Hearing on GAO Report on Duplication of Government Programs; Focus on Welfare and Related Programs
HEARING ON GAO REPORT ON DUPLICATION OF
GOVERNMENT PROGRAMS; FOCUS ON
WELFARE AND RELATED PROGRAMS
SUBCOMMITTEE ON HUMAN RESOURCES
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
April 5, 2011
Printed for the use of the Committee on Ways and Means
COMMITTEE ON WAYS AND MEANS
ADRIAN SMITH, Nebraska
LLOYD DOGGETT, Texas
JIM MCDERMOTT, Washington
JOHN LEWIS, Georgia
JOSEPH CROWLEY, New York
JON TRAUB, Staff Director
C O N T E N T S
WITNESSES Kay E. Brown, Director, Education, Workforce, and Income Security, U.S. Government Accountability Office
LaDonna Pavetti, Vice President for Family Income Support Policy, Center on Budget and Policy Priorities
Robert Rector, Senior Research Fellow, Domestic Policy, The Heritage Foundation
GAO REPORT ON DUPLICATION OF GOVERNMENT PROGRAMS;
FOCUS ON WELFARE AND RELATED PROGRAMS
Tuesday, April 5, 2011
U.S. House of Representatives,
Committee on Ways and Means,
The subcommittee met, pursuant to call, at 2:00 p.m., in Room B‑318, Rayburn House Office Building, Hon. Geoff Davis [chairman of the subcommittee] presiding.
[The advisory of the hearing follows:]
We have three purposes in today’s hearing: first, to learn about duplication in programs serving low income children and families; second, to ask whether, given that duplication, current programs are spending taxpayer money wisely; and, third, to consider how we can better or what we can do better to help more of our neighbors in need become self‑reliant.
The most recent data on program duplication came in a well publicized report GAO released in March, which found literally dozens of programs with similar or overlapping objectives and services provided. The report noted that by fixing this problem, “The Federal Government could potentially save billions of dollars annually and help agencies provide more efficient and effective services.”
Another GAO report released in January focused on a subset of the larger overall problem: how the Federal Government spends $18 billion on education and training programs across 47 different initiatives in nine different Federal agencies. Of these programs, GAO found that only one in ten had even been evaluated for effectiveness in the last seven years, and almost all of them overlapped with one or more programs.
Since one of the programs in question is the Temporary Assistance for Needy Families program under our jurisdiction and that program needs to be reauthorized this year, we should all take note of those facts.
Unfortunately, the redundancy does not stop there. Depending on how you count, the Ways and Means Committee oversees no less than six income support programs, four child care programs, and nine child welfare programs. That includes both spending and tax programs, which have mushroomed in number and expense in recent years.
One example of that duplication and overlap involves the Social Services block grant program, which provides $1.7 billion each year to States. This program has no eligibility criteria and requires no matching funds from States. States use almost a third of this money for services provided by other programs, such as foster care and child care.
While States rightly desire flexibility to meet the needs of the people they serve, common sense suggests that the Federal Government should not operate multiple programs serving the same purchase, each with different eligibility, reporting, and accounting requirements. Such duplication can create a complex labyrinth that States implementing programs, but more importantly, real people in need of help, are forced to navigate.
And helping those in need is the real point of this, after all. As President Obama stated in his Inaugural Address, “The question we ask today is not whether our government is too big or too small, but whether it works. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end.”
Our goal today is to review how current programs in our jurisdiction work and how they can be made to work better. In the current fiscal climate, it is especially important to understand where duplication exists, how we minimize that duplication and achieve savings, and ultimately how we can provide better services in a more timely manner to those in need.
We look forward to all of our testimony on those points, and without objection, each member will have the opportunity to submit a written statement and have it included in the report at this point.
Mr. Doggett, do you care to make an opening statement?
*Mr. Doggett. Yes, Mr. Chairman. Thank you.
I agree with you regarding the need to find effective answers to each of the three important questions that you pose for this hearing and stand ready to work with you on proposals to make programs more effective and efficient so we can maximize the impact of every taxpayer dollar in advancing some critical objectives, such as helping those unemployed through no fault of their own prepare and find work.
I do, however, vigorously oppose efforts to use terms such as “efficiency” and “streamlining” as an excuse to eliminate help to people that need it most. It is noteworthy that of the 34 areas that the Government Accountability Office included in its recent report reviewing overlap, duplication and fragmentation, only one of the 34 mentions a program within this subcommittee’s jurisdiction, the appropriate focus of today’s hearings.
As to that area, employment and job training services under TANF, the GAO suggestion about merging offices sounds to me to be constructive, and I look forward to hearing more about it. Providing a more unified administrative structure could potentially make it easier for clients to access services.
One initiative that might help the states move more forcefully in that direction is the President’s Partnership Fund for Program Integrity that we have discussed before at a prior hearing. GAO focused on a number of areas within the jurisdiction of the Ways and Means Committee. One of the most important of those is better oversight of our tax revenue. Notably, GAO reiterated its longstanding recommendation that tax expenditures should be subject to increased scrutiny to help identify ineffective and redundant spending through the tax code.
I strongly agree with that recommendation and the need to take a look at corporate tax loopholes, such as those that allow General Electric to avoid paying its fair share for our national security.
In addition, there are several recommendations on tax compliance to close the $300 billion tax gap, including recommendations to stop tax shelters and abusive transactions, and outside the jurisdiction of the Ways and Means Committee, of course, some of the biggest savings were to be achieved at the Pentagon. GAO identifies six more areas, six areas out there where significant savings from program duplication can be achieved, and I hope progress can be made there.
As we look at potential duplication within our subcommittee’s jurisdiction, it is important to recognize that often multiple programs, sometimes providing similar services, exist because the level of need far exceeded the limitations of the original program. For example, the Workforce Investment Act was meant to be the focal point for providing job training services to the unemployed and under employed, but WIA only provides training to fewer than 300,000 workers across the whole country each year.
Since we have over 13 million unemployed looking for work, it is no surprise that other programs, including TANF, have become sources of vocational training. Unfortunately, the mindless cutting of a number of these programs under H.R. 1 that we have under consideration this year would result in the closure of two‑thirds of the employment centers in my home State of Texas and raise other concerns across the country.
I hope we will avoid that path as we seek legitimate ways to achieve efficiency and effective use of taxpayer dollars that meet the legitimate needs of many struggling Americans.
And I thank you, Mr. Chairman.
*Chairman Davis. Thank you, Mr. Doggett.
Before we move on to our testimony, I would like to remind the witnesses to limit their oral statements to five minutes. However, without objection, all of the written testimony will be made part of the permanent record.
Our distinguished panel this afternoon, we will be hearing from Kay Brown, Director of Education, Workforce, and Income Security at the U.S. Government Accountability Office; Dr. LaDonna Pavetti, Vice President of Family Income Support Policy, Center on Budget and Policy Priorities; and Robert Rector, Senior Research Fellow, Domestic Policy, The Heritage Foundation.
