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Davis Opening Statement: Hearing on Improving Work and Other Welfare Reform Goals

September 08, 2011

Today we will review ideas for reauthorizing the Temporary Assistance for Needy Families (TANF) program. 

Since it replaced the New Deal-era AFDC program in 1996, TANF has been successful at cutting welfare caseloads by 57 percent through last year. Even more importantly, by promoting work among single parents who are the most common welfare recipients, it has helped reduce child poverty in female-headed families by 10 percent, even with the deep recession.

But despite such progress, TANF can and should be strengthened to help more low-income families support themselves in the years ahead. Unfortunately, the Administration has called for only a straight one-year extension of current law, which expires at the end of September 2011. Given that position, it seems unlikely that significant changes to TANF will happen this year. In fact, I expect the House will consider a straight, short-term extension of TANF later this month.  But today’s hearing will let us start to focus on key problems that a straight extension would leave unfixed, and help us chart a path toward fixing those issues in the coming year. 

Key concerns involve the fact that not enough adults on welfare are working or preparing for work today. For example, according to recently-released data from the Department of Health and Human Services, in FY 2009 only about 2 in 10 families on welfare included an adult who met a welfare to work requirement.  The reasons are complicated, including because a rising number of welfare payments do not include an adult benefit, called “child-only” payments.  But as the testimony of the nonpartisan Government Accountability Office discusses, many States are also using an obscure accounting technique known as “excess MOE credits” to weaken work requirements and avoid engaging adults in work or training as they should. Instead of the State helping more adults prepare for and begin work, they scour their books to uncover more spending they can credit to the TANF program and thereby reduce the number of people they have to engage in work activities.  This compounds underlying concerns that too few current recipients are actually engaging in constructive activities to prepare for work and life off of welfare. And that does a disservice to all poor families who want and need help to become self-reliant.

Other concerns involve outright abuse of taxpayer trust, such as when adults on welfare spend taxpayer funds on liquor, gambling, tattoos, or even visits to strip clubs. As recent exposés have revealed, too many welfare recipients have accessed taxpayer funds at cash machines in casinos, liquor stores, strip clubs and even on cruise ships. Some States, including California, have already taken action to plug this so-called “strip club loophole.”  Senators Hatch and Baucus, our colleagues on the Senate Finance Committee, have proposed we do the same on the Federal level.   We should consider that as well.

A number of States have either enacted or are considering measures that try to ensure parents on welfare are not using drugs, which stand in the way of their getting off benefits and into work.  Our colleague Mr. Reed raised this issue at our last hearing, and it is one attracting a lot of attention. In a world where many employers require drug testing to ensure workers are clean and sober, neither taxpayers nor welfare recipients are helped if we have a lower standard for those collecting welfare benefits designed to help them enter work. 

Finally, in addition to work and personal responsibility, another key driver of welfare dependence involves family formation, especially whether children are raised in married, two-parent households in which they are the most likely to thrive and avoid poverty. In 2009, the poverty rate for married families with children was 8.3 percent, while the poverty rate for households headed by unmarried mothers was 45.3 percent, almost five and a half times as high. Yet current welfare rules create marriage penalties by expecting a greater share of married parents to be working, and for more hours. States have responded by in effect opting out of such requirements altogether. It’s time to ask whether the underlying rules should be reformed in favor of treating all families the same. This is one of several questions we should ask about how we can remove marriage penalties and encourage stronger families in the next round of reform.

We have an excellent panel of witnesses with us today to discuss these issues and more, and we look forward to all of their testimony.