
difficulty and constant stress. To make a bad situation worse, this
unending toxic stress often leads to a number of mental and physical
health issues.
Unfortunately there is no easy solution to addressing issues
associated with poverty. Policymakers have been arguing for years about
the best way to address poverty. For a long time, programs which
provided cash assistance to women and children did little to encourage
work and in many cases perpetuated the cycle of poverty.
History has shown us that the best remedy to poverty, and
especially the cycle of poverty, is a well-paying job. And I believe
that most people in poverty want to be gainfully employed. I also
recognize, however, that, in many cases, individuals face significant
barriers to successful employment that can be difficult to surmount.
The welfare reforms in the 1990s which transitioned welfare from an
individual entitlement into a capped funding stream have produced mixed
results. The number of families on welfare has declined dramatically,
going from a peak of 5.1 million in 1994 to 1.6 million in 2015.
However, the poverty rate in 2014 was nearly the same as it was prior
to welfare reform.
Many families who are eligible for assistance through TANF do not
receive it. Often times, States do not engage TANF recipients in robust
activities designed to help them obtain and keep a job. The TANF
benefit itself is very small, ranging from only $170 to $923 a month
for a family of three.
However, while that may seem like a relatively small amount per
family, the Federal Government still spends billions of dollars in an
attempt to address poverty each year. In TANF alone, the Federal
Government and the States spent nearly $30 billion dollars in FY 2014.
Unfortunately, the smallest expenditure was directed toward work
program activities, while the largest expenditure was spent on what
States report as ``other expenditures.'' There is no definitive
definition of what these other expenditures are, but we do know that
nearly $11 billion are spent on them each year.
Despite these clear issues with the program, prior efforts to
reform TANF have not been successful. I think it's fair to say that
many on both the left and the right would agree, although for different
reasons, that TANF, the Federal Government's welfare flagship, is in
need of reform.
From 2001 to 2005, many of us here in Congress tried to reauthorize
and reform TANF. Senator John Breaux from Louisiana and I spearheaded
the so-called ``Tri-partisan'' proposal to reform TANF. This proposal
ultimately became the basis of then-Chairman Grassley's PRIDE bill,
which, in a disappointing display of partisanship, was ultimately
filibustered by the Democratic minority.
Several years ago, I wrote a letter to President Obama indicating
my willingness and desire to work with him on welfare reform.
That letter has never been answered.
What is more, the Obama administration has never put forward a
proposal to reauthorize TANF. Instead, this administration has
attempted to bypass the Congress and create regulatory schemes not
authorized under the statute in order to undermine key features of
welfare reform, including the work requirement and child support
enforcement.
In other words, welfare programs--and the individuals they are
designed to help--have become just another pawn in the endless partisan
conflict between the Obama administration and Republicans in Congress.
This is unfortunate, and it is precisely the reason why so many people
are skeptical about any progress being made on poverty and welfare in
the near future.
Unfortunately, until the administration adopts a different posture
with regard to these programs, I'm afraid that this skepticism will
continue to be well-founded.
However, we do things differently here on the Senate Finance
Committee. Even if the administration continues to double down on an
unproductive position, I believe we need to continue to explore issues
associated with poverty and keep searching for ways to improve welfare
in this country. That, in my view, is the best way to keep moving
toward the reforms that TANF needs so badly.
That is why we're here today. I look forward to a robust discussion
of these important issues.
______
Prepared Statement of Aretha J. Jackson, Disabled Veteran
and TANF Recipient
Chairman Hatch, Ranking Member Wyden, and other distinguished
members of the committee:
My name is Aretha J. Jackson. I was born in Prince George's County,
Maryland. I grew up in the projects of Washington, DC and am a graduate
of District public schools. I served in the United States Army, Army
Reserves, and the District of Columbia Army National Guard. I have an
Associate of Arts Degree in Liberal Arts and Graduated Cum Laude with a
Bachelor of Arts Degree in Psychology.
I have struggled with poverty my entire life. I have been homeless
twice in my life; a single parent of two; and have received Temporary
Assistance for Needy Families a number of times in multiple States
including Hawaii and the District of Columbia. I am a Disabled Veteran,
currently in my second year of training as a Veteran Service
Representative in the Pension Management Center at the Department of
Veteran Affairs in Philadelphia, PA.
My personal experiences with the TANF program varies based on time,
place, and regulations. The one thing that remained consistent was the
negative attitude of most of the individuals that work as examiners.
The attitude was one of superiority.
As you know, the program has evolved over the years. I first
started receiving welfare in 1991. It was not difficult to get food
stamps and cash assistance. The housing assistance program in DC helped
me with my security deposit and furniture for my first apartment. The
program focused on getting my basic needs met which allowed me to focus
on my child and getting back into the workforce.
In 2001 after getting pregnant with my son, I quit my job and
reapplied for public assistance, this time in Maryland. The program in
Maryland told me of all of the regulations and requirements I was to
meet, but did not offer a plan of action to accomplish these
unrealistic goals. Because my house foreclosed I had to move back in
with my mother in Washington, DC, thus closing my case with Maryland
and opening a TANF case with the District. I was enrolled in a resume
writing class--the programs back then (2001) were okay.
I returned to work after September 11. In 2003, my mother put my
children and me out and we lived in temporary housing on Bolling Air
Force base and then moved to housing in Fort Myers.
A few months later I was homeless again. I was not equipped to help
myself or anyone else at that time. In 2006 I got married and
reenlisted in the United States Army. By 2007 I had gone to war and got
a divorce.