Ms. Brown, please proceed with your testimony.
STATEMENT OF KAY E. BROWN, DIRECTOR, EDUCATION, WORKFORCE, AND INCOME SECURITY, U.S. GOVERNMENT ACCOUNTING OFFICE
*Ms. Brown. Chairman Davis, Ranking Member Doggett, and members of the subcommittee, I am pleased to be here today to discuss our work on some of the Nation’s key programs, those that help low income families, vulnerable children and others in need.
While they are essential, our work has shown that the multiplicity of different programs involved may be inefficient and unnecessarily costly. Given concerns about fragmentation, duplication and overlap in government programs today, I will discuss three points: key characteristics of these programs; problems in administering them; and actions to address these problems.
First, on the programs, multiple programs and tax credits under your jurisdiction provide income support, child care and child welfare services to individuals and families in need. Additional programs help meet needs in other areas, such as housing and nutrition, and are under the jurisdiction of other committees.
Some of these programs are funded by block grants that allow States flexibility in how they allocate the funds, while others are targeted to specific populations. In some cases, the programs are designed to service everyone who is eligible, while in others the funding is capped. Several require States to provide matching funds.
Moving on to problems in administering these program, first, they are fragmented. That is, they serve some of the same broad areas of need, but are administered by at least six different Federal agencies.
Further, services are provided by numerous State and local agencies, as well as for profit and nonprofit organizations. In fact, this patchwork of programs is too fragmented and overly complex for clients to navigate, for program operators to administer efficiently, and for program managers and policy makers to assess program performance.
For example, low income families often receive aid from several programs, such as TANF, Child Care and Nutrition Assistance. However, the complexity and variation in eligibility rules and other requirements among these programs contribute to time consuming and duplicative administrative processes, complicate the work of case workers, and contribute to errors.
Also, information gaps can hinder program oversight. For example, our work on the TANF Program has shown that work participation rates, the key performance measure for the program, do not appear to be achieving their intended purpose.
Further, although States have shifted a large share of TANF funds from cash assistance to other supports, such as child care subsidies and child welfare, not enough is known about how these funds are used.
Moving on to what actions can help address these issues, first, simplifying policies and processes could save resources, improve productivity, and help insure the accuracy of benefits. However, when making this type of change, it is important to think about the effect on program benefits. That is, will more or fewer people be eligible with the changes?
Consolidating programs can also help ease Federal rules and requirements and save some administrative costs. However, in this case, care must be taken to insure that intended target groups can still receive benefits.
Facilitating technology enhancements, such as data sharing across programs can streamline eligibility processes and help identify fraud.
And, lastly, fostering innovation and evaluation by States and localities can help the Federal Government determine which strategies are most effective without investing time and resources in unproven strategies.
In conclusion, because these programs have evolved over time to meet various needs, it is not surprising to see some fragmentation of administration, overlap in populations served, and duplication of services offered. Some of these features may, indeed, be warranted, for example, to insure that certain populations are served. However, our work indicates that further exploration of the extent of fragmentation, overlap and duplication could help better identify ways to streamline and improve services and programs.
This concludes my statement. I am happy to respond to any questions.
[The statement of Ms. Brown follows:]
*Chairman Davis. Thank you very much, Ms. Brown. Dr. Pavetti, if you could give your testimony.
STATEMENT OF LaDONNA PAVETTI, VICE PRESIDENT FOR FAMILY INCOME SUPPORT POLICY, CENTER ON BUDGET AND POLICY PRIORITIES
*Ms. Pavetti. Thank you. Thank you for inviting me to testify today.
I have spent my entire professional career assessing the implementation of user programs for low income Americans. Since the passage of welfare reform, I have visited hundreds of local welfare offices and job training programs and I have had the privilege in doing that of talking with many program participants and observing them as they participate in activities that are designed to help them find and sustain employment.
During my work, I have had the opportunity to witness first hand the development of a safety net that really is aiming to help low income families realize their dreams of bringing home a steady paycheck and of supporting their families and creating a brighter future for their children. And what I would like to do in my testimony today is to share with you some of what I have learned over the years of doing that work.
First of all, when we focus on program duplication, we tend to think of program duplication as having a negative connotation to it, and something that if we remedied, it could save government money, but that is not always the case, and that is not the case when program funds are limited. right now States do not have sufficient funding to provide child care assistance to all low wage workers, and they do not have sufficient funds to adequately fund their child welfare programs, especially those programs that provide preventative services to at risk families.
Job training programs, which is one of the areas that is a particular interest of mine and where I have spent time because of my work on TANF, illustrates, I think, why duplication is not always what it seems on the surface. In their analysis, GAO identified 47 programs, many of which overlap in some way. But based on what I have seen in the field, it is not the case that individuals are receiving assistance from multiple employment and training programs. Rather, those programs exist to insure that people who face special employment needs actually have a greater chance of accessing programs and participating in programs that are designed to meet their specific needs.
So we have programs for ex offenders because they face special challenges. The same for TANF recipients, who often have serious barriers to entering the labor market. So by having specific programs, we increase the chance of them actually having success.
I also would like to give an example of what we have seen as being one of the most successful innovators in integrating programs, and that is Utah. Utah is a State that has one of the most integrated work‑based network of services, and it provides an example of both the opportunities and, I think, the limits of reducing program duplication.
Utah houses all of its safety net programs and its employment assistance programs under one agency, and that means that individuals coming in who are applying for unemployment insurance and individuals coming in to apply for TANF have access and come through the same process, and they also have access to roughly the same set of services.
They have made that system work by trying to adopt comparable standards sometimes higher than the standards that programs require, and regardless of what makes people eligible. And what they have done is they have taken funding streams and tried to use them for different groups of people.
However, that system has come at a price, and differences in program goals and performance standards have prevented the agency from implementing a fully unified system that provides services based on individual needs.
For example, their WIA performance standards focus on employment outcomes, while their TANF standards actually focus on participation in a set of narrowly defined program activities with no real regard for the employment outcomes.
TANF also requires much stricter verification requirements, and if they were to apply those to everyone who came through that door, it would cost much more than it costs them now.
I think that Utah also stands out in the amount of their TANF funds that they have used to fund their employment training activities. In 2009 they spent about a quarter of their Federal and State TANF funds on their program, and if we were going to get to that level for all of the states, we would have to more than double the investment that we are actually making.
I think there is a number of things that Congress can do to make it easier to do what Utah has done and to integrate a broad range of programs. One is to develop a common set of goals for programs that serve similar services. The other is to reduce those cross‑program barriers. Another is to increase the capacity of programs to serve people who have the greater barriers and to revamp the program performance measures so they are consistent across programs and so that programs have an easier time working together and trying to achieve the same thing.
I know these are difficult economic times, and there are real fiscal constraints facing our nation. However, we should not think we can solve our fiscal problems by decimating the safety net. Cutting funding deeply for programs to help low income Americans work, achieve self‑sufficiency and secure jobs that can support their families would not represent a step forward.
