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House Subcommittee Examines Effects of Welfare Reform

With Congress preparing to reauthorize the 1996 welfare reform law (P.L. 104-193), the House Education and Workforce Subcommittee on 21st Century Competitiveness held a September 20 hearing to review the impact of the law and its Temporary Assistance for Needy Families (TANF) block grant on work and families.

Subcommittee Chair Howard P. “Buck” McKeon (R-CA) opened the hearing, saying, “The effects of the law have been dramatic.” He noted that the number of welfare cases has dropped “50 percent since its peak in the early 90’s,” and that “increased employment has resulted in higher earnings for families” and a reduction in the child poverty rate.

However, Rep. Patsy Mink (D-HI), the subcommittee’s ranking Member, called welfare reform “nothing less than disastrous for many welfare recipients.” She cautioned that many former welfare recipients earn low salaries and cannot afford health insurance, child care, and sometimes cannot pay for food or rent. “Thirty percent have not found jobs, and those who do, earn only around $7.00 an hour,” she added.

Witnesses presented conflicting testimony regarding the strides that have been made since the 1996 reforms. Ron Haskins of the Brookings Institution said the law “gave a much-needed shock to the welfare system.” He told the subcommittee that “welfare reform has been accompanied by the biggest decline ever in welfare rolls, the largest increases in employment by mothers on record, and the biggest declines in child poverty since the 1960s.” Additionally, “the rates of teen pregnancy and the ratio of non-marital births have declined,” he said, recommending that Congress “hold steady on the current course while making some modest midcourse corrections.”

Heather Boushey of the Economic Policy Institute acknowledged that welfare caseloads have dropped and the child poverty rate has declined. “But these developments shroud many disturbing realities for millions of current and former welfare recipients,” she said, and added, “Caseload reduction is not an adequate measure of success.” Approximately 90 percent of former welfare recipients are mothers, and for them poverty has increased and deepened, she told the subcommittee, citing the gender wage gap as one of the problems. “The pay gap remains because of the high degree of segregation of women and men into different types of jobs,” she continued. “If single working mothers earned as much as comparably skilled men, their family incomes would increase by nearly 17 percent, and their poverty rates would be cut in half,” she said.

Joel Potts of the Ohio Department of Job and Family Services called the welfare reform law “a very compassionate approach” that has reduced Ohio’s welfare caseload. On the other hand, Sanford Schram of Bryn Mawr College contended that “the economic growth of the 1990s may very well have had a much greater impact in reducing the numbers of welfare recipients, and welfare policy may instead have had only a marginal effect.”

There seems to be a “wide distribution between the statistics” presented by the witnesses, commented Rep. Mink. “We should have one set of statistics and one set of definitions,” emphasized Rep. Betty McCollum (D-MN).

Rep. Sam Johnson (R-TX) asked the panel to identify some common reasons that people leave work and go back to welfare. “Voluntary separation of employment,” responded Mr. Haskins, adding that women often leave employment due to the “demise of child care arrangements.”

“Economic growth has stopped and evaporated,” said Rep. Robert Andrews (D-NJ), adding that “those who have struggled to get jobs are the first ones to lose them.” He asked, “What does the panel think we ought to do now?”

Mr. Haskins recommended that Congress should address the barriers facing the “families who fall through the cracks” by setting up demonstration projects. Ms. Boushey responded that Congress should increase funding for “child care facilities” and drop the five-year time limit for receiving benefits under TANF.

Rep. Mink said she plans to introduce legislation later this month that would amend the five-year time limit for receiving TANF benefits. “My bill includes several instances where the clock is stopped, including: when a parent is in school or job training, is caring for a child under age 6, or is a victim of domestic violence,” she said, adding that the bill also would “define caregiving for one’s own children as a work activity that satisfies the TANF work requirement.”

“There’s no simple solution,” said Rep. McKeon, adding that this was just the first in a series of hearings the subcommittee will hold on welfare.

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