In 2009, I was discharged from active duty because my family care
plan failed. Once again I found myself unemployed, and in need of
Temporary Assistance for Needy Families. This time I was in Hawaii and
the program was totally different. I was required to volunteer 30 hours
per week after completing workshops to help me build a resume, improve
interviewing techniques, conduct job search, and negotiate salaries. I
enrolled in college and was allowed to attend class in lieu of
volunteer work.
After graduating college I moved back to DC and applied for the
Clinical Psychology program at Argosy University in Roslyn, VA. This is
where I learned that I was experiencing PTSD, anxiety and depression. I
failed a very important class and was removed from the program. Once
again I needed help. This time the TANF program was different from
every other time. I was required to attend America Works of Washington,
DC in order to keep receiving assistance.
America Works is an organization that assists individual in finding
employment. But this program also helps in a way no other program has.
The employees at America Works helped me to see myself as a productive
person again. I was able to share personal information with Jennifer
Tiller that kept me from committing suicide and together we were able
to get me the services I needed from the VA. Employers visited America
Works weekly, interviewed candidates, and hired people all of the time.
There is a glory bell in the lobby for individuals that get a job to
ring. Every time the bell went off you could feel the joy in the air.
Jennifer was tough on all of us, at the same time she showed that she
cared. The information and partnership America Works provided helped me
to obtain full time employment with the VA.
The TANF programs across the Nation need assistance. If we had more
organizations like America Works of Washington, DC, people would be
more willing to return to work.
Thank you for your time, and I look forward to your questions.
______
Prepared Statement of Pamela Loprest, Ph.D., Labor Economist and Senior
Fellow, Income and Benefits Policy Center, Urban Institute
Thank you for the invitation to testify today. My name is Pamela
Loprest. I am a Senior Fellow and labor economist at the Urban
Institute, an economic and social policy research organization here in
Washington. My research focuses on public policies to improve low-wage
labor markets and address barriers to work among disadvantaged
populations. I have studied the Temporary Assistance for Needy Families
(TANF) program since its inception in 1996, including early studies of
the economic well-being of women who left the TANF rolls.
Today I limit my comments to the situation of poor single mother
families, given that is the primary focus of the TANF program. I would
like to make the following points today:
1. The TANF program is increasingly playing a smaller role in
addressing poverty, even for the most needy. While TANF caseloads have
fallen by 30 percent in the last 15 years, the percentage of families
in poverty has grown. Many eligible poor families do not receive these
benefits.
2. Many poor mothers who are not receiving TANF are also not
working. Over time, a growing number of single mothers are without work
and TANF benefits. Many of these families face challenges to work, such
as low education levels and poor health, and many remain in this
situation for many months.
3. There are solutions to bring these families out of poverty. I
discuss two. First, improving access to the TANF program so it serves
the population it is intended to serve. And second, investing in these
mothers' skills to improve their opportunity to work.
tanf caseloads have declined and remain low
The TANF program provides cash assistance to poor families who
must, with some exceptions, participate in work activities. Since the
program began in 1996, there has been a more than 60 percent decline in
TANF caseloads. In the last 15 years caseloads have continued to fall,
from 2.4 million families receiving benefits monthly in 2000 to 1.6
million families (or 4.2 million individuals) today.\1\ This is about a
30 percent decline, while over the same time period, the percent of
families in poverty has grown.\2\
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\1\ U.S. Department of Health and Human Services, Office of Family
Assistance. TANF Caseload data. http://www.acf.hhs.gov/programs/ofa/
programs/tanf/data-reports.
\2\ The poverty rate in 2000 for all families was 8.7 percent and
in 2014 was 11.6 percent. For female headed household (no husband
present), the rate over the same period went from 25.4 percent to 30.6
percent. U.S. Census Bureau. Historical Poverty Tables-Families.
https://www.census.gov/hhes/www/poverty/data/historical/families.htn.
The flexibility given States in setting TANF policy (within
federally set boundaries) means the program looks very different across
States. Differences include benefit levels, the length of time families
can receive benefits, work activities allowed or required, and the
caseload relative to the population in poverty all vary considerably
from State to State. These differences go beyond differences we would
expect from State poverty and other economic indicators. For example,
just two States--California and New York--account for roughly half of
TANF caseloads today, although only about one-quarter of children in
poverty live in those States.\3\ Across the country, only about one-
quarter of families in poverty receive TANF benefits in the U.S. In 10
States, less than 10 percent of families in poverty receive TANF
benefits.\4\
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\3\ U.S. Census Bureau. 2014. State Poverty Report.
https://www.census.gov/content/dam/Census/library/publications/
2014/acs/acsbr13-01.pdf.
\4\ Center for Budget and Policy Priorities. 2015. ``Chartbook:
TANF at 19'' http://www.cbpp.org/research/family-income-support/chart-
book-tanf-at-19.
many families eligible for tanf benefits do not receive them
Over time, fewer and fewer eligible families are receiving TANF.
The ``participation rate'' (figure 1) shows the number of families
receiving TANF assistance relative to the number eligible for benefits.
This rate has declined from a high of 86 percent in 1992 to 79 percent
in 1996, and to 32 percent in 2012, the most recent year available.
This means only about one-third of all families eligible for TANF
receive these benefits.\5\
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\5\ Participation rates for TANF do not remove from the eligible
pool income eligible families that are not receiving benefits because
they are under full family sanction for non-compliance with program
rules. My calculations suggest excluding these families could increase
these participation rates in 2013/2014 by as much as 5 percentage
points. In addition, these results do not include Solely State Funded
programs, State programs that generally mimic TANF income eligibility
requirements but do not use Federal TANF funds and are not subject to
TANF program rules. If counted as TANF receipt, we estimate these would
add at most 2 to 3 percentage points to these participation rates. The
resulting participation rate in recent years would be approximately 40
percent.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
By comparison, USDA's ``Reaching Those in Need'' publication found
the participation rate of Supplemental Nutrition Assistance Program
(SNAP) benefits nationally to be 83 percent in 2012.\6\ SNAP
participation was not always higher than the TANF participation rate.
