Thank you for the opportunity to appear before you today to talk about the implementation of
welfare reform. I appreciate this Subcommittee's efforts to work with us in turning this
historic piece of legislation on welfare reform into a reality. In light of the Subcommittee's
interests, I will focus my remarks on the implementation of the Temporary Assistance for
Needy Families -- or TANF -- program, including the patterns that have begun to emerge about
state implementation, the new federal role, and upcoming plans.
Our information comes from state plans and preliminary financial data and program data
reported by the states. In addition, I learn directly about what states are doing when I travel
and speak with those who are designing welfare reform and those who are impacted
Over the past two months, I have spoken with families, private employers, welfare workers,
community leaders, state and local policy-makers, and elected officials about how welfare
reform is proceeding. I have heard over and over about the dignity of work and about the
kinds of supports communities and states are seeking to put in place as families move from
welfare to work. For example, in one of my recent trips, to New Hampshire, I talked to a
young mother who had just started a job and left welfare. She spoke with great passion about
her joy and her children's joy. "I was jumping up and down. They were jumping up and down.
I was on cloud nine for a week after accepting the job." To help her make the step to
employment, she had gone to a clerical training program and found child care through the
welfare agency, and she received regular child support that was critical to paying the bills.
Today, I would like to provide some information about our earliest findings on the effects of
welfare reform and an overview about what we know about changes in state policies and
practice. I also will discuss the new federal role, the steps we have taken at the federal level to
assume our new responsibilities under the Act, and will indicate the additional steps we will be
taking to move this important agenda forward.
WHAT DO WE KNOW?
I would now like to share with you some preliminary observations on the impacts of welfare
reform. These are preliminary because while many states began their welfare reform efforts
under waivers, TANF programs have been in place only a short period of time and are
still evolving. We will learn more over the coming months and years about the progress of
welfare reform as states make further decisions about the design of their programs and as
data is gathered on the state's choices and their impacts.
Keeping this caution in mind, we are seeing that:
More recipients are now working, and more of those who have left the rolls are working.
Interim findings from the National Evaluation of Welfare to Work Strategies and State
Welfare Reform Demonstrations indicate significant increases in the employment
levels of recipients and former recipients (with employment rates of enrollees in the
welfare reform group sometimes 8 to 15 percentage points above those of the control
group). Also, research from several individual states suggests that 50 to 60 percent of
families leaving the rolls are employed at follow-up; these rates are somewhat higher than
the employment rates observed for former AFDC recipients (which were in the 45 to 50
States generally are maintaining their investments in poor families. We have not seen a
"race to the bottom" -- in terms of state spending or benefit levels. Twenty-two states have
reported that they exceeded the 80 percent maintenance-of-effort (MOE) level for fiscal year
1997, and average spending per recipient on cash grants, transportation, child care, and
other assistance has increased.
Forty-two states have enacted policies to change the way income is counted in determining
eligibility and benefits. Most of these have increased their earnings disregards, thus helping
to make work pay and reinforcing the message that going to work is better than staying at
home. Most states have maintained the income standards they use for determining benefits
(according to the state plans, nine states have increased while eight have decreased their
benefit levels). Also, 35 states raised their general resource limits in order to
promote accumulation of assets to achieve self-sufficiency, and 48 states have raised their
automobile resource limits. To help families transitioning off assistance, 29 states indicate they
are extending child care benefits for more than 12 months, and 13 states provide transitional
medical assistance for more than 12 months.
States are beginning to focus more attention on the hard-to-serve and fragile families. For
example, 25 jurisdictions have elected the Family Violence Option to ensure that victims of
domestic violence receive appropriate protections and services, and most states exempt
parents of infants from work requirements.
States are beginning to focus their welfare offices on employment and are taking a variety of
steps to reinforce the work message. Welfare offices are using their own welfare-to-work
programs and are working closely with the State Employment Service, One-Stop Career
Centers, Job Training Partnership Act programs, and community colleges to place welfare
recipients into jobs. Almost all states have adopted a "Work First" model for setting individual
expectations and responsibilities and for structuring employment training services. This
approach emphasizes early entry into the job market and often uses referrals to other local
agencies and organizations for transitional resources. Thirty-three states expect parents to
participate in work within six months of joining the welfare rolls (compared to the statutory
standard of 24 months).
