demonstrated the capacity to innovate and to use this program in a way most flexible to meet the needs of the people in their own state. but they're asking for more flexibility. why shouldn't we give it to them? in a way, sometimes i start to say i'm more like the republican view originally of giving flexibility to states. why shouldn't we give them the ability to come forward with a demonstration program that would allow the test to be getting people employed rather than off of cash assistance or why can't they have the ability to go beyond 30% participation, where they demonstrated that they have been able to achieve the other goals that we've set out for them in welfare reform, so as we consider the reauthorization of tanf, shouldn't we be considered ways to give the states additional flexibility, allowing them -- holding them accountable to a final result but giving them more flexibility in order to achieve it?

>> yes. we should. i think we were right in '96 because the states were not focused on work. you know, they made excuses about oh, well, these mothers are incapable of working and so forth, and so we really changed the whole culture of welfare. i visited several offices in your state and you can see that they are organized around work. they call themselves work. the word welfare has been cast into the depths. so i think there have been a lot of big important changes and under those circumstances, my own opinion, i'm not very popular among republicans for this view, but my own opinion is we should give more flexibility to the states. and i think the relentless increase in tightening the screws on requirements as, for example, in the dra, has produced unexpected results and they're not helpful to either the mothers or to the states, so i think we ought to look at this very carefully. i think for example in the case that you raise of education,

now, the fact is a lot of these families, even when they try to go to school, they drop out quickly. a lot of them, it's the furthest thing from their mind but still, there are families on welfare that can profit from education, especially a tailored short program that was six months and led to a welding certificate or something. those kind of things i think, states should not be limited in doing that. the committee will look at that very carefully and i think make changes. i agree. >> the other panelists want to respond? >> i think there's two things that you mentioned that are important. one is the idea of encouraging the research and trying to find innovations in supporting states in those efforts. the second piece is the incentives. as long as tanf is a block grant and the states do have those

flexibilities, the four goals are very, very broad and thinking about whether those are still the four goals that you want the program to address is important, because a lot of the resources that are going away from cash assistance and jobs are because of those broad goals, and the final point is incentives. i think, i agree with dr. haskins, the way that state performance is being measured now is not really helpful and there are probably a number of different ways that you could consider new incentives, including outcomes that you mentioned. >> my time's expired. i'm at the mercy of the chair. >> i'll go down the list here. thank you very much. senator nelson? >> dr. haskins, you remember

that the change in the law was to end welfare as we know it and looking at your poverty rates figure number one, after the enactment of that law, the poverty for children went down for seniors, basically stayed about the same for all people went down a little, but all of those trend lines have gone back up recently. what happened? >> we have a lower percentage of non-marital birth mothers and single mothers working. their work rates have declined less than most other demographic groups but they work less and now we have created a system where if you don't work, you cannot get out of poverty so

that's exactly what happened. but i would point out to you that the work rates among low income mothers are still higher than they were before welfare reform, and the child poverty rates are still lower among kids and never married families and all single parent families are lower than they were before welfare reform, so the strategy is still working somewhat. when the economy gets going i think it's plausible to assume those mothers will go back to work, especially if the states have the kind of programs that senator cardin described, so i'm somewhat optimistic that as the economy recovers, poverty will drop again among this group. but keep in mind, poverty among single mother families and among black children since they are such in single parent families at such a high proportion, reach their lowest level ever and they're still much lower than they were before welfare reform and it's because of work. >> wasn't the earned income tax credit supposed to be part of the relief for this?

and why with the institution of that would you still have? >> if mothers work close to full-time even at say $8 or $9 an hour, between the earned income tax credit, the child tax credit, food stamps, they will be above poverty if you include all those benefits. i gave an example of this in my testimony that this, i call this, this is -- i think it's a triumph of american social policy that the combination of work which republicans really preferred in welfare reform, and benefits that are contingent on work, those two things that are highly bipartisan solution, that's what we created and as long as we can help mothers work, then the system will work. let me point out one more thing. the eitc has a vicious little characteristic. if a mother loses a job, she not only loses her earnings, she loses her eitc. so it's a double whammy. and that is -- i don't know what to do about that but that is a very serious problem.

the eitc's a great thing, one of the best programs we have, but it's really a problem when someone loses a job or loses hours. >> that's a very good point, mr. chairman. and senator hatch. very good point. ms. lein? >> i just wanted to point out, following up on that, that what we're seeing is an increase in the variability of jobs so that people have jobs with variable hours. there's a great deal of underemployment as well as unemployment so that people are employed and as that underemployment sinks, other kinds of benefits sink as well. >> but at least even if they are underemployed, as dr. haskins points out, they've got a chance to get the earned income tax credit. >> they have a chance to get the income tax credit, but the sum will start dropping them under poverty again. >> final point. let me ask you about, you know, the much maligned stimulus bill.