In the years after TANF implementation both programs experienced
similar and declining participation rates. Explicit steps to ease
access and increase participation among eligible families were taken in
the late 1990s early 2000s. To be clear, I am not speaking of expanding
program eligibility, but participation among eligible families.
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\6\ Cunnygham, Karen. 2015. ``Reaching Those in Need: Estimates of
State Supplemental Nutrition Assistance Program Participation in
2012.'' Prepared by Mathematica Policy Research for the USDA Food and
Nutrition Service. http://www.fns.usda.gov/reaching-those-need-
estimates-state-supplemental-nutrition-assistance-program-
participation-rates.
The low participation rate in TANF should be cause for concern.
Even as TANF seeks to move families from benefit receipt to self-
sufficiency--meaning families no longer need benefits--families in need
should be able to access and benefit from this assistance. This is
especially true as single mothers who are eligible for TANF, but not
receiving it, are generally poor. TANF eligibility rules are such that
only very poor families (in most states well below the poverty line)
are eligible for these benefits. For example, although the exact
calculation of benefits is complicated, in more than half the states a
single-mother of two earning as little as $800 a month would not be
eligible for TANF.\7\
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\7\ Huber, Erika, Elissa Cohen, Amanda Briggs, and David Kassabian.
2015. ``Welfare Rules Databook: State TANF Policies as of July 2014.''
OPRE Report 2015-81. Office of Planning, Research and Evaluation,
Administration for Children and Families, U.S. Department of Health and
Human Services.
the share of single mothers not receiving tanf benefits and
not working has increased
The number of single mothers who are neither working nor receiving
TANF has increased over time. This increase shows not only that TANF is
failing to reach many eligible families, but also that many of these
families are not working, the aim of the TANF program and the main
avenue out of poverty. Data show that over 20 percent of low-income
single mothers (with income less than 200 percent of poverty) in 2010
were disconnected, meaning that they were not working and not receiving
TANF or disability benefits.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Research dating back to the early years of the TANF program when
caseloads were declining rapidly focused on this group of so-called
``disconnected'' families. My own research shows that about one-fifth
of families who exit or lose TANF benefits do not find work (or move to
disability benefits) in at least the next 4 months.\8\ More recent
studies show that many of these mothers and their children have never
received TANF.
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\8\ Loprest, Pamela and Austin Nichols. 2011. ``Dynamics of Being
Disconnected from Work and TANF.'' Urban Institute. http://
www.urban.org/research/publication/dynamics-being-disconnected-work-
and-tanf.
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Why Are So Many Poor Families Not Receiving TANF Benefits?
Research shows that many poor families who do not receive TANF lack
accurate information or they have difficulty accessing the program and
maintaining benefits. To better understand why poor families do not
receive TANF requires both large-scale national and State level survey
data as well as in-depth interviews and ethnographic studies, including
the recent book ``$2.00 a Day'' by Luke Schaefer (a co-witness on this
panel) and Kathryn Edin. Research by my colleagues interviewing poor
single disconnected mothers finds that some mothers lack information
about TANF or have misinformation--including rumors among a Latina
immigrant community in Los Angeles that benefits would need to paid
back in the future by their children. For the most part, those who had
experience with TANF found the program to be difficult to access and
benefits difficult to maintain. Programs had long wait times, required
multiple office visits and interactionsto provide necessary paperwork,
and involved intrusive questions, particularly compared with the SNAP
program. Some mothers in this study had received benefits but lost them
after hitting time limits, but they were still unable to find work.\9\
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\9\ Seefeldt, Kristin and Heather Sandstrom. 2015. ``When There is
No Welfare: The Income Packaging Strategies of Mothers Without Earnings
or Cash Assistance Following an Economic Downturn.'' The Russell Sage
Foundation Journal of the Social Sciences: Severe Deprivation, vol. 1
(forthcoming).
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Why Are So Many Poor Single Mothers Without Work?
If these mothers could find jobs and overcome challenges to keeping
those jobs, their circumstances would no doubt be improved. The vast
majority of poor disconnected single mothers in the U.S. are without
cash income (either earnings or public benefits) because they lost a
job. Many of them have worked in the past and work sporadically;
however, a central difficulty for these mothers is finding and
sustaining work. Reasons for their difficulties include lack of access
to affordable child care and to reliable transportation.
Disproportionate shares of these mothers suffer from physical and
mental illness, sometimes exacerbated by the periods spent struggling
without earnings or cash assistance. Almost a third have less than a
high school education. Further, there are few jobs available in many of
the communities in which these poor mothers and children live.\10\
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\10\ Ibid. Seefeldt and Sanstrom (2015); Loprest and Nichols
(2011).
The struggles of these poor single mothers are in some sense the
struggles of all poor families, including low-wage workers and the
long-term unemployed. These mothers are simply those who are on the
losing end of some of these struggles: Those who couldn't make child
care arrangements work, who lost a job due to unreliable transportation
or getting sick and having no paid leave, or who were denied or ran out
of unemployment benefits.
What Can We Do To Help Families in Poverty Who Do Not Have Cash
Assistance or Earnings?
Help families access TANF assistance
As our country's primary means-tested cash assistance program for
nondisabled poor families, TANF should be able to encourage work and
movement toward self-sufficiency through mandatory work activities and
be accessible to families. Families eligible for TANF and in need
should be receiving this important benefit. Overall TANF is not serving
these very poor mothers who are not working--one of the key target
groups for the program.