Some of the cuts that have been proposed would make it harder for low income Americans to work, while also making it less likely that people who need training would actually get it.
I think there would also be risks for the economy. What we have seen is that these programs have worked the way we intend them to work during the economic downturn — they have increased their reach to be able to provide that safety net, and I think we want to do that.
So one more statement. Rethinking programs is important, but I think we need to think broadly about what we are trying to achieve and how to best achieve that, and make sure that we really are thinking not only of low income programs, but across the board of how we can make things better for all Americans.
[The statement of Dr. Pavetti follows:]
*Chairman Davis. Thank you, Dr. Pavetti.
STATEMENT OF ROBERT RECTOR, SENIOR RESEARCH FELLOW, DOMESTIC POLICY, THE HERITAGE FOUNDATION
*Mr. Rector. I want to speak today about what I consider the greatest budgetary secret in the Nation and in Washington, which is the hidden means tested welfare state. Most people are completely unaware that the second largest category of Government spending across the nation happens to be spending on the poor. If you were to look in total, you find that the largest spending is, in fact, on Social Security and Medicare. The second largest is spending on more 69 different Federal programs to assist poor people, which with their mandatory State contributions now approach about $940 billion a year. That is the second largest overall category of Government spending in the country. It outstrips spending on public education. It vastly dwarfs spending on national defense, but people are largely unaware of this.
They are unaware of this because all discussions about spending on the poor basically take these 69 programs and talk about them one at a time. It is as if in talking about the defense budget you talked about marine logistics and then you talked about Air Force personnel, and you never put it together to look at the total amount that is being spent.
This chart shows inflation adjusted spending on the poor on these 69 different programs starting back in 1950 and through 2008. A lot of people, when they think about welfare, think it is like a roller coaster: you spend a certain amount, then you have a recession, spending goes up, at the end of the recession spending comes back down.
Sorry. I do not see spending every going back down. What happens in our system is that during a recession spending goes up. If we were to add the last two years on there, it is a 30 percent increase in spending, and at the end of the recession it never comes back down. What we do is increase spending slowly or increase spending rapidly. Spending never goes back down.
We are spending today 13 times as much after adjusting for inflation as when Lyndon Johnson launched the War on Poverty. About half of this spending goes to families with children, which is of particular concern to this committee. Another half of it goes to the indigent elderly and to the disabled. But that means that we are spending over $450 billion on low income families with children.
No one has any idea of this because you only examine one program at a time. You never add it up. Suppose we did the whole Federal budget like that. You simply spent on whatever seemed desirable, never added up the total amount of spending. That is what we do with the welfare state.
This next chart compares means tested welfare spending over the last 20 years compared to other categories, such as Social Security and medicare. The dark blue line is the increase in means tested welfare, which has grown by, I think, 300 percent over that period. This is, in fact, the fastest category of spending in the entire government for the last two decades, even before the current recession.
But if you were to talk to, for example, President Obama or anyone from the left, they would say that we have actually cut this spending. How do they possibly do that? They do that by focusing on one program at a time that may not increase as fast as inflation and ignoring the growth in the other 68 programs.
By that gimmick, we continue to have larger and larger spending, now approaching $1 trillion a year without the public or you as decision makers having any idea how much we are spending.
Now, most people see that over the last two years, President Obama has increased the spending by 30 percent in these 67 different programs. They say, “Well, of course. That makes sense because we have had a recession. We would expect the spending to go up.”
But when you look at Obama’s own budget projections for the next ten years, which are shown on the chart, combined Federal and State is on red in that chart and yellow is Federal only; this spending never goes back down. It goes up during the recession, and then it continues to climb. Within a few years, we will be spending $1 trillion a year at the same time that as a Nation we will be running deficits of roughly $1 trillion a year.
People talk about shredding the safety net. We should focus on the initial question. How did you expand the safety net by 50 percent and why isn’t it coming back down after the recession?
Now, I would propose that, in fact, the United States running deficits of close to $1 trillion a year simply cannot afford this level of spending. It will not benefit poor people in the United States if we put this country into bankruptcy, which is quite clearly where we are going now and where we are going under Obama’s proposed budgets, which projects $1 trillion a year deficits as far as the eye can see. That will not help the poor.
I propose that one of the ways that we can begin to bring the deficit down is to simply create some budget constraint in the amount that is being spent here. what I would‑‑
*Chairman Davis. Excuse me, Mr. Rector. Your time has expired.
*Mr. Rector. Okay.
[The statement of Mr. Rector follows:]
*Chairman Davis. I think we will have a chance to get into this a little bit more as we move to questions, which we are going to do now.
I will go ahead and open. First, for Ms. Brown, based on your March report and today’s testimony thus far, what can you tell us about the current number of welfare and related programs this subcommittee oversees, along with complementary tax credit programs?
Is the current number of such programs at an all time high?
*Ms. Brown. When we prepared the testimony for today, we looked at a selected number of programs under this committee, and we actually are considering right now what our next steps will be for the next round of our mandatory reporting next year, and as we do that, one of the things that we are considering is whether we should be looking at the full gamut of programs in this committee.
Because I know there are certain programs at HHS, I have not mentioned, such as Runaway and Homeless Youth and Tribal TANF and a lot of smaller programs that we did not include in our testimony today.
*Chairman Davis. Hopefully, we will be able to receive some more information on that was we continue on this dialogue.
How about spending on those programs? Have we ever spent more on those programs than in the past two years?
*Ms. Brown. Than in the past two years? We did not do a spending analysis, but I would assume that with the Recovery Act funds the spending was higher than it has been, and ‑‑
*Chairman Davis. So you would say we are spending higher. We are at the highest all time level now.
*Ms. Brown. I do not know where the spending level is now, after the end of the Recovery Act funding or the partial end.
*Chairman Davis. Okay, and finally, what do we know about current deficits? Have they ever been greater?
*Ms. Brown. GAO is on record as saying that we are very concerned about the deficit, and that we think there needs to be a serious effort to look at what changes need to be done in order to bring the deficit back in line.
*Chairman Davis. But would you say that this is an all time high?
*Ms. Brown. I am not the budget expert either at GAO. Sorry.
*Chairman Davis. Okay. Well, I think the numbers are fairly straightforward. We have some fairly substantial deficits.
Just in closing, Mr. Rector, would you care to comment specifically about welfare and related programs, their number and amounts spent and contributions to the deficit and debt?
*Mr. Rector. Well, I only look at major welfare programs which spend more than, say, $15 million a year. Those are at a record high. The level of spending after adjustment for inflation is also at a record high.
I would also comment that it was at a record high before the recession began, and again, the trick about this is if you look at that pattern of spending, when you have a recession, this aggregate spending tends to jump up by 20, 30, 40 percent, and then it never comes back down.
So we are now at a record high, but each year in the future, it is going to continue to go up. We cannot afford that level of spending. We are basically borrowing from the Chinese in order to spend $1 trillion a year on means tested welfare here.
