Committee on Ways and Means, Subcommittee on Human Resources, 4-3-01 Testimony

Statement of Rodney J. Carroll, President and Chief Executive Officer,
Welfare to Work Partnership

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

Hearing on Welfare Reform and Work

April 3, 2001

"We cannot be the kind of country we want to be if we're content to leave people behind… We have the knowledge. We have the resources… What we need now is commitment. We're asking every company across the country to join our Partnership."

- Gerald Greenwald, Chairman Emeritus, United Airlines
Chairman, The Welfare to Work Partnership

"Welfare to work is the perfect example of how two supposedly diametrically opposed goals of business - making money and being socially responsible - can intersect in a meaningful way."

- Jonathan Tisch, President and CEO, Loews Hotels
Vice Chairman, The Welfare to Work Partnership

Good afternoon Congressman Herger and members of the Human Resources subcommittee. I thank you all for inviting me to testify about the business perspective on welfare reform and the reauthorization of the Temporary Aid to Needy Families program.

It is a rare moment when a vexing social problem and a compelling business need align to create positive change. Such an opportunity presented itself in 1996, when this subcommittee wrote and the full Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act, reversing six decades of welfare policy. The new law created a historic challenge for the business community to hire those who would be leaving the welfare rolls in large numbers. And, fortuitously, it created an unprecedented chance for employers to fill their payrolls with new workers, just as a booming economy was making that job more difficult than ever.

As you well know, welfare caseloads have plummeted by half since 1996, and the majority of adults who are now off the welfare rolls have gone to work. In May of 1997, The Welfare to Work Partnership was created by five corporations - United Airlines, Burger King, Monsanto, Sprint, and UPS - to educate and encourage other employers to consider hiring this new pool of workers. More than 20,000 employers have answered our challenge and committed to hire and retain former welfare recipients. In fact, we can now estimate that these companies have hired 1.1 million new workers from the public assistance rolls - mainly for good, full-time jobs offering full medical benefits. We are pleased to be at the forefront of this quiet social revolution.

The Partnership takes great pride in the progress our employers have made. Still, we are quick to acknowledge that the job of ending a failed welfare system is far from complete. Important challenges lie ahead. More than two million families remain dependent on the federal Temporary Assistance for Needy Families (TANF) program and, as employers, we are well aware that many of them face the most difficult barriers on their road to work. We also know that too many individuals who have left the rolls eventually return. Perhaps the most daunting challenge, however, is in supporting large numbers of our fellow Americans who have "done right" by their families and worked hard to leave welfare, only to find themselves struggling to make ends meet. As a nation, we owe these individuals more; together, we can do more to help them achieve lasting independence.

To move the agenda forward in pursuit of that goal, we offer a series of policy recommendations to you and your colleagues in Congress. The Partnership and our Business Partners believe that only by working together - with neither partisan nor ideological differences - can we complete the ambitious agenda of welfare reform. Our recommendations include the following:

Reauthorize the 1996 welfare law and hold the line on funding to assist those still in need. When Congress revisits the 1996 law, it should not reduce TANF block grant funding despite large declines in welfare cases. The nation's investment should be sustained to help states tackle the difficult barriers faced by the "hardest to serve" recipients remaining on the rolls and those who have already left. States, for their part, should move expeditiously to spend their TANF allocations on services most vital to welfare recipients and to all low-wage workers. Any effort by states to use TANF money for other purposes should be strongly discouraged.

Do more to prepare welfare recipients for long-term success before their first day of work. Lawmakers should also find a better balance between the strict "work first" philosophy at the core of the 1996 law and more intensive efforts to prepare welfare recipients for reliable and better-paying jobs. While The Partnership's companies believe most recipients should be required to work and are eager to employ these new workers, many have come to see the practical limitations of a program that, in some cases, pushes recipients into jobs before they are prepared to succeed in them.

Help us address the biggest obstacles to work - child care and transportation - and to maximize small business involvement in welfare to work. Lawmakers should sustain or, ideally, increase resources for a range of programs that help former welfare recipients stay on the job. Partnership companies call for increased emphasis on child care and transportation aid, as they are consistently the two biggest challenges facing new workers. We also ask for help by government bodies and other employers to ensure that small businesses - the engine of job growth in America - can successfully hire disadvantaged workers.

Relax strict time limits on welfare for people working at least part time. Congress should seriously consider changing the 1996 law to "stop the clock" on welfare benefits for individuals who are working but earning so little money that they continue to receive a partial wage supplement. In a recent survey, nearly two thirds of Partnership employers supported such a proposal.

Do more to "make work pay" for employees leaving the welfare rolls. Congress, state and local lawmakers, and service providers must maximize a range of supports that help former recipients keep their jobs and leave welfare behind for good. Partnership companies call on Congress to increase the Earned Income Tax Credit for low-wage workers, and on states to enact such refundable credits of their own. We also urge stakeholders to aggressively promote valuable work supports like Medicaid, the Children's Health Insurance Program and food stamps for all families who need extra support on the road to permanent self-sufficiency.

These recommendations and others are included in a report we issued this past summer called The Bottom Line for Better Lives. In this document, The Partnership and its business leaders share other recommendations with those in a position to affect change, including strategies to streamline the workforce and training systems, to reach out to the fathers of children on welfare, and to build on the progress to date with efforts to assist millions of other disadvantaged Americans in need of decent jobs.

A few years ago, welfare to work was little more than a slogan. Today it is a reality across America. Companies have proven that welfare to work is as good for their business as it is for the community. And welfare recipients have proven that, when given a chance and the right employment-related supports, they can make the successful transition from welfare to work.

We are happy to report that businesses will remain engaged in the welfare to work effort despite recent concerns about an economic slowdown. In fact, nearly three quarters of Partnership companies report continued difficulty finding reliable, entry-level employees and most intend to hire welfare recipients in the coming year. In the process of building their business with dedicated and reliable workers, these companies will help hundreds of thousands of Americans begin the transition from dependence to independence. These new workers, in turn, will gain valuable skills and experience they never had before. Welfare to work has helped - and will continue to help - countless Americans be productive citizens, provide for their families, and be role models for their children.

There are two unanticipated benefits of the welfare to work initiative. First, it has generated deep support in the American business community. Second, it has increased the likelihood that the lessons we have learned in moving welfare recipients toward productive lives can be applied to many other groups of citizens - like ex-offenders, non-custodial parents and people with disabilities - who have lived too long in the shadows of the American dream. With the help of wise policy makers and committed service providers, we can open the doors of opportunity to millions more of our fellow citizens.

Mr. Chairman and other members of the subcommittee, I thank you for your time today, and would be happy to answer any questions.

For a full copy of The Bottom Line for Better Lives, please visit The Partnership's Web site at www.welfaretowork.org and click on "What's New."