The program should work to correct misinformation and
misunderstanding among potentially eligible parents and reduce barriers
to access. Just as Federal and State policies have worked to make SNAP
benefits accessible to eligible families and increase participation,
the TANF program should have this as a goal.
State and Federal policymakers have made numerous changes to
regulations and program practices for SNAP, Medicaid, and child care
programs that have reduced the bureaucracy and burden of application
and recertification for these programs. One example of this is the Work
Supports Strategies initiative.\11\ This project has supported the work
of six States around the country in improving access to public work
supports (SNAP, Medicaid, and child care) for eligible low-income
families. Through a combination of changes in State policies and
regulation, streamlining the application process, and modernizing
technology (in many cases made possible through funds available from
the Affordable Care Act) States have been able to make the application
process more efficient while improving benefit access for those
eligible. While this project did not focus on TANF, similar
improvements can be made to TANF. Many poor mothers who are eligible
for but not receiving TANF receive SNAP suggesting the possibility of
using SNAP application as a point for reaching out to potential TANF
recipients--at least for a targeted subgroup of mothers--overcoming
misinformation and making initial application and access easier.
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\11\ For more information go to http://www.clasp.org/issues/work-
support-strategies.
However, the low level of TANF benefits in many States and the
temporary nature of these benefits suggest that TANF receipt alone,
while important, is not the answer to helping families move out of
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poverty.
Invest in skills to increase work
Work is the path to a better life for the majority of parents and
their children, and disconnected poor single mothers are no exception.
Rigorous evidence from studies of a number of different programs
shows significant improvements in employment and earnings are possible,
even for families with significant work challenges, such as poor health
or issues with substance abuse.
Some programs created by States to specifically target families
with work challenges have demonstrated success. These programs, dating
from the period after TANF was implemented, from the mid-1990s to the
present, used a mix of strategies to help recipients prepare for and
find work.\12\ Some of these programs focus on providing work
experiences for families while assessing their needs and providing
supports to help them work. Other programs focus on providing treatment
(particularly for those with physical or mental health problems) and
then moving individuals into work with supports. Some used a mix of the
two.
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\12\ Bloom, Dan, Pamela Loprest, and Sheila Zedlewski. 2011. ``TANF
Recipients with Barriers to Employment.'' produced for the Office of
Planning, Research and Evaluation. Washington, DC: The Urban Institute.
Other programs targeting a broader group of low-skill workers,
including TANF recipients, have, through rigorous evaluations,
demonstrated positive outcomes. The Sectoral Impact Study used
experimental methods to evaluate three industry-
specific training programs targeting disadvantaged populations. The
study showed significant increases in employment and earnings across a
variety of industry sectors.\13\ Over a 2-year period, program
participants worked on average 1.3 months longer than others in a
control group and a greater number of hours. The average employment
rate for the treatment group was 70 percent, compared to 60 percent for
controls. Earnings for participants were about $4,500 greater than for
control group members over this period. One of the programs in the
evaluation, JVS-Boston, showed significant earnings gains for
participants who had ever received welfare, deriving primarily from
increases in employment.
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\13\ Clymer, Carol, Maureen Conway, Joshua Freely, Sheila Maguire,
and Deena Maguire Schwartz. 2010. ``Tuning in to Local Labor Markets:
Findings From the Sectoral Employment Impact.'' Public Private
Ventures.
http://www.aspenwsi.org/wordpress/wp-content/uploads/
TuningIntoLocalLaborMarkets.pdf.
A recent study of the experiences and outcomes of TANF recipients
in the Health Profession Opportunity Grant (HPOG) Program (funded by
the Department of Health and Human Services) highlights the positive
outcomes these recipients can achieve as well as some of the challenges
they face.\14\ TANF recipients had equally favorable outcomes in terms
of completing training and finding employment as non-TANF participants.
However, some training providers observed that TANF policies can pose
challenges to recipients' participation in education and training
programs. Despite this, communication and collaboration between TANF
agencies and training programs were able to overcome these obstacles.
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\14\ Rulf Fountain, Alyssa, Alan Werner, Maureen Sarna, Elizabeth
Giardino, Gretchen Locke, and Pamela Loprest. 2015. Training TANF
Recipients for Careers in Healthcare: The Experience of the Health
Profession Opportunity Grants (HPOG) Program, OPRE Report # 2015-89.
Office of Planning, Research and Evaluation, Administration for
Children and Families, U.S. Department of Health and Human Services.
The success of these work programs shows that we can increase work
through investment in the skills of poor and low-skilled mothers.
Unfortunately, these programs require substantial resources, and
similar programs are often not available to poor families, through the
TANF program or other publicly-funded workforce programs. Helping move
more families to work require a greater investment in workforce
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programs that can improve skills.
Improve TANF work programs
We need to make changes to TANF policies that encourage greater
spending by TANF programs on work-related activities. Recent analysis
by the Center on Budget and Policy Priorities shows that only about 8
percent of TANF funds are spent on work activities and another 16
percent on child care.\15\ The amount offunds spent per case is far
below the cost of programs that have been demonstrated to improve work
and earnings for poor low-skill families.
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\15\ Schott, Liz, LaDonna Pavetti, and Ife Floyd. 2015. ``How
States Use Federal and State Funds Under the TANF Block Grant,'' Center
for Budget and Policy Priorities. http://www.cbpp.org/research/family-
income-support/how-states-use-federal-and-state-funds-under-the-tanf-
block-grant.
In addition, it makes sense to better integrate TANF work programs
with the broader public workforce system to provide the best workforce
interventions to those in need. The Workforce Investment and
Opportunity Act (WIOA) increased focus on providing services to
individuals who have limited skills and face other barriers to work.