*Chairman Davis. As we move forward in continuing discussions on reforms of the process and just looking at this from an engineering perspective in my professional background, I see so many of the challenges really have to do with not simply spending, but also the processes that do not communicate between the agencies and the lack of interlinkage. Integration done right could be a very powerful tool.
The challenge that we sometimes face in this is thinking that we will just keep pouring water into the swamp without actually addressing the issue of the obstacles that we face inside of that. I am hopeful that we can talk about integrated information systems, process improvements that would have a natural effect of removing redundancy as we continue the dialogue and working closely with my friend Mr. Doggett.
Would you like to inquire?
*Mr. Doggett. I certainly would.
Thank each of you for your testimony.
Mr. Rector, your testimony refers to 69 means tested programs. Would it be convenient for you this week to supply the committee with the specific identity you described? You categorize them in your written testimony, of those 69 programs?
*Mr. Rector. They are in the back of my testimony.
*Mr. Doggett. Oh, okay. I just did not look far enough.
*Mr. Rector. Okay.
*Mr. Doggett. And you do note in your written testimony that over half of this money spent in these programs relates to health care and over half of it is spending devoted to the disabled and the elderly.
*Mr. Rector. Yes.
*Mr. Doggett. Dr. Pavetti, looking at the initiative of the Republican Study Committee, they include, and I will check here in the back to see if they are included in Mr. Rector’s testimony, the Pell Grants, Head Start, among others. What will be the effect of the kind of reductions that the Republican Study Committee proposed in those programs on the folks that rely on them now?
*Ms. Pavetti. We estimate that you would see over $2 trillion in cuts for the low income people in six years from what is proposed, and they would have a disproportionate impact on elderly and disabled individuals, as well children who are the primary beneficiaries.
I think both what Mr. Rector presented and what is in the Republican Study Committee does something that I think we have never seen before, which is to apply the term “welfare” to programs that nobody really thinks of as welfare.
*Mr. Doggett. Yes. Now that I have made it to the appendix to his testimony, the largest one in education, over half of the education expenditures of which he complains is in Pell grants.
*Ms. Pavetti. Pell grants is one.
*Mr. Doggett. I do not think most students, most Americans view that student financial assistance so that someone can get all the education they are willing to work for as welfare.
*Ms. Pavetti. Right, and if you look at the income support ones, SSI is on there, and SSI is the way in which we provide assistance to people who go through a very lengthy process of demonstrating that they are disabled and not able to work and have not been able to enter the labor market.
So I think that, again, it lumps together a lot of things that I think have very different purposes, and I think rather than making clearer what we are spending, it actually muddies the waters and makes it harder to have a very informed discussion about what our priorities should be and how we want to try and help to make a difference in people’s lives.
*Mr. Doggett. As to the job training programs within this subcommittee’s jurisdiction, you referenced Utah as an example of how we can, and we have actually had some testimony previously from Utah in the subcommittee, but you reference them as an example of what we can do and what the limits of what we can do in eliminating duplication might be.
To the extent that there are continued challenges in Utah with developing common goals for these different programs, is that something that you think we should be addressing at the Federal level or is this a matter of the States needing to do a better job?
*Ms. Pavetti. Well, the States can do a better job, but there are also constraints that are Federal constraints, and within this committee’s jurisdiction is TANF, and that is up for reauthorization, and the TANF rules are incredibly restrictive, and they really do create huge constraints at the State level. So if those are not changed and if States are not given more flexibility to be able to make some changes so that they can be consistent with other programs, States really cannot come up with completely integrated systems and treat all people the same who come in their door based on their needs rather than whether they are eligible for one program or for another.
*Mr. Doggett. Do you have some specific recommendations that you might supplement your testimony to the committee for what we should be doing in the reauthorization of TANF to accomplish that objective?
*Ms. Pavetti. Sure, I can do that. I can definitely do that.
*Mr. Doggett. And, Ms. Brown, you mentioned that one of these areas for further study relates to not really being able to determine how the States are using their TANF money, and that is something we hopefully will get more information on this year, isn’t it?
*Ms. Brown. Correct. We are concerned about the fact that the one major performance measure for TANF is focused on work, and work activities, and that is perfectly appropriate, but the fact that the other uses for the funding for TANF are not tracked is a concern. We would like to know how those funds are being used.
It is important because they have increased significantly over time.
*Mr. Doggett. Thank you.
*Chairman Davis. Thank you very much. The gentleman’s time has expired.
*Mr. Paulsen. Thank you, Mr. Chairman, and also thanks for holding this hearing and for our witnesses for being here today.
Mr. Rector, maybe you can just comment real quickly, just to follow up on Dr. Pavetti’s statement, but would you clarify from your perspective? Is the definition of welfare that you use any different than the standard definition of welfare?
*Mr. Rector. No, it is pretty much the same. For example, right here, this document in my hand is the Congressional Research Service. “Cash and non‑cash benefits for persons with limited income.” It lists means tested welfare.
There is a 98.5 percent overlap between the programs that I have in my list and what are in this CRS report. This other book is the most common book written on welfare. You would find various versions of this book in every college library for the last 30 years. It is titled, “Programs in Aid of the Poor.” Every single program that is on my list is in this book. This is the standard text.
In fact, what she is talking about, which is what the center has done for 20 years, is any time you try to talk about massive total spending close to $1 trillion, they will pull out one or two programs and quibble. They used to pull out veterans programs that are about one percent of this total and try to obscure the issue by that.
The fact of the matter is 90 percent of this spending is cash, food, housing, medical care for low income people. Agreed, half of it does go to the elderly and disabled. Roughly the other half goes to families with children, but the bottom line is the public is totally unaware that we are spending virtually any of this money. People think we ended welfare aid to the poor back in the 1990s. When I tell them that we are spending close $1 trillion a year, everyone is simply astonished. We do not report it.
*Mr. Paulsen. Thank you.
And I know beyond the wasted funds that, you know, we are talking about with this hearing and all of the duplicative programs, and I cannot imagine how confusing it must be for families to have to navigate some of these programs that they are applying for, but, Ms. Brown, can you comment?
I think maybe one of the most discouraging parts of your testimony that you mentioned is when you stated that the need for improving the administration of these programs has actually been voiced recurrently for several decades, and you talked about some of the changes in, I guess, the 1996 welfare reforms and what States have been going through in terms of granting, using more flexibility in implementing new programs would need to be looked at, and simpler policies, better technologies are available.
Knowing that that is the case and there is more innovation out there, and as you have looked at the evaluation, what can this subcommittee do or what should we be doing to improve the way these programs operate or the way they are administered so that we can actually reduce these inefficiencies and save taxpayer money?
*Ms. Brown. I think regardless of how many programs you want to consider, the most important thing is to be clear on what we want these programs to achieve and who we want to be served and how we are going to measure that.
And to the extent that there are barriers that were discussed as far as different kinds of performance measures or constraints in sharing data, those are the kinds of things that you could help with.
