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— in TRENDS IN SPENDING AND CASELOADS FOR AFDC =^^^^— AND RELATED PROGRAMS Y 4. W 36: 103-2 Trends in Spcnîing and Caseloads fo... HEARING BEFORE THE SUBCOMMITTEE ON HUMAN RESOURCES OF THE COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION MARCH 11, 1993 Serial 103-2 Printed for the use of the Committee on Ways and Means U.S. GOVERNMENT PRINTING OFFICE gg_563^ WASHINGTON : 1993 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments.CongressionalSalesOffice.Washington.DC 20402 ISBN 0-16-040788-5 . ' TRENDS IN SPENDING AND CASELOADS FOR AFDC \^ AND RELATE^D^PRÔ^GRÂ^MS^^^^^^ 4. W 36: 103-2 ends in Spending ind Caseloads fo. . HEARING BEFORE THE SUBCOMMITTEE ON HUMAN EESOUECES OF THE COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION MARCH 11, 1993 Serial 103-2 Printed for the use of the Committee on Ways and Means U.S. GOVERNMENT PRINTING OFFICE gg_5635^ WASHINGTON : 1993 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments.CongressionalSalesOffice.Washington.DC 20402 ISBN 0-16-040788-5 COMMITTEE ON WAYS AND MEANS DAN ROSTENKOWSKI, Illinois, Chairman SAM M. GIBBONS, Florida BILL ARCHER, Texas J.J. PICKLE, Texas PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York BILL THOMAS, California FORTNEY PETE STARK, California E. CLAY SHAW, Jr., Florida ANDY JACOBS, Jr., Indiana DON SUNDQUIST, Tennessee HAROLD E. FORD, Tennessee NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California JIM BUNNING, Kentucky BARBARA B. KENNELLY, Connecticut FRED GRANDY, Iowa WILLIAM J. COYNE, Pennsylvania AMO HOUGHTON, New York MICHAEL A. ANDREWS, Texas WALLY HERGER, California SANDER M. LEVIN, Michigan JIM McCRERY, Louisiana BENJAMIN L. CARDIN, Maryland MEL HANCOCK, Missouri JIM McDERMOTT, Washington RICK SANTORUM, Pennsylvania GERALD D. KLECZKA, Wisconsin DAVE CAMP, Michigan JOHN LEWIS, Georgia L.F. PAYNE, Virginia RICHARD E. NEAL, Massachusetts PETER HOAGLAND, Nebraska MICHAEL R. McNULTY, New York MIKE KOPETSKI, Oregon WILLIAM J. JEFFERSON, Louisiana BILL K. BREWSTER, Oklahoma MEL REYNOLDS, Illinois Janice Mays, ChiefCounsel and StaffDirector Charles M. Brain, Assistant StaffDirector Phillip D. Moseley, Minority ChiefofStaff Subcommittee on Human Resources HAROLD E. FORD, Tennessee, Chairman ROBERT T. MATSUI, California, RICK SANTORUM, Pennsylvania Acting Chairman E. CLAY SHAW, Jr., Florida JIM McDERMOTT, Washington FRED GRANDY, Iowa SANDER M. LEVIN, Michigan DAVE CAMP, Michigan MIKE KOPETSKI, Oregon MEL REYNOLDS, Illinois BENJAMIN L. CARDIN, Maryland (II) CONTENTS Page Press releaseofTuesday, March 2, 1993, announcingthe hearing 2 WITNESSES American Public Welfare Association, A. SidneyJohnson III 54 Barnhart, Jo Anne B., former Assistant Secretary, Administration for Chil- dren and Families, U.S. Department ofHealth and Human Services 73 Burtless, Gary, the Brookings Institution 8 Centeron Budget and Policy Priorities, IrisJ. Lav 62 Center for Lawand Social Policy, Jodie Levin-Epstein 89 Children's Defense Fund, Nancy Ebb 78 Gabe, Thomas, Congressional Research Service 30 Giannarelli, LindaD., the Urban Institute 20 SUBMISSIONS FOR THE RECORD Coalition ofCalifornia Welfare Rights Organizations, Inc., Kevin M. Aslanian, statementand attachments 97 Legal Assistance Foundation ofChicago, John Bouman and Daniel J. Lesser, letter 105 Parents forJustice, Sara Dustin, statementand attachments 109 San Diego County Department ofSocial Services, Cecil H. Steppe, statement... 115 (III) TRENDS IN SPENDING AND CASELOADS FOR AFDC AND RELATED PROGRAMS THURSDAY, MARCH 11, 1993 House of Representatives, Committee on Ways and Means, Subcommittee on Human Resources, Washington, D.C. The subcommittee met, pursuant to call, at 1 p.m., in room B-318, Rayburn House Office Building, Hon. Robert T. Matsui (acting chairman ofthe subcommittee) presiding. [The press release announcing the hearing follows:] (1) FOR IMMEDIATE RELEASE PRESS RELEASE #2 TUESDAY, MARCH 2, 1993 SOBCOHHITTEE ON HUMAN RESOURCES COMMITTEE ON WAYS AND MEANS U.S. HOUSE OF REPRESENTATIVES 1102 LON6WORTH HOUSE OFFICE BLD6. WASHINGTON, D.C. 20515 TELEPHONE: (202) 225-1025 THE HONORABLE ROBERT T. MATSUI (D., Calif.), ACTING CHAIRMAN, SUBCOMMITTEE ON HUMAN RESOURCES, COMMITTEE ON WAYS AND MEANS, U.S. HOUSE OF REPRESENTATIVES, ANNOUNCES AN OVERSIGHT HEARING ON TRENDS IN SPENDING AND CASELOADS FOR AFDC AND RELATED PROGRAMS The Honorable Robert T. Matsui (D., Calif.) » Acting Chairman, Subcommittee on Human Resources, Committee on Ways and Means, U.S. House of Representatives, today announced that the Subcommittee will hold an oversight hearing on trends in spending on the poor and in aid to families with dependent children (AFDC) caseloads, and recent State budget and policy decisions on the AFDC and related programs. The hearing will be held on Thursday, March 11, 1993, beginning at 1:00 p.m. in room B-318 of the Rayburn House Office Building. Testimony at the hearing will be limited to invited witnesses only . SCOPE OF THE HEARING ; With only few exceptions, national AFDC caseloads rose to new historic peaks every month from August 1989 to November 1992, when almost one out of seven American children received an AFDC benefit. The rapid AFDC caseload growth has occurred at a time when many States have experienced severe budget constraints. For fiscal years 1992 and 1993, the majority of States faced impending budget deficits, and enacted some combination of spending reductions or tax increases in response. Public assistance programs have not been spared from these State budget deficit reduction efforts. In fact, many States have reduced AFDC benefit levels or allowed the purchasing power of the benefits to decline. Further, for fiscal years 1991 and 1992, States have drawn down only two-thirds of available Federal funding for the Job Opportunities and Basic Skills (JOBS) program, established under the Family Support Act of 1988. There is growing concern that implementation of the child care provisions of the Family Support Act also has been stalled. At the hearing, Members of the Subcommittee will have an opportunity to hear testimony from budget experts and researchers, representatives of State governments, and interest groups on: (1) historical trends in spending on the poor and in benefit levels, (2) historical trends in AFDC caseloads, and (3) the impact of recent State budget and policy decisions on the AFDC and related programs. Panels for the hearing will be divided according to these issues, which are outlined in more detail below: (1) How much do we spend on the poor, and how high are benefit levels? What are historical trends in public spending on the poor? What effect has this spending had on the poor? How have benefit levels under the AFDC program changed over time? How do these benefit levels interact with other Federal means-tested programs, and how have combined benefit levels changed? What effect have changes in benefit levels had on Federal and State budgets? (MORE) . (2) Why are AFDC caseloads growing so fast? What data help to describe and explain long-term and recent trends in the AFDC caseload? To what extent have changes in the size and characteristics of the population, the economy, and program policies contributed to recent increases in the caseload? (3) What impact have recent State budget problems had on AFDC and related programs? To what extent have AFDC caseload increases contributed to State budget problems? What impact have State budget problems had on: (1) benefit levels, policy, and administration under the AFDC program; (2) funding and implementation of the JOBS program; and (3) the implementation and nature of the child care guarantee available to AFDC families participating in work, education or training? BACKGROOND ! The AFDC program provides cash payments to families of needy children who have been deprived of parental support or care because their father or mother is absent from the home, is incapacitated, is deceased, or is "unemployed" (works fewer than 100 hours a month) Under the program, States define "need," set their own benefit levels, establish (within Federal limitations) income and resource limits, and administer the program or supervise its administration. Federal funds pay from 50 to 80 percent of AFDC benefits costs in a State (54 percent on average) and 50 percent of administrative costs. The Family Support Act of 1988 established a new employment, education and training program for recipients of AFDC, called the JOBS program. The JOBS program is designed to help needy families with children reduce the degree to which they depend on AFDC for income and to avoid long-term enrollment in the program. States are required to enroll all able-bodied persons whose youngest child is at least age 3, provided State resources are available. A range of services and activities must be offered by each State. Federal funding for JOBS program costs is available to States as a capped entitlement, equal to $1 billion in fiscal year 1993. Also under the Family Support Act, States are required to guarantee child care to AFDC families, if the care is necessary for a parent to seek employment or remain employed, or to participate in a work, education, or training activity. In addition. States must guarantee child care (and impose an income-scaled fee for this care) for 12 months after the month a family becomes ineligible for AFDC due to increased earnings, increased hours of employment, or the loss of the earned income disregard. Federal funding for supportive and transitional child care is available as an open-ended entitlement. DETAILS FOR THE SUBMISSION OF WRITTEN COMMENTS ; Any persons or organizations wishing to submit a written statement for the printed record of the hearing should submit at least six (6) copies of their statement by the close of business, Friday, March 26, 1993, to Janice Mays, Chief Counsel, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing a written statement wish to have their statements distributed to the press and interested public at the hearing, they may deliver 100 additional copies for this purpose to the Subcommittee, room B-317 Rayburn House Office Building, on the day of the hearing. (MORE) FORMATTING REQUIREMEMT8 ; Eachstatementpresentedforprintin{totheCommitteebyawitness, anywrittenstatementor exhibitsubmittedfortheprintedrecordoranywrittencommentsinresponsetoarequestforwritten comments mustconformtothe(uidelineslistedbelow. Anystatementorexhibitnotincompliancewth these(uidelineswillnotbeprinted, butwillbemaintainedintheCommitteefilesforreviewandusebythe Committee. 1. Allstatementsandanyaccompanyin{exhibitsforprinting mustbetypedin sinjlespaceon le(al-sizepaperand may notexceedatotalof 10pages. 2. Copiesofwholedocumentssubmittedasexhibit materialwill notbeacceptedforprinting. Instead, exhibitmaterial shouldbereferenced andquotedorparaphrased. Allexhibitmaterial notmeetingthesespecificationswillbemaintainedinthe Committeefilesfor reviewand useby theCommittee. 3. Statementsmustcontainthe nameandcapacityinwhichthewitnesswillappearor, forwritten comments, thenameandcapacityoftheperson submittingthe statement, aswellasany clientsorpersons, oranyorganizationforwhomthewitnessappearsorforwhomthe statementissubmitted. 4. Asupplemental sheet mustaccompanyeach statementlistingthe name, fulladdress,a telephone numberwherethewitnessorthedesignated representative maybereachedanda topicaloutlineor summaryofthecomments andrecommendationsinthefull statement. This supplementalsheetwill notbeincludedintheprinted record. Theaboverestrictions andlimitationsapplyonlyto materialbeingsubmittedforprinting. Statements andexhibitsorsupplementary materialsubmittedsolelyfordistributiontotheMembers, thepressandthe public duringthecourseofa publichearing maybesubmittedinotherforms. i ».