WIOA also requires unified planning at the State and local level to
align and coordinate policies and services and allows that planning to
include additional programs such as TANF.\16\ These changes signal the
value of coordination and collaboration across WIOA and TANF programs.
In practice in many States, TANF work programs are not coordinated with
the public workforce system. Research has identified some of the
biggest obstacles to coordination in the two programs, including
differences in the performance measures they use to demonstrate
success.\17\ Federal policymakers should work to overcome these
differences to provide greater and more efficient access to workforce
investments for low-skilled mothers.
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\16\ Bird, Kisha, Marcie Foster, and Evelyn Ganzglass. 2014. ``New
Opportunities to Improve Economic and Career Success for Low-income
Adults and Youth: Key Provisions of the Workforce Innovation and
Opportunity Act.'' Center for Law and Social Policy.
http://www.clasp.org/resources-and-publications/publication-1/
KeyProvisionsofWIOA-Final.pdf.
\17\ Kirby, Gretchen, Julia Lyskawa, Michelle Derr, Elizabeth
Brown. 2015. ``Coordinating Employment Services Across the TANF and WIA
Programs.'' Mathematica Policy Research.
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conclusion
One of the important successes of U.S. policy in fighting poverty
is the movement to make work pay for low-wage workers. The Earned
Income Tax Credit, SNAP and other programs lift millions of people out
of poverty. Careful analysis of the impact of these programs on poverty
rates (including all government benefits and using the supplemental
poverty rate measure that accounts for government benefits and taxes)
shows that poverty would be more than twice what it is in 2014 (29.1
percent instead of 13.8 percent) without these public safety net
programs.\18\
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\18\ Sherman, Arloc, and Danilo Trisi. 2015. ``Safety Net More
Effective Against Poverty than Previously Thought.'' Center for Budget
and Policy Priorities. http://www.cbpp.org/research/poverty-and-
inequality/safety-net-more-effective-against-poverty-than-previously-
thought.
However, for poor women without work, our work-based safety net is
of limited assistance. Investing in ways to improve the work prospects
of poor single mothers, through the TANF program and other publicly
funded workforce programs, is an important goal. Improving access to
TANF for those poor mothers who are eligible and without work is
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another important goal.
Of course, it also critical to maintain the existing public work
support system for low-income workers, including the EITC, SNAP
benefits, subsidized child care, and public or subsidized health
insurance. Finally, while our topic today is welfare and poverty, it is
important to emphasize that for work to be a road out of poverty, we
also need to have a robust economy to create those jobs.
______
Prepared Statement of Jon S. Pierpont, Executive Director,
Utah Department of Workforce Services
Chairman Hatch, Senator Wyden, and members of the U.S. Senate
Committee on Finance, thank you for the opportunity to address you.
I want to start with a brief story. A few months ago, I had the
opportunity to visit with a mother from northern Utah. She told me
about her efforts to find a stable job with an income sufficient to
provide for her two young sons. This mother grew up in poverty and
experienced the challenges that accompany that circumstance. These
challenges remain with her as an adult, and unfortunately, are likely
to continue with her children, which is not unusual for children
growing up in economic hardship.
I was moved by her strong desire and motivation for finding a path
out of poverty and providing increased stability and opportunity for
her kids. But it was something she said later that reveals why Utah's
efforts to decrease the number of children experiencing
intergenerational poverty is so important. She said, ``There are a lot
of brilliant minds lost in poverty.''
This young mother's motivation is not unique. Thousands of Utah
families strive daily for the opportunity to provide a better life for
their children. And, to be sure, Utah's incredibly strong economy is
helping to provide that opportunity.
More and more Utahns are employed and businesses continue to grow
and innovate in our State. This has led to an economy recognized as one
of the strongest in the Nation. Our unemployment rate is 3.6 percent,
and our job growth is a robust 3.9 percent, with job opportunities for
Utahns of all levels of skill and training.
While our State's economic success is laudable, we recognize that
many Utah families still face barriers to self-reliance.
Ironically, it is exactly this economic growth that is allowing
Utah to focus more on the families struggling to break free from the
cycle of poverty, passed from one generation to the next. In Utah, we
refer to this cycle of poverty as ``intergenerational poverty.''
In 2012, the Utah Legislature seized the opportunity to address the
needs of families struggling to emerge from intergenerational poverty.
At that time, there was a strong belief that families in the cycle of
poverty were utilizing public assistance at higher rates, experiencing
higher rates of substance abuse, were more likely to be incarcerated,
and that the children were not able to take advantage of the
opportunities necessary to achieve their hopes and dreams, as they
became adults.
As a result, the Legislature adopted the Intergenerational Poverty
Mitigation Act requiring our department, the Department of Workforce
Services, to study and evaluate administrative data to determine
whether the anecdotal evidence aligned with the reality for families
utilizing public assistance. It required our department to release the
data in an annual report, with a focus on understanding the challenges
and barriers children in poverty face.
The Act also required our department to analyze the data by
distinguishing between two types of poverty: ``situational poverty''
and ``intergenerational poverty,'' recognizing that for the majority of
people, experiences with economic hardship leading to utilization of
public assistance are brief and temporary caused perhaps by losing a
job, experiencing a health crisis, or going through a divorce, but for
others, no amount of support leads to self-reliance. Differentiating
between types of poverty is a productive approach to understanding it,
allowing us to shed light on the adequacy of programs and resources
utilized to address the issue for both groups.
The Act compelled us to compile and evaluate the data and since
2012, we have released four annual reports. The level of research and
analysis is unprecedented. We have gathered data across multiple State
agencies to determine how issues such as childhood abuse and neglect
and academic performance correlate with intergenerational poverty.