*Mr. Paulsen. Okay. Mr. Rector, do you have any follow‑up to that in terms of measuring for this subcommittee to actually look at and dive into?
*Mr. Rector. Well, the bottom line is you really have to have some awareness of how much is being spent. when I look at these numbers, it clearly suggests to me that you are spending close to $30,000 for each low income family with children. I cannot imagine where that money goes, but if you just take the total amount that is going out the door, which is over 400 billion, divide it by any measure of low income households, you come up with this very, very large number.
We have to begin to understand this, and we do not understand it because effectively the entire discussion about the welfare state is as if you had a jigsaw puzzle with 69 pieces. You threw them all over the room, and then you have hearings about one piece at a time.
I have been doing this for 25 years. When you have that hearing, you pretend that that single piece, that single program is the only thing that affects low income people. In fact it would be very difficult to find a family that receives assistance from only one program. they receive assistance from a half a dozen, a dozen programs piled on top of each other, and we have no idea what they are getting. We have no idea of basically how much we are spending, and we are spending ourselves into bankruptcy here. We have to get this under control.
*Mr. Paulsen. Well, obviously, if we were starting a brand new Government from scratch, I mean, do any of you think that we would have 47 education and training programs, nine child welfare programs, four child care programs, and six income support programs if we established a Government or set it up?
I mean, given where we are, I guess we are trying the task now of what is the best path forward. Any thoughts on that? I cannot imagine that we would have all of these duplicative programs if we were starting from scratch.
*Ms. Pavetti. I think we probably would not have those if we were starting from scratch, but I think what I tried to say in my testimony, and I think it is important is part of why we have multiple programs is because of liited funding that is not sufficient to serve all those in need. Targeted programs are created so that people who do not get access, have a greater chance of being served.
*Chairman Davis. Thank you.
*Ms. Pavetti. If you had one program, you would have the issue of trying to make sure that there is equity in who gets access.
*Chairman Davis. The gentleman’s time has expired.
I think the gentleman raised a compelling question. Perhaps each of you would submit comments for the record.
Just from my own professional experience, oftentimes we will create a program around a program that is a work‑around to a systemic flaw, and our hope, and Mr. Doggett and I have talked about this before, is looking at ways to integrate rather than simply create more overhead in the long run.
The efficient use of taxpayer dollars is a very important and germane discussion that members care about on both sides.
With that, I would like to recognize Ms. Black from Tennessee.
*Mrs. Black. Thank you, Mr. Chairman.
And thank you, panel, for being here today.
I want to go to you, Mr. Rector, and your written comment and I think you also shared it with us verbally, is that since the beginning of the War on Poverty, spending on the poor has increased 13 fold after adjusting for inflation, and yet throughout the steady 40‑year climb in spending there is still this shrill claim that the poor are being slashed.
What I have seen in my nursing days over the last 40 years is that we have these programs, and I have worked with people in these program, and yet I do not see that the programs really are doing what we want them to do. If our goal is to get people out of poverty and move them on, it does not appear that these programs are working.
So we seem to be doing the same things over and over and over again, and you are not getting results.
What I would like each of the panelists to talk a little bit about is about the measurement. I think, Ms. Brown, you just mentioned it, about measuring, and there is one particular program for infant mortality back in the State of Tennessee that we adopted, and the thing that excited me so much about that is it actually is evidence based. It has measurements. It can show through metrics that it does work. It is worth the dollars that we are putting into the program
And yet when we looked at this program on infant mortality, we had like 37 different programs that were addressing infant mortality in our state, and none of them had metric tools to really say they were being effective.
And so what I would like to know is moving forward, as we look at these programs and we certainly see in all of these testimonies we have duplications of programs, what do you think we need to do in order to, first of all, put measurement tools on them and then to narrow them down so we can find best practices and find those that are really working where it will be value on our dollar?
*Mr. Rector. If I can take the first part of this question: how can you increase spending 13 fold and spend over $16 trillion and still have press reports and the President saying that you slashed spending?
You just saw an example of it here. Since 2007, aggregate means tested spending has been increased by 50 percent, but did you see that in the New York Times? Did you see that in the Washington Post? Did you see that on CBS News? No.
The spending went up 50 percent. Now, the Republican Study Committee bill simply says why don’t we take that spending, adjust it for inflation and bring it back down to where it was before the recession, and what was that? It is slashing the safety net.
So when spending goes up, it is invisible. It is off the screen. No one acknowledges it. We hide it in Washington. Then a few people try to say, hey, let’s take it back to where we were before the recession, oh, my gosh, kids will be dying.
You know, I have watched this for 20 years. It happens over and over again. When spending goes up, it is invisible. If you try to apply the slightest constraint, then you are victimizing the poor and slashing the safety net.
Basically what we are doing here is flim‑flamming the American taxpayer.
*Ms. Pavetti. Just on the measurement issue, I think we have made major progress measuring poverty in a way that actually captures what the safety net does. So if you look at Supplemental Nutrition Assistance, health care, those do not get counted in our standard poverty measure, and when they are counted you see that they have reduced poverty.
And in 2005, if you take a group of means tested programs, the EITC, SNAP, SSI and TANF, they kept 14 million people out of poverty and six million of those were kids. So if we did not have those programs, we would have much higher rates of poverty than we have now.
The other thing that is important, there are two other points that I think are important of what is going on. One is that because income inequality has increased and the labor market is very sluggish, low income programs have to work much harder to help people to stay above the poverty line. So part of it is a labor market issue.
The other is that health care costs across the economy, not only those that are targeted to the poor, are also increasing at faster rates than other programs, and that gets counted in what is going on in the overall spending.
*Mrs. Black. Doctor, in all of these programs that you have looked at over your years of investigating these, do all of these programs have measurement tools to say at the end of the day this is what we want to achieve and this is what is being achieved and when it is not being achieved, that we go back and revisit it and either get rid of it or bring in a better program that does work?
*Ms. Pavetti. They do not, but some of them do, and I would say it is a credit to welfare reform‑‑
*Mrs. Black. What percentage?
*Ms. Pavetti. Pardon?
*Mrs. Black. What percentage?
*Ms. Pavetti. I cannot tell you the percentage, but in welfare reform we invested a lot of money to identify what works best for whom, and so we need to, I think, continue to do that. And I think you are right. We do need to be able to do more measurement and to be able to make those choices about what works and what does not.
*Mrs. Black. I can only say that in the State of Tennessee, in the programs that we looked at on the health care and the family programs, very, very few of them actually had metrics tools, and they were around for a number of years where they never went way because somebody had a stake in them, and they did not want to get rid of them because they belonged to someone.
*Chairman Davis. Thank you very much. The gentlewoman’s time has expired.
*Mr. McDermott. Thank you, Mr. Chairman.
Program duplication is obviously a concern, but we know that only one out of four poor children in this country is covered. We have got 15 million kids in poverty. So there is a gap. There is not an overlap. It is a gap really that you are talking about here.
You have got 13 million people unemployed, and the Work Investment Program only covers 300,000 of the 13 million. So it is hard for me to know what in the world this hearing is all about. It really ought to be about the gaps in the safety net that we have.
