Statement of the Hon. Martin O'Malley, Mayor, Baltimore, Maryland, and 
Chairman, Task Force on TANF Reauthorization, U.S. Conference of Mayors

Testimony Before the Subcommittee on Human Resources
of the House Committee on Ways and Means

Hearing on Welfare Reform Reauthorization Proposals

April 11, 2002

Good Afternoon, Mr. Chairman, Congressman Cardin and Members of the Subcommittee.   Thank you for giving me the opportunity to testify before you today on an issue critical to America’s cities and America’s families – including many in my city, Baltimore.

I am Martin O’Malley, Mayor of Baltimore.   I am testifying today on behalf of The United States Conference of Mayors in my capacity as Chairman of the Conference of Mayors Task Force on TANF Reauthorization.

The U.S. Conference of Mayors represents mayors on both sides of the political aisle.  And regardless of party, this is an issue about which we care deeply.  Cities have made great progress in reducing our welfare caseloads since 1996.  Child poverty recorded its greatest 5-year drop in 30 years.  The percentage of people on welfare fell to its lowest level in 35 years.  These are indisputably good things.

In the past five years, we’ve learned what works and what doesn’t.  For example, education and training and access to child care are major factors in how people fare after welfare. 

• People with a degree or skill are more likely to escape poverty. 
• And among parents who left welfare for work, and are now unemployed, lack of child care was the leading reason for their job loss.

Baltimore’s Congressman Ben Cardin introduced a bill that addresses one of these critical needs by increasing Child Care and Development Block Grant funding to $11.5 billion. 

Welfare offices play a critical role in determining whether families leaving welfare actually receive the support they need. 

• They must one-stop centers providing referrals for a range of services including child care, health care and transportation.  And they would work better by combining TANF and Workforce Investment Act funding.

This year, we have an opportunity to work together – on all levels of government – to complete the job we have begun: moving more families from welfare to work, and more working poor families to a better, more self-sufficient life.

My testimony today will focus on three primary objectives that are critical in TANF reauthorization: opportunity, accountability and outcomes.

Opportunity

My personal view is that time limits and work participation rate requirements are critical to the continued success of welfare reform.  But while they have changed expectations, these reforms have resulted in a welfare system that is increasingly concentrated in America’s cities.  In my own state of Maryland, since 1995, Baltimore has gone from representing 43% of the State’s welfare caseload to 63% – even as the number of cases in our city dropped by more than half.

This shift, has left us with the enormous task of lifting the residents of America’s poorest, most violent and blighted communities – communities that were allowed to, or even hastened into, decay by decades of well-intended but misguided government policy on the federal, state and local level.

Given government’s culpability, we have a special, moral responsibility to invest in returning these areas to decent standard of living.  Many of the pathologies that affect cities, like teenage pregnancy, addiction, violence and generations of grinding poverty, were enabled by policies that shredded the social compact in America’s cities – in the apt phrase of former Senator Daniel Patrick Moynihan, we “defined deviancy down.”

In our inner cities, and even in places like the rest of Maryland’s counties where the welfare rolls have dropped by more than three-quarters, the goal of self-sufficiency in the current law is not being met.  Without work supports such as childcare, transportation, food stamps, housing supports, and Medicaid, many people who are working, and working hard, would not be making it. 

No one with a family can be self-sufficient in a minimum wage job.  And many of those who still remain on the welfare roles are, in fact, only qualified to work in minimum wage jobs.  They are the hardest to help.  Many have multiple barriers to employment.   Many are high school dropouts with no GEDs.  Many are non-English speaking.   Many often have multiple problems like substance abuse and mental illness.  Many are severely learning-disabled.  And many have no work history. 

If you were an employer, would you hire them without the assurance that they have had significant skills training?  TANF should:

• Provide funding for transitional community service jobs.  One possible means to accomplish this is through a federal/local partnership funding entry-level jobs in cities to improve the quality of life in troubled neighborhoods – a double benefit, providing local employment and enhanced local services, like sanitation and community development.

• Help low-income fathers find jobs by extending access to TANF employment services.

• Eliminate provisions that bar two-parent families from participating. 

Additionally, we should expand the earned income tax credit and eliminate the existing marriage penalty in the effective program.

Accountability

Given the great need to invest in training and addressing other critical needs for those Americans who remain on our welfare rolls five years after the beginning of reform, it is encouraging that there is broad consensus to preserve TANF funding at its current level.  The President is providing strong leadership in this regard.