Initially, the ability to share data across agencies presented
significant challenges and took about 2 years to overcome. Our partners
in this effort worked hard to develop Memorandums of Understanding with
our agency, ensure privacy was protected, and identify the same
individuals across multiple State programs. The result is a report that
evaluates data within four areas of child well-being, identified
through research, as critical areas for children in establishing the
foundation for a successful adulthood. Those areas of well-being
include family economic stability, early childhood development,
education, and health.
We have learned that families experiencing intergenerational
poverty have more sporadic employment, earn wages insufficient to meet
basic needs of their children, lack access to healthcare, and lag
significantly behind the rest of Utah's children in educational
outcomes.
The data also reveals that nearly one in four Utah adults receiving
public assistance received it as children, 31 percent of Utah's
children are at risk of remaining in poverty as adults, and
approximately 25 percent are victims of child abuse and neglect, as
were their parents.
I mentioned the research first to demonstrate its importance.
Gathering all the data, organizing the key metrics, and developing a
way to quantify the families experiencing this kind of poverty are all
vital steps. Good policy cannot move forward without good data.
Once our Department released the data and defined the problem, the
Legislature refined the act to form goals that will reduce
intergenerational poverty and welfare dependency among Utah children.
The Legislature created the Intergenerational Welfare Reform
Commission, which is responsible for establishing a 5- and 10-year plan
designed to meet the act's goal. It placed the five executive directors
from the State agencies serving the needs of Utah's vulnerable families
on the Commission so that those agencies could improve coordination of
services and programs, share data and evaluate internal policies. Three
of the members serve in the Governor's cabinet and include myself from
the Department of Workforce Services and my counterparts from the
Department of Health, and Department of Human Services. Also on the
Commission are the State Superintendent of Public Instruction and the
Juvenile Court Administrator.
The Act did not anticipate that its goal would be achieved by
government alone. It compels the Commission to engage a diverse network
of stakeholders in these efforts including academic experts, business
leaders, religious organizations, non-profits, and community-based
organizations.
With our solid research foundation, the Commission is moving
forward with this next crucial step: aligning all State agency programs
that serve impoverished families. By sharing data across agencies, we
are breaking down the silos that so often arise in government. When the
same family uses services from more than one State agency, that's an
opportunity to streamline the manner in which they interact with State
government. By focusing on these families, we are working together to
support their efforts as they work to build a brighter future for their
children.
It is important to note what Utah's intergenerational poverty
effort is not. The initiative is leading the way not by outlining
numerous new services or massive additional programs that incur more
government spending, but by more effectively using the services and
programs already in place.
This coordination will yield greater effect at removing barriers
for families working toward economic independence, without burdening
taxpayers with additional costs.
One example of program alignment is the development of our two-
generation demonstration project, ``Next Generation Kids.'' As part of
our research, we evaluated families participating in our TANF cash
assistance program, the Family Employment Program. Interestingly, our
program includes the word ``family,'' yet it focuses exclusively on the
adult. We have found that adults often cannot truly be successful when
the needs of their children are not being met. As a result, we have
modified our program so that while we are engaging with parents to get
them employed or increase their job skills, we are also ensuring that
those parents are meeting the basic needs of their children. We are
doing this while continuing to meet all Federal requirements.
Not only is the project focusing on the family, it is also
physically located in a school serving large numbers of children
experiencing intergenerational poverty. By being placed in the school
and developing a relationship with the school district, our staff is
now able to communicate with teachers, principals and superintendents
about a child's academic performance and incorporate educational
outcomes in a family's case management plan.
As mentioned earlier, this two-generation approach to case
management is not designed to grow government. Rather, our caseworkers
are connecting families to the extensive resources available through
other government entities, religious organizations, non-profits, and
other community groups. They are assisting in the coordination of
services and simplifying service delivery with the eventual goal of
developing a single, case management plan for a family where today,
several may exist.
Although ``Next Generation Kids'' has only been existence for 1
year, it is improving the lives of families like the young mother I
referenced earlier. The program is connecting parents to job training,
helping them obtain GEDs, and connecting them to employment while their
children are now enrolled in high-quality preschool, participating in
afterschool programs, and improving school behavior.
This test program is just part of the body of information we are
continuously receiving and applying to our broader programs. We have
identified the government programs related to the four focus areas of
child well-being and we are identifying any crossover, as well as gaps.
Utah is committed to this effort. We are taking the research into
the local communities across our State, empowering local leaders with
the information, and providing tools to take the first steps in
addressing intergenerational poverty in our neighborhoods and schools.
I am encouraged by Utah's economic growth and the opportunity it
presents to all Utah families.
I am moved by the research clearly showing the impact of this
unique form of poverty, and why we must implement a unique approach to
address it. And I am motivated by the dedication and innovation taking
place within our State, as agencies coordinate existing resources to
better serve the entire family.
Utah believes strongly in the potential of individuals like the
young mother I met. She is one of those brilliant minds lost in
poverty. Those brilliant minds represent human capital. Capital that,
if we tap into it, will empower these families to succeed, equip their
children to escape poverty, and in turn allow our economy to flourish
like never before.
There is clearly a significant amount of work to be done to fully
understand and address this issue. But the combination of a number of
factors have created the perfect opportunity to truly make a difference
for families experiencing intergenerational poverty--and it is an
opportunity we must not, and will not, let slip by.
We will continue to learn and apply new information to our methods.
And we hope that any successes we share can be a resource for other
States heeding the call to empower families everywhere to achieve their
greatest potential in our new economy.
To view Utah's Intergenerational Poverty Annual Reports and the
Five- and Ten-Year Plan, visit http://www.jobs.utah.gov/edo/
intergenerational/index.html.
Thank you.