I was interested in listening to you, and I was thinking. I saw on television on 60 Minutes a program about a couple. She was 40 years old and he is about 45, and they had two jobs and they were making about $70,000 between them and they lost that. They lost their jobs. And then they ran out of their unemployment insurance, and they lost their home, and they moved into their car with their three kids. So they are living in their car.
And then they got a little money. They found a little job and they got a little bit of money. So they moved up. The kids said it was a lot better now that we are living in a motel room, five people living in a motel room.
Now tell me what programs they are eligible for. These are middle class people making $75,000 a year and suddenly go to nothing. Their unemployment runs out. What do they have available to them to keep their family together and keep their kids from being hungry?
The kids talked about taking their bath in the morning in the Walmart bathroom. They were parked in the Walmart parking lot. So they went in to use the bathroom, right?
What is available to them? What is available to somebody in these programs?
*Ms. Pavetti. Well, in every state they would be eligible for food stamps.
*Mr. McDermott. Ah, food stamps. How much do they get in food stamps?
*Ms. Pavetti. It depends on their family size, but for a family of three, the maximum benefit is $526. The actual amount a family receives depends on their income and expenses.
*Mr. McDermott. Okay. So they would be eligible for $300 a month worth of food.
*Ms. Pavetti. And then depending on their circumstances and what State they are in, they may or may not be eligible for TANF benefits, and that in the median State is $429 for the month.
*Mr. McDermott. Depending on what State they’re in. You mean it is different from State to State?
*Ms. Pavetti. It is. It is very different from State to State.
*Mr. McDermott. You mean we allow the States to have different standards for people?
*Ms. Pavetti. Completely. In TANF, yes.
*Mr. McDermott. So you have got to be careful where you are poor is what you are saying.
*Ms. Pavetti. Yes, and what we saw in the recession was some States actually responded to the recession quite well and others did not respond at all, and their case loads actually went down.
*Mr. McDermott. Like Michigan that just reduced its unemployment benefits.
*Ms. Pavetti. Right, and in Michigan, their TANF case load did not go up even though their unemployment rate was very high. Their case load did not respond much to the recession.
*Mr. McDermott. Now, I mean, we hear this testimony that all of these people are welfare cases, and I have never heard the elderly and the disabled called welfare cases before. That is a kind of pejorative term related to people who do not try, right?
*Ms. Pavetti. Right, and also Mr. Rector pointed to the books, but those say for the poor and not welfare. I think that term “welfare” is what is very misleading. It is often used as a very pejorative term for people who are not working and receiving public benefits, and I think that is the problem.
When you start talking about child care, which many people believe we should be providing to help people go to work, that we should be providing extra help to low income schools to help kids bridge the gap — those are not what people think about when they think about welfare programs, and that is what is included.
Yes, they are programs for the poor, but they are not what we think of as welfare.
*Mr. McDermott. If I can get one other question here, the inflated figure he uses, this huge number, God, it just blows your socks off. Is any of that health care?
*Ms. Pavetti. A huge portion of that is health care. In fact, not only is it health care, but one of the problems is that Medicaid is actually a very lean program, and what we have seen in Medicaid is that about a quarter of the beneficiaries incurs about two‑thirds of the cost because it includes elderly and disabled who have much higher Medicaid costs.
*Mr. McDermott. In Medicaid?
*Ms. Pavetti. In Medicaid, yes.
*Mr. McDermott. Okay. So the solution would be to get rid of the Medicaid program and just let people kind of go out and figure out whatever they can do, right? You could save a lot of money that way, right?
*Ms. Pavetti. Well, actually because Medicaid is a lean program, if you look at Medicaid per beneficiary cost in comparison to the private market, it actually is a lower cost. So if you put it into the private market, it would actually have increased costs, not lowered cost.
*Mr. McDermott. Thank you.
*Chairman Davis. Thank you. The gentleman’s time is expired.
I would like to recognize Mr. Berg from North Dakota.
*Mr. Berg. Thank you, Mr. Chairman. Thank you for being here to present.
I just enjoy some of this perspective. Certainly Representative Paulsen said, you know, if we are going to start over we would not start this way. You know, it is kind of interesting. You look at how did we get here. Well, we get here because of Government.
I mean, how do you get more money? You do not get more money by increasing a program. You get more money by having a new program, and so it mushrooms out and mushrooms out.
I mean, I am sitting here, and I looked at Mr. Rector’s chart, and I assumed it was a roller coaster, and I am sitting here just stunned that it is not, that it keeps going up, it keeps going up, it keeps going up.
I mean, I think our goal has been in North Dakota where we have three and a half percent unemployment; each State is different. There is on questions about it, and I think the ability to have a safety net that helps empower people, helps them be on their own is huge.
I think what has not been said is one of the biggest problems in this whole situation is if you have 69 different programs, think of the beneficiary. How do they maneuver from program to program to program? It seems to me that the benefit of having this more consolidated and uniform would prevent people from falling through the cracks and falling through the gaps.
So a couple of questions. One question is you had mentioned, Mr. Rector, about the $30,000 per family. When you just take the top line, here is the number.
*Mr. Rector. Right.
*Mr. Berg. And here are the people. Could you just restate that? Then, Doctor, I would like you to respond to that.
*Mr. Rector. Well, the bottom line is I have written a fairly long monograph about this. If you do not want to call this spending “welfare,” which liberals do not, okay. You can call it aid to the poor, but the fact to the matter is that we are spending about $940 billion on means tested aid, which are programs targeted toward poor and low income people. Basically any document would show.
And all of this discussion is usually one program at a time. We just heard Mr. McDermott say one out of four children are covered. Covered by what? It would be very difficult to find any poor child in the United States who is not covered by multiple programs. But if you look at one program at a time, you can always discover, oh, look. Somebody is not covered. It is just ridiculous.
But the bottom line is that roughly half of this spending, over $400 billion a year, clearly goes to families with children, say $450 billion a year. Now, there are only 44 million families with children in the whole United States. So if you gave every single family this money just in cash it would come to $10,000 a family.
Now, this spending is concentrated on the poor. So if you take this money and give it to the bottom third, the lowest income third of families with children, that is about 14 million families. Okay? You divide 450 million by that amount; you come up to something that is a very, very large number per family.
The problem is not so much duplication in my mind as the simple massive fragmentation of spending which makes it impossible for you as decision makers to even understand where this money is going. And I have been doing this for 30 years. I do not know where this money is going, but it is an amazing amount of money.
When it goes up, it is off the charts. If you try to bring it down, it is ‑‑
*Mr. Berg. Dr. Pavetti.
*Ms. Pavetti. I think that Mr. Rector does not provide enough detail to know what is included, what he includes when he talks about money going to children with families, but as I said, you know, if you think about what the amount of cash that is going to families, it is very low. The amount of food stamps is very low. So the amount of money that low income families actually have in their hands is actually quite small.