Every state requires recipients to sign Individual Responsibility Plans whereby they commit to
making specific steps toward self-sufficiency. Thirty-two states deny assistance to a family
for failure to sign or comply with one of these plans. States are also making greater use of their
sanction authority to enforce the TANF work requirements. Between 1994 and 1996,
sanction rates rose about 30 percent nationally, and sanction rates of 25 to 30 percent -- or higher
-- are now not unusual. Under their state plans, 38 states have sanctions that could result in
the loss of benefits for the entire family. (Most sanctions result from failure of individuals to
show up for initial interviews, rather than noncompliance with work assignments.)
We have continued to see dramatic declines in welfare caseloads. Since August 1996, when
PRNORA was enacted, 2.4 million recipients have left the rolls. Since 1994, the number of
welfare recipients has dropped by nearly one-third. We know that many of these recipients
are working at the time they leave or after they leave, but we do not know precisely what is
happening to many of these former recipients.
We are not seeing dramatic changes in the average incomes of welfare recipients and former
recipients. For families leaving the rolls, the proportion of families experiencing increases in
income are comparable to the proportion with decreases in income. Findings for
sanctioned families are not dissimilar; studies in Iowa and South Carolina showed that 40
percent of individuals who were sanctioned experienced income increases.
At the state and federal level, and community level, new partnerships are being forged.
Government is collaborating with business, community organizations, transportation
providers, the media and religious leaders to help move families to work.
For example, new partnerships with transportation agencies have resulted in substantial
innovation. In many places, we are seeing revisions to traditional public transportation services
to provide low-income families with better access to jobs. To pick two examples from
- In Ventura County, California, the local transit agency has
extended its hours of service, re-routed some lines, and
developed new service to some remote locations being used as
work experience sites.
The remote communities of Glendale and Azalea, Oregon, have adopted a combination of
innovative strategies, including the development of carpools with 28 volunteer drivers, to
give residents access to education, training, and employment opportunities 10 to 50 miles
away. Also as part of this effort, the local school district allows TANF recipients and
other residents to use school buses to get to work.
While these innovations are happening in some places, there a need for more flexible
transportation resources, hence the need for the Access to Jobs initiative.
THE NEW FEDERAL ROLE
Consistent with the changed expectations about the federal role, PRWORA required
significant reductions in ACF staff positions devoted to the programs that were block-granted
and in Department managerial positions. As noted in GAO's February 1998 report to
you, entitled Welfare Reform--HHS' Progress in Implementing its Responsibilities, we
achieved these reductions.
At the same time, we have worked to focus on the areas where we have new and expanded
responsibilities. our efforts are focused on supporting states and communities in moving families
to work, on holding states accountable for results, and on developing and sharing
information about effective practices. Key elements of this role include: coordination,
technical assistance, research, and accountability.
In Washington, we have expanded our network of federal partners to improve the coordination
of federal programs and to make it easier for state and local program administrators to
leverage the resources they need. These efforts are critical, not just for their direct positive
effects, but also because they model the types of collaborations that we want to foster at the
state and community level.
We have been working with the Department of Labor (DOL) on its implementation of the
new $3 billion Welfare-to-Work (WtW) grants, including the issuance of guidance and Interim
Regulations, state plan reviews, regional conferences and roundtable discussions. We
also are working closely with DOL in the implementation of our data collection and evaluation
responsibilities under the Welfare-to-Work grants. Representatives from the Departments of
Housing and Urban Development, Transportation, Education, and Agriculture and the Small
Business Administration have joined in some of these efforts to help address the challenges
of finding employment for hard-to-place TANF recipients and the crucial need for state and
We also have entered into new partnerships with the Department of Housing and Urban
Development and the Department of Transportation to work on improving the accessibility of
welfare recipients to jobs and services. We have been working with our partners in the
Departments of Labor and Transportation to develop written guidance on the flexible use of
TANF and Welfare-to-Work funds to meet the critical transportation needs of clients. With
HUD, we are assessing how the programs, policies, and delivery systems of both agencies can
effectively complement the other in helping our clients achieve self-sufficiency. We are
providing technical support to these federal agency efforts, working through our
Regional offices to support similar efforts at the state and community level, and developing
information on promising practices that can be broadly disseminated.