______
Prepared Statement of H. Luke Shaefer, Ph.D., Associate Professor and
Co-Author of ``$2.00 a Day: Living on Almost Nothing in America,''
School of Social Work and Gerald R. Ford School of Public Policy,
University of Michigan
In 2010, my colleague Kathryn Edin, a qualitative researcher who
has studied American poverty for over 2 decades, began to encounter
more and more families in conditions that were strikingly different
from what she had seen a decade and a half earlier. These families did
not just have too little cash to live on; they often had no cash at
all. While some claimed benefits like the Supplemental Nutrition
Assistance Program (SNAP), it seemed to Edin that the absence of cash
permeated every aspect of their lives.
Had the number of American households with children surviving on
virtually no cash income increased? Edin and I looked first to the
nationally representative Survey of Income and Program Participation
(SIPP), which yields the largest estimates of income among poor
families. As of 2011, we find that in any given month there were 1.5
million households with 3 million children reporting cash incomes of no
more than $2 per person, per day, up 130 percent from 15 years prior.
We examined other data too, such as SNAP administrative tallies of
recipients with no cash income, counts of homeless school children, and
demand for charitable food aid. A consistent story emerged of worsening
conditions faced by our Nation's poorest families.
How do families end up in such extreme conditions? What do they do
to survive, and what are the consequences, especially for children? In
search of answers, we sought out families who were experiencing extreme
poverty in different parts of the country: Chicago, IL; Cleveland, OH;
Johnson City, TN; and a series of small towns in the Mississippi Delta.
We followed 18 families over a number of years, and have published our
findings in ``$2.00 a Day: Living on Almost Nothing in America.''\1\
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\1\ Edin, Kathryn J. and Shaefer, H. Luke (2015). $2.00 a Day:
Living on Almost Nothing in America. Boston, MA: Houghton Mifflin
Harcourt. To protect the individuals written about in this book, the
names of people have been changed. All facts in this testimony come
from ``$2.00 a Day'' unless otherwise cited.
A clear theme that emerged from our research--and one we see
evidence of in the SIPP--was that the families we met envisioned
themselves first and foremost as workers. Jennifer Hernandez in Chicago
says that working ``gives me a sense of purpose.'' Rae McCormick of
Cleveland says, ``My dad raised me that you work for everything you
have.'' When we asked families to imagine a better life in 1 year's
time, the near universal response was that they would be working in a
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job with stable, full-time hours, paying $10 to $12 per hour.
Yet devotion to work is not enough to shield these families from
spells living on virtually nothing. The labor market they must compete
in is unforgiving. We saw numerous examples of a parent applying for
dozens upon dozens of jobs, to no avail. When they do find work, it is
often in the service sector where they must manage instability in the
number and timing of work hours.
Jennifer Hernandez had been hunting for work for 10 months while
living in homeless shelters with her children, Kaitlin and Cole, when
she finally landed a position with a small family cleaning business. At
first she liked the job, which included cleaning vacant apartments and
office buildings. But as the Chicago winter set in, the workload
shifted to a steady stream of foreclosed homes. Jennifer reports that
these houses had ``been shuttered for a long time. No power, no working
lights, no heat.'' The cleaning crew never knew what to expect: a
squatting family? A crack house? A big obstacle was the lack of running
water. Jennifer's team would bring their own in large buckets, but it
would quickly turn pitch black. Off they would go, buckets in hand, to
a neighbor's home or the nearest gas station to refill and carry the
heavy buckets back to the job.
Breathing in dank air in moldy, cold homes, Jennifer's immune
system weakened. She caught viruses and passed them onto her kids. As
she called in sick more frequently, her boss marked her as unreliable,
giving her fewer hours on the weekly schedule. Eventually her bi-weekly
paycheck fell to $200. She had a few months left of guaranteed housing,
provided by the shelter when she initially got work. She decided to
quit her job so she could get well and look for a new one. It took her
10 months to find this job, how long would it take to find the next?
Sometimes unstable relationships led to job loss. Rae McCormick
insists that her shifts at Walmart were the best parts of her week,
aside from the fleeting moments she and her 2-year-old daughter, Azara,
enjoyed together when ``uncle'' George and ``aunt'' Camilla were out of
the Cleveland house they shared. In just 6 months at work she was named
cashier of the month twice, because of her ability to key in from
memory the four-digit bar codes of popular produce items. She would
read the barcode numbers into a recording device and set it to play on
repeat as she slept. ``My subconscious did the job!''
None of this mattered, though, on the day that she climbed into
George's pick-up and the gas light flashed on as she turned the key.
She had just spent her entire paycheck on rent, groceries, and diapers,
and had given George the agreed upon $50 for gas so she could take the
truck to work. Yet George and Camilla had emptied the tank over the
weekend. Rae called her manager in a panic. Could anyone help her out,
she pleaded? Her manager replied that if she couldn't get to work, she
shouldn't bother coming in again. What's more, Rae says that George
``sat there and told me that I'm selfish . . . that it was my fault I
lost my job. All of it got put on me. And that's when I was like, `You
know what? I've had enough. I can't do it anymore.' '' She moved back
in with an abusive ex-boyfriend. Maybe things would be better with him.
None of the families in our study thought of TANF as a viable
lifeline. When we asked Modonna Harris, a mother of one who was living
in a Chicago family homeless shelter, whether she had considered
applying for TANF, she told us, ``they just aren't giving that out
anymore.'' Rae McCormick was reluctant to apply; yet after months
without a job, she went down to the welfare office to ask for help. She
reports that a caseworker told her ``Honey, I'm sorry. There are just
so many needy people, we just don't have enough to go around.'' Today
only a quarter of poor families with children access aid from TANF, and
only about 26 percent of TANF dollars goes toward basic assistance.