But I think that what gets counted is community development block grants. What gets counted is Title I money that goes to schools. So that is going to pay teacher. You are getting health care in there. That is going to pay doctors and hospitals. So a lot of that money is going to pay for services, and it is not actually going directly to poor people.
So I think it is a misleading number of what it actually means, and I think that if we had more detail we could have a better conversation about‑‑
*Mr. Berg. It is kind of a stark contrast to look at that big number and say what could you do if that were really focused on a family. It seems huge.
But I have another question. Earlier this week we had Dr. Lazera who was in, and he really talked about as the size of Government grows, it put a damper on the private sector, and really that is kind of what we are talking about here. How do we reverse that?
And really to cut to the quick, Mr. Rector, looking at this report, which programs would you recommend that we look into first in terms of consolidating?
*Mr. Rector. The first thing you need to do is just what a family would do. The way that you have been running the welfare system for 40 years is as if you are a supermarket and you go down the aisle and say, “Oh, that looks good and that looks good,” and you put it in the cart and you never add up the total amount of the cost in the cart.
Would you be spending too much money then? Of course you would. Suppose you ran the entire Federal budget that way. Just we identify this problem; we identify that problem; and we spend money. We never add it up.
You have got to get this total package under control or you will bankrupt the country. Just roll back this spending to where it was before the recession began.
*Chairman Davis. Thank you, Mr. Rector. The gentleman’s time has expired.
Mr. Boustany, you are recognized for five minutes.
*Mr. Boustany. Thank you, Mr. Chairman.
Dr. Pavetti, Mr. Rector has testified that we currently spend $940 billion on means tested programs. A simple question: is that amount enough?
*Ms. Pavetti. I think it goes back to what we were talking about. I think that is a question that needs to be answered by what are we trying to accomplish, and are we accomplishing it. So I think it is just the wrong way to start with that question. I think we want to ask what do we want to accomplish for our country for low income Americans to help them move up the economic ladder, and then think about are we spending money in the right ways, and where can we get better savings so that we can achieve our goals.
*Mr. Boustany. So I was thinking about this, and just listening to the discussion. You know we talk about defining poverty, and I was thinking about the distinction between poverty and being poor, and then the whole idea of dependency on these programs, which is what leads to the cost.
If we say, okay, we are going to put people of limited means on these programs to take them out of poverty, yet they are still dependent, we are still spending money and we are not helping them move up the ladder to get off of the rolls of the dependency.
Mrs. Black was talking about having the proper metrics in place, and so let’s have a little discussion about that. I am asking all of the panel this question. Should we take each of these programs and devise metrics with an eye toward designing the program to get people off these programs? Is that what we should be doing?
I would like all of you to comment on that.
*Ms. Pavetti. I think that we need to think about what has happened in recent years. Our safety net is very different now than it was before, and we have much of our safety net that is really going to support low income working families because they cannot make enough to be able to meet their basic needs.
So what happened with welfare reform is that we saw the case loads decline and people move into the labor market, and the belief was that if people got on the first rung of the ladder they would move up, and that has not been born out. there has been lots of research.
*Mr. Boustany. Mr. Rector, could you comment on that?
*Mr. Rector. Sure. I would like to quote from my favorite welfare expert, President Lyndon Johnson. When Lyndon Johnson launched the War on Poverty back in 1964, he said (and we spent over $16 trillion on this, four times the amount we spent on all other wars in U.S. history after adjusting for inflation), he wanted a War on Poverty that would strike at “the causes, not just the consequences of poverty.” He said, “Our aim is not only to relieve the symptoms of poverty but to, above all, prevent it.”
I was just looking at the 1964 President’s economic report where they said, you know, we could just take $25 billion and give it to the poor people and eliminate poverty, but that would be wrong. We do not want to do that. What we want to do is make the poor prosperous and self‑sufficient.
Now, I would say we put $16 trillion into the War on Poverty, and everything is dramatically worse today than it was when we started out. The poor have less capacity for self‑support than they ever have primarily because the poor do not work very much, even in good economic times. Able bodied heads of households work very little. Moreover, when Lyndon Johnson launched this War on Poverty, six percent of children were born outside of marriage. Today that number is 42 percent. About 75 percent of the welfare assistance for families with children is going to single mothers. The welfare system has enabled that decline of the family. The family’s capacity for self‑support has plummeted, and the taxpayer is stuck with the tab.
*Mr. Boustany. So you mentioned a couple of the factors that cause an increase in dependence and poverty. Are there others? Could you mention some others? Those are the big ones, obviously.
*Mr. Rector. Those are the two biggest ones. The two major reasons that families are poor and on welfare are low levels of parental work and the high levels of single parenthood primarily among poorly educated mothers.
A third problem is immigration. We basically have imported vast numbers of poor people from abroad. We have about ten million immigrants in this country who do not have a high school degree. About 15 to 20 percent of total welfare spending goes to those individuals.
If you bring people in from abroad who are high school dropouts, guess what. They cost a fortune. Those families cost about $10,000 a year in means tested welfare through their entire lives. Overall, they get about $30,000 a year in Government benefits, pay maybe eight, $10,000 in taxes. Every one of those families’ is a net cost of $20,000 a year.
If you keep importing people who cannot support themselves, both poverty and welfare have to go up.
*Chairman Davis. Thank you. The gentleman’s time has expired.
*Mr. Crowley. My grandfather came here without a high school diploma. So did all of my grandmothers.
*Mr. Rector. Would you like me to comment?
*Mr. Crowley. I am not asking you a question, sir, and the point I am making is that but for them coming to this country and working hard, I would not be a member of Congress today.
So I do not like the way in which people are being broadly disparaged based upon their immigration status in this country.
But thank you, Mr. Chairman, for holding this hearing today, and while I appreciate your focus on reducing unnecessary duplication and waste, I think we need to take a careful look at what we consider unnecessary duplication. I am concerned that some of the proposals we have heard would consider any programs that help families to be unnecessary duplicates, even if they are as widely different as heating assistance and job training.
It is not unnecessary to help American families; in fact, very necessary that we help American families, especially during these very difficult times.
Dr. Pavetti, we have heard a lot about increases in what some call welfare spending, and you have spoken about the Republicans’ Welfare Act of 2011. This legislation would take a variety of Federal programs that provide benefit especially to low and middle income Americans and combine them into one program and cap funding for that program.
Is it correct that this bill includes Pell grants as so‑called welfare spending?
*Ms. Pavetti. Yes, it does.
*Mr. Crowley. Pell grants, as you know, provide a critical financial aid to students attending college. In many cases, they are the primary piece of the financial aid package that makes it possible for students in lower income and middle income families to attend college, to help make college affordable, especially private college, more affordable, not affordable, more affordable.
Sacrifice goes into that; working on the side to support a family and to also pursue your dreams. At a time when it became more difficult for families to afford a college education for their children, Democrats in Congress raised the amount of Pell grants and insured that more students can benefit from this assistance. So over 22,000 students in my district have been benefitted from Pell grants, and I think most of them would be shocked to see this counted as welfare, particularly since by going to college, they are working towards a better future where they hope to be self‑sufficient.