Another key target of our coordination efforts has been Tribal programs. Prior to the
passage of PRWORA, Tribes had some experience operating JOBS and child care
programs, but little direct involvement with AFDC. Many were, therefore, not very well
positioned to make the decision whether to implement their own TANF program or to
understand what that would entail.
Here in Washington and in our regional offices, we worked extensively with Tribes to
help them make more informed decisions and, if they so decided, to submit an acceptable
TANF plan. We helped facilitate communications between the states and Tribes
about critical implementation questions, including service area definitions, funding
implications, and the need for referrals and exchange of information. We also issued guidance
to clarify that states could contribute to Tribal TANF programs and claim such
expenditures for MOE purposes. This clarification facilitated the development of additional
Tribal programs. To date, we have approved ten Tribal TANF plans and anticipate that
several additional plans will be submitted this year.
The purpose of our technical assistance (TA) initiatives is to ensure that states, local
governments, and their community partners have access to the critical information they need
to accomplish their goals for families. In these initiatives we use models, on-site -visits,
contracts, and conferences to promote ideas and support state and local implementation
efforts. We also collect and disseminate information on promising practices.
To help make our technical assistance efforts more responsive to state and local needs, we
established a Peer Technical Assistance Network and a Technical Assistance Work Group.
The Peer TA Network facilitates the exchange of information on promising and best
practices among states, localities, and community groups. The Work Group consists of
federal, state, local, and non-governmental representatives. In its first meeting in January,
the Work Group decided to give priority to several issues during fiscal year 1998,
including: job retention, serving families with multiple needs, information systems, and
planning for future economic downturns. In its next scheduled discussion, the group will
specifically address the issues of job retention and serving families with multiple needs.
Several of the initiatives we are undertaking focus on the priority areas we have identified. For
- In all our regions we are co-sponsoring workshops with employers to develop
short-term training programs that upgrade the skills of welfare recipients. We held the first
workshop at a community college in Huntsville, Alabama, earlier this week;
- We have developed a training package for welfare agencies to
use in implementing programs that identify and provide appropriate
services for victims of domestic violence; and
- We have funded a National Technical Assistance Center on Welfare Reform and
Disabilities at the University of Kansas. This center will provide stakeholders with information
to assist them in developing effective strategies for serving people with
Finally, in the interests of expanding access to information for states, communities, and other
interested parties, we are creating an ACF information center, which will share data and
information using a variety of media -- such as the internet, conferences, brochures, and
handouts -- on issues such as the TANF statute and regulations, State plans, implementation
status, and research results.
Another key component of the federal role has been to ensure state accountability in key
program areas and to promote high performance. In these areas, we have taken a number
of critical steps over the past 14 months. However, there is still much more to be done, and
we will be working hard to ensure that future actions are carried out in a timely fashion.
Two TANF regulations that address the area of accountability have been issued recently. In
November, we issued a Notice of Proposed Rulemaking, which covered the major TANF
provisions on work, penalties, and data collection. This proposed rule sent a clear
message that we recognize the importance of state flexibility in designing their programs,
but we also intend to hold states accountable for meeting critical program requirements and
for using their authority to create separate state programs for appropriate purposes. We are
presently reviewing comments received and anticipate publication of final rules by the end
of the fiscal year.
This month we issued the Notice of Proposed Rulemaking regarding the bonuses for states
that are most successful in reducing out-of-wedlock births.
Key guidance on the formula we will use for awarding the High Performance Bonuses to
states in Fiscal Year 1999 (based on their performance in Fiscal Year 1998) was also issued
this month. The proposed formula focuses on state performance, both in moving
individuals into the work force and in the success of individuals in the work force, once they
are employed. We developed this formula after extensive consultation with the National
Governors, Association, the American Public Welfare Association, the National
Conference of State Legislatures, state agencies, advocacy groups, technical experts, and
We currently are working on a Notice of Proposed Rulemaking that will address the High
Performance Bonus process for future years. We are committed to exploring measures that
encompass all of the goals of TANF and will seek advice on additional measures through
the regulatory development process. We anticipate publication of the proposed rule this
We plan to issue several other TANF-related regulations later this year as well, including Tribal
TANF and employment programs, child poverty rate methodology, and data collection for the
In addition, we have issued a number of policy announcements that have provided critical
information to help states proceed with the implementation of their programs. Among the most
significant were last January's announcement on the ability of states to fund activities
through separate state programs, information on funding allocations, guidance on access to the
contingency fund, and the interim guidance on TANF data collection and reporting.