States take advantage of the significant flexibility allowed by the
TANF block grant to divert dollars to other purposes, in some cases
simply replacing existing State expenditures.\2\
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\2\ Center on Budget and Policy Priorities. (2015). ``Chart Book:
TANF at 19.''
http://www.cbpp.org/sites/default/files/atoms/files/8-22-12tanf-rev8-
20-15tanf-chartbook.pdf; Schott, Liz, Pavetti, Ladonna, and Floyd, Ife.
(2015). ``How States Use Federal and State Funds Under the TANF Block
Grant.'' Center on Budget and Policy Priorities, http://
www.cbpp.org/sites/default/files/atoms/files/4-8-15tanf_0.pdf; See
alsoGermanis, P. (2015). ``TANF is Broken! It's Time to Reform `Welfare
Reform.' '' White paper.
If a family accesses programs such as SNAP and Medicaid, do they
really need cash? Beyond the high rates of housing instability and
material hardships we saw among families in extreme poverty, the best
evidence that cash matters is the lengths to which families will go to
generate just enough cash to buy new underwear or decent clothes at the
thrift store for their kids, stay in their home for another night, or
keep the lights on. Parents often feel they must resort to illegal
activities to care for their children. They try to make the most of the
few resources they have, including their bodies and their benefits,
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often at great cost.
Twenty-one-year-old Jessica Compton in Tennessee, fair skinned with
a cloud of smoky black hair, donates her blood plasma for about $30 up
to twice a week, as often as the law will allow. When we met her,
plasma sales were her family's only source of cash income, as her
husband Travis's hours at a fast food joint had been cut after the
holidays. Travis cannot donate because of his tattoos, but he can watch
little Rachel and Blythe while Jessica is at the clinic. Jessica often
is anxious that she will fail the required health tests. To get her
iron count high enough she eats an iron-rich snack bar on the way, and
does breathing exercises to lower her blood pressure. After the
procedure is over she says, ``I get tired. Especially if my iron's
down, I get, like, really tired.'' She can point to an obvious
indentation in the crease of her elbow, a small scar from giving plasma
so often.
The families we met very much subscribe to American ideals. They
want to work in a decent job, they want a safe place to live, and they
want to do right by their children. The more we can align policy to
help them meet these goals, the more we, as a country, will have done
right by Jessica and Travis, Jennifer, Modonna, and Rae. Whatever
assistance I can provide as you consider policy alternatives with this
goal in mind, I am at your service.
______
Prepared Statement of Hon. Ron Wyden,
a U.S. Senator From Oregon
It was Ronald Reagan who said, ``the best social program is a
job.'' I think it's fair to say that for most Americans, a principal
goal of the social safety net is to help individuals and families in
their times of struggle and reconnect them to gainful employment so
they can pay their rent, pay for groceries, and take care of their
children.
Extreme poverty has risen substantially, but a key program that's
supposed to connect people to jobs so they can rise out of poverty--
Temporary Assistance for Needy Families or TANF--isn't working. TANF is
a fixed, frozen block grant that States can use for a wide variety of
anti-poverty programs. But too often these dollars aren't making a dent
in poverty or connecting struggling parents to employment.
Our social safety net has frayed. Millions of people are walking on
an economic tightrope forced to make tough decisions like whether they
should pay to keep the lights on or food in the cupboards. And the
safety net isn't working for them.
Today we're going to hear from a witness who has walked that
tightrope herself. Ms. Aretha Jackson, a disabled veteran and former
TANF recipient, has served her country since she graduated from high
school in 1989. After a tour of duty in Iraq and serving in the U.S.
Army, the Army Reserves and the National Guard, the idea that Ms.
Jackson should have to overcome homelessness in the country she fought
for is unfathomable.
We're also going to hear from Dr. Luke Shaefer, who will talk about
what his research into $2 a day poverty means through the stories of
real people like Jessica in Tennessee, who has scars from donating
plasma twice a week for $30 a donation--as often as the law will allow.
Many of us can only imagine what it's like going to bed scared to death
that our child might get sick because we can't afford to take a day off
from work, much less a doctor's bill.
One area that I'd like to focus on is how TANF can be used as a
tool for employers to hire, train and empower those in need of safety
net services so they can have a far brighter future. We ought to be
thinking about how we can help make that possible.
What's striking about all this, and what Dr. Shaefer found in his
many conversations with people in poverty, is that people want to work.
But when they can't get work, they are left with desperate choices.
I'm particularly troubled by the fact that poverty rates are
especially dire among single mothers and minorities, who are 2-3 times
more likely to live in poverty than the rest of Americans.
From Oregon, State officials have passed along the story of a
single mother whom we'll call Mary. Mary first received TANF 4 years
ago to help provide for her two children--one who is living with
Autism. Mary overcame a drug addiction, a criminal record, and family
adversity and got a job at a commercial printer. Her first week, she
worked 54 hours and was able to go off TANF last February. Mary's case
manager said of her, ``She just keeps going.''
There are 47 million Americans in poverty but many of them don't
even know that TANF exists to help them, and in many cities and States
across America, they're absolutely right.
I don't think it's naive of me to think a jobs program should
measure how well it connects people to jobs. But TANF doesn't. States
shouldn't get credit for simply kicking families out of the program
regardless of whether they've helped them find work or not. What really
ought to count is whether recipients find their way into a job that can
support their families.
The answer is to improve the program--to make it more relevant,
more accessible, and more effective for families in poverty. TANF
should build ladders that help families find good jobs and climb out of
poverty for good. We ought to work together on a bipartisan basis to
fix this lifeline to meet people's needs and give them a springboard to
better opportunities. This hearing is a chance for the Finance
Committee to consider ways to improve TANF and accomplish that goal.
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