Opening Statement of Hon. Wally Herger, M.C., California, and
Chairman Subcommittee on Human Resources

Hearing on "Rainy Day" and Other Special TANF Funds

April 26, 2001

Good morning, and welcome to today's hearing on "rainy day" and other special welfare funding issues. Today we will hear about several related matters requiring our attention this year and next as we consider the future of the 1996 welfare reforms.

Two provisions in the 1996 law will expire at the end of the current fiscal year - the Federal contingency grant fund and supplemental grants to fast-growing or relatively poor states. These programs are part of today's agenda. But they really point us towards larger issues and questions:

• How should our nation's cash welfare program be funded as we go forward? and

• What signals and incentives should Washington give on spending or saving TANF funds?

The latter question is one I want to explore in depth today. So I have encouraged witnesses to do some deep thinking on ways to encourage States to save more for rainy days. Fortunately, as we will hear, many are doing just that, aided by the more than 50 percent national caseload decline and fixed block grant funding. What a change this is. Under the former AFDC system, spending rose in good times and bad. In fact, the very idea of saving cash welfare funds for a rainy day was almost unimaginable.

Still, there are complications. This Committee fought back attempts to cut the TANF block grant when others saw welfare "surpluses" as inviting targets for budget cuts. We won that fight. So now both sides have upheld their end of the 1996 deal, when we traded fixed Federal funding for more responsibility to produce results.

What remains is to find ways to help States save more of their block grants, while insulating such savings from Washington budget cutters. That would leave States better able to assist needy families in the event of tough times, and it should help protect taxpayers' interests in the long run, too. So I am eager to hear the testimony of all of our witnesses on these important issues.