Finally, un are finishing work on two Reports to Congress. The first report addresses
Recommendations for Changes to the Contingency Fund and the second is the Annual
Report on TANF Programs and Performance. We expect to submit both reports to this
Subcommittee next month. Since the amount of performance information we have
available is still limited, the latter report will not cover all the topics required by the statute.
However, we are working with states to correct problems in their data submissions and
will provide supplemental information to this Subcommittee as it becomes available.
Our research and evaluation efforts are critical to the achievement of the goals of welfare
reform. This subcommittee's support has been critical to enabling reliable information about
welfare reform to be developed. Your keen interest in this area is demonstrated by the
separate panel in this hearing today, which will address the topic of research on welfare reform.
Howard Rolston, Director of the Office of Planning, Research and Evaluation for ACF, is
a member of this panel and will provide a fuller discussion of this important topic. I would like
to briefly highlight some of the key points.
States have a myriad of options available to them under welfare reform and need information
about which strategies will be most effective. Fortunately, the evaluation efforts we began
under prior law, and that PRWORA provided us authority to support, have given us some
useful information and will continue to produce more in the years to come. Disseminating
information on the results of our research is one of ACF's major tasks in the coming years.
One of the challenges we face is to get better information about what is happening to families
who are leaving assistance. To answer this challenge, the Department worked with the
National Governors' Association, the American Public Welfare Association, and the National
Conference of State Legislatures to sponsor a conference that examined what information
was available on "leavers." Building state capacity to track "leavers" is central to meeting
this challenge. At this meeting we learned that states are greatly interested in studying this
issue further, and we are compiling a summary of what follow-up studies are being done. We
believe this information is critical to learning if families leaving welfare are achieving
self-sufficiency and improving the quality of their lives.
The impact of welfare on children is also of critical interest to us. Because most research
primarily looks at effects on adults, we are supporting research in five states that will look in
depth at the effects of welfare reform on children.
OUR FOCUS IN THE COMING MONTHS
The passage of this legislation has presented all of us with a variety of opportunities and
challenges. At this early stage, it appears that implementation is proceeding on the right track.
That is, reform efforts reflect an increasing awareness of the critical importance of:
- Fostering strong families and personal responsibility;
- Promoting work and job retention;
- Maintaining investments, in order to reach all needy
families rather than only the easiest to place;
- Getting all key players to the table (at the federal,
state and community level) so that the many dimensions
of self-sufficiency can be addressed; and
- Directing agency efforts to the achievement of
measurable employment goals and positive outcomes for
families and children.
Over the next several months we will continue to work along a broad front to further the work we
have begun. In particular, we are hearing from states and communities about what they view as
the following critical next steps:
Supporting states, communities and employers as they
focus more and more on job retention and earnings after
the initial placement;
- Working with states to make the investments, develop
the knowledge, and provide the supports so that all
families, including the hardest to serve families, can
- Completing the transformation of welfare agencies into
job centers, ensuring that appropriate linkages are
developed, and fostering community-based approaches to
- Completing the development of a regular, reliable
system for collecting the data necessary for tracking
what is happening and ensuring program accountability;
- Improving our understanding about the effects of these
changes on children and families so that we can develop
more effective programs and make necessary adjustments.
At the federal level, the Clinton Administration has led the call for social policies to help ensure
that work pays. The principle of supporting work has been embedded in the President's agenda,
including family leave, a higher minimum wage, an expanded EITC, the new Child Credit, Work
Opportunity and Welfare-to-Work Tax Credits, the new Child Health Insurance Program, and
increased child support collections. The President's budget would build upon these successes by
providing additional supports. The President's Child Care Initiative, for example, targets
substantial new child care funds to low-income working families who are struggling to stay off
of welfare. In addition, the President's budget would help families making the transition from
welfare to work get to where the jobs are through funding for welfare-to-work housing vouchers
and the Access to Jobs welfare-to-work transportation initiatives.
I would like to express my appreciation to this Subcommittee for its interest in, and bipartisan
support of, these endeavors. I look forward to future conversations about the progress of
welfare reform and hope we can continue to work together in resolving any implementation
issues that arise.
I would be happy to answer any questions at this time.