We have even seen new data from the Department of Education that says Pell grant recipients are more likely to stay in school and complete their college education than their non‑Pell receiving counterparts. I would even wonder how many of my colleagues on the other side of the aisle used Pell grants to make college affordable for themselves or for their families.
Maybe that is something for the Fourth Estate to investigate or to ask.
In your experience though, Doctor, have you found that Pell grants and a college education help sustain and allow students to improve their lives?
*Ms. Pavetti. Actually I have not done work on Pell grants, but I think one thing that is important is that one thing that we do know is that when people have the opportunity to get even short‑term training that prepares them for better jobs, they have a better trajectory which allows them to go into higher paying jobs, which means they become less dependent.
*Mr. Crowley. So would you suggest possibly that a lot of the talk about people in poverty being poor, wouldn’t a college education help lift these individuals out of poverty?
*Ms. Pavetti. Yes, it would.
*Mr. Crowley. Would you consider this excessive welfare spending that needs to be cut?
*Ms. Pavetti. No, not at all.
*Mr. Crowley. The Republicans’ proposal would combine the Pell grant program with other valuable but unrelated programs, such as Foster Care Assistance and Community Health Centers. Would you consider these programs to be duplicates or do they serve different goals?
*Ms. Pavetti. They serve very different goals.
*Mr. Crowley. Let me delve further into this issue of funding for each of these programs under the Republican proposal. Would funding for Pell grants likely increase or decrease under this proposal?
*Ms. Pavetti. They would be almost certain to decrease.
*Mr. Crowley. What about Community Health Care Centers?
*Ms. Pavetti. Same, they would almost certainly decrease.
*Mr. Crowley. Thank you, Doctor.
We are already seeing Republican plans to cut Pell grants in their budget resolution released today which would cut the annual Federal allocation for Pell grants by about half, reducing the amount of the grant for those who do receive it and deny the grant completely to many American families today.
It seems to me the Republican target is not duplicative program, but vital lifelines for millions of struggling American families today.
And with that I yield back the balance of my time.
*Chairman Davis. I thank the gentleman, and I just remind him that Pell grants and Community Health Centers are not in our jurisdiction, nor are they a primary focus of our hearing today.
*Mr. Crowley. I am sorry about that, Mr. Chairman.
*Chairman Davis. But they are a worthy point for discussion at another moment.
Having the last word and not the least today will be the gentleman from Nebraska, Mr. Smith.
*Mr. Smith. Thank you, Mr. Chairman, and our witnesses.
Dr. Pavetti, could you speak to how efficient the technology has been in terms of delivering some of the services? Have we been able to achieve any savings?
*Ms. Pavetti. You know, there are some States that have definitely achieved savings, and in my written testimony I have an example of Arizona that was facing increases in their case loads for public benefits because of the recession and they have lower staff available to do that because of budget cuts. And so what they did was to really re‑engineer their process to do much more efficient services.
The other thing, there are a number of States are really interested in trying to figure out how can they use technology better. How can they really avoid the duplication?
So there is a lot going on in States around this effort. The Ford Foundation has a major initiative. There are, I think, 27 States that applied to be part of that, to, again, try and really bring those programs together and make them much more efficient and particularly for working families, again, who really do not often make enough to make ends meet and need those supports to be able to continue to work.
*Mr. Smith. And I speak as a former State legislator, that sometimes these Federal mandates that have occurred over the last several years have been met with some consternation at the State level or at, say, the retail level as well.
I mean, can you speak to how necessary it has been for the Federal Government to mandate or how that has been leveraged?
*Ms. Pavetti. I think sort of “mandate” is the wrong word. I think one of the things that we have learned over the years is that States do not really understand how much flexibility they have to coordinate programs. So I think there is a lot that can be accomplished by really trying to create an environment where that is promoted, and the Obama administration has done that.
We sat that particularly with the TANF Emergency Fund where they worked very hard to make sure the Department of Labor and the Department of Agriculture and HHS were working together to provide guidance. So they really did work together, and there are agencies that said they had never worked together before and that really did bring them together.
So I think there are things that they can do, and they need sort of some guidance on how to actually do that.
*Mr. Smith. Now I hear you saying that there might be some situations where or there are some situations where the request for assistance did not follow the same trend lines as the economy itself. Is that accurate?
*Ms. Pavetti. That is very true, and I can provide you with a paper we did that shows State by State where we look at what happened where States did have increases and people did have access to assistance and where they did not. So you do see this. It really is a 50‑State story, where some States, really their programs were very responsive, and there are other States that were not responsive at all.
*Mr. Smith. So is it fair to say that even in unprecedented times of economic growth there was still increasing requests for public assistance?
*Ms. Pavetti. There was not. In fact, what you see is that the case loads, and I can provide this to the committee as well; you see what happened is that the increase in employment was really quite striking shortly after welfare reform was implemented, and that really tracked the economy and what was going on.
When the economy started to falter, we see that increase going down, and we saw very slight increases in the TANF case load, but in general the trend of the TANF case load has been going down.
Food stamps tend to track much more the economy. So it goes up when the economy is very weak and it comes back down when the economy recovers. So that there are people who really turn to it when they have no other sources of income.
And one thing we have seen in both of those programs is there are a very large fraction of people who use those programs who either are employed or have been previously employed and have lost their employment.
*Mr. Smith. Okay. So reflecting on Mr. McDermott’s scenario where I believe he knows of an actual family who was living out of their car, I mean was that more a function of no programs or services available or what needs to be done to address something like that?
*Ms. Pavetti. Well, I think that one of the issues is that for a family, the resources are so low that it’s hard to find even a ‑‑ you know, when you get a median of $426, to find a place to live on that so that even if they did get the benefits, it does not mean that it could help them to get out of that situation. They probably would have needed more assistance at least at the initial to be able to figure out how to make that initial transition.
They could have gotten food assistance to be able to at least have food to be able to feed their family. But, again, it depends on what State they were in, and there are half of the States that they would have gotten less than $426.
*Mr. Smith. They were from Florida.
*Ms. Pavetti. They were from Florida. I do not know exactly off the top of my head, but I think Florida’s benefit is around $300. So I do not know if you can find a place to live in florida for $300 a month, but my guess is it would be quite difficult.
*Chairman Davis. I thank the gentleman. His time has expired.
And I would like to thank all of you for taking the time to come in and appear today. These are very complex issues. It would be nice if we had an unlimited amount of time. Unfortunately, we do not on this day, but we look forward to a continuing dialogue and we look forward to your continued comments.
If members have any additional questions, they will submit them to you in writing directly, and we would appreciate your responses back to the committee for the record.
With that, thank you, and the committee stands adjourned.
[Whereupon, at 3:29 p.m., the subcommittee was adjourned.]
SUBMISSIONS FOR THE RECORD
Harry J. Holzer
New Markets Tax Credit