But there must be greater accountability for how this funding is spent.  Sadly, far too many states are using TANF funds to supplant state funds in their budgets.  We support some level of flexibility to ensure that the wide range of issues we face can be met, but stricter controls must be put in place to remind governors that the Congress appropriated these funds for families facing hard times, not politicians facing hard choices.

Let me use the example of my own state to illustrate what I mean:

• As of last year, since the passage of the 1996 welfare reform legislation, 150,589 clients left the welfare rolls. There were 77,298 welfare recipients in Maryland compared to 227,887 in 1995.

• This caseload reduction has resulted in $530 million in welfare reform savings in State and federal funds, which once solely made payments to Maryland's families in need.  Half – or $265 million – of these savings are federal Temporary Assistance For Needy Families (TANF) funds, provided specifically to aid needy families.
• Of this $530 million in savings, $200 million has been reinvested in breaking the cycle of poverty and dependence by providing employment opportunities, supporting local welfare-to-work efforts and subsidizing child care for working mothers.

• $90 million was shifted to a "dedicated purpose fund" in the event of an economic downturn.  This year, most of this rainy day fund was raided to plug a gap in the State general fund – to dodge difficult budget choices, not to help struggling families.  There is about $11 million left.

• However, $210 million – or 40% – of these funds have been diverted entirely from the mission of welfare reform: supporting poor families and helping them become self-sufficient.

• The Governor substituted welfare savings to make Foster Care Payments, and to fund Child Welfare Services and other DHR programs.  While these are TANF eligible programs, they always have been funded in addition to not instead of welfare-to-work programs.  By diverting welfare savings from their intended purpose, the State is able to shift $210 million in State General Funds, formerly used for foster care and child welfare, into purposes unrelated to helping poor families.

• As a result – despite $530 million in savings that could and should be dedicated to helping poor families – we are spending much less, not more, to support low-income families in their efforts to become self-sufficient.

• Much of the $210 million that has been diverted from welfare reform is being spent in large part on construction projects around the state.  And the dividend from welfare reform’s success is not being reinvested in the human capital that remains.

I know that Maryland is not alone in these budgetary shenanigans.  Very simply, the TANF funds that the Congress has appropriated are not being spent in the manner the Congress intended.  And they are badly needed for that purpose – providing opportunity and increasing self-sufficiency.  If nothing else is changed from the 1996 law, please clamp down on this abuse.

One possible solution, given the increasing concentration of welfare recipients in America’s cities, is to provide TANF funding directly to cities.  Send the resources to where they are needed and hold us accountable for getting people to work. 

Outcomes

Finally, our calls for compassion can’t be an excuse not to demand results.  Mayors are as guilty of this offense as anyone, but it extends to all levels of government.  Adlai Stephenson once said, “Bad administration will kill good policy every time.”  It’s not enough to say you care, you have to prove it through your actions. 

Just as accountability must be increased for state governments concerning how TANF dollars are spent, we support increasing accountability for local government.  What gets measured gets done.  We must remain focused on results. 

Given the importance and difficulty of what we are trying to accomplish, it is unconscionable that we do not better track outcomes – outcomes like employment, rising income levels, and each generation improving on their parent’s life. This is the American Dream, yet it does not seem available for children growing up in neighborhoods where poverty is an expectation and upward mobility virtually unknown.

In Baltimore, every other week, we are tracking indicators ranging from social services, to job training and placement, to clients served at our one-stop centers.  We’re not yet where we need to be.  I don’t know that anyone is. 

Traditionally, human services agencies have been reluctant to measure outcomes because the work they do is so difficult.  But we must take responsibility for helping people change their circumstance.  The only way I know is to relentlessly track results and manage based on quality information.  Jack Maple, the inventor of Comstat once told me that everything can be statted.

I don’t have all the answers, but I do know if we are not wed to what has failed in the past, and we are not afraid of what real information might tell us, we can do a better job for the people we serve.

To do so:

• We must end supplanting at the state level. 

• We must continue providing flexibility for state – and additionally local – governments to serve the people they know best.

• We must think creatively about how we get people into jobs, and how we engage the private sector – whether with subsidies or training.

• We must help people get past that first entry-level job. 

• And we can’t forget fathers.

Thank you for allowing me to testify here today.  This is critical to America’s cities.  I will be glad to answer any questions.