one of the biggest parts of that other than tax cuts, by the way, which often is overlooked, but one of the big parts of the stimulus bill was to help out the states with medicaid and also education, and i know in my state, a huge amount of money went back to the state for two years to help them with medicaid, but after two years, it cuts off, and then the states didn't pick up the responsibility after that, and so you have this huge falling off the cliff after two years. what do you think about all that? and how does this tie into this? >> i think one of the problems that that causes is that for low income families, i think medical

debt is becoming a part of their financial life, and that families that have tried to orchestrate that, if they don't have access to medicaid or to the child health insurance program, end up in debt and often in surprising debt in very large amounts, and i think one of the concerns we have as medical insurance doesn't become more broad spread, is that more families are going to be hampered by the degree to which they're carrying medical debt. >> thank you, mr. chairman. >> thank you, senator. senator carper. >> thanks, mr. chairman. i want to welcome our witnesses today. it's very nice to see you, dr. haskins. when i was privileged to be governor of delaware and involved in the national governors association, this issue, he was one of the top advisors for us in the house and frankly as governors as well. i appreciate very much the great

work that you've done, continue to do. i welcome our other two witnesses as well. i still have the chance to go into schools all over my state, i'm sure my colleagues visit schools throughout their states. i like to do assemblies in high schools and sometimes when i do, in middle schools as well, and i'll mention this to them, that if a young woman age 16 becomes pregnant, drops out of school, does not marry the father of her child, there's an 80% likelihood that they will live in poverty. if that same 16-year-old girl does not become pregnant, graduates high school, waits until at least 20 to have a child and ends up marrying the father of her child, there's an 8% likelihood they will live in poverty. those were numbers from probably a decade or so ago but my guess is they're probably not far off.

one day, someone in dover, delaware, i think at the sheraton hotel, we invited every high school in delaware to send two kids, boy and girl, to help us think out loud about teen pregnancy, and we spent the big part of the day together. people didn't know it but they actually helped me draft what we wanted to do on welfare reform in our state. they basically said it starts with a state-wide campaign on teenaged pregnancy, to change the incentives and the way we really think about teenaged pregnancy. they also said it was important that we not only help people find a job, we help make sure they don't become parents before they're ready to become parents. we make sure they have some of the skills they need that will help them find a job, and that we should provide, so we're talking about using resources to reduce the incidence of teenaged pregnancy, better ensure people have the skills they need to find a job which was an opening, better ensure that they have the

ability to find that job, get to that job, make sure they have child care for their kids if they need that, to make sure they have health care so they don't just lose time out on medicaid, but the idea as you all know, sort of the grand compromise is to make sure that people are better off going to work than they are just staying on welfare. in theory, i thought it was pretty smart and the kids were pretty smart in helping me and others to figure that out in my state and probably in other states as well. i would like to know what's been going on with teen pregnancy rates in this country over the last decade or so and i understand totally that actually there is encouraging news out there, and i would like to know what's going on, if you know, and to what extent can the ways we've moved toward welfare, from welfare to work, trying to make sure people are better off under work, how that might have affected teen pregnancy rates. dr. haskins? >> yes, thank you. you may recall that we had something like 15 provisions in the '96 welfare reform bill that

were intended to have an impact on family structure, teen pregnancy, non-marital birth rates. we gave, we set aside $25 million for cash awards to the states that could reduce their non-marital birth rates and i don't think any of that had much impact. however, we have had success in teen pregnancy. teen pregnancy rates have fallen every year since 1991 except for two or maybe three years, and those were recent years and they picked back up again. the congress has done a lot in cooperation with the administration to try new programs that are based on hard evidence that they will work, and we're spending about $100 million on those evidence-based programs so i think we're continuing to do what's required. here's the big problem, i think, and it's hard to figure out exactly how to address it. that is if you look at the non-marital birth rates for the young ladies just above teen -- the teen years so in their early 20s, those rates as the teen

poverty rate goes down, those rates go up. it i it's almost as if young ladies can only avoid pregnancy for so long and i think there's some truth in that, having interviewed a number of these mothers, that it's not necessarily, in fact in most cases not a mistake. they want a baby. their prospects for marriage are not great. their choices among men are problematic because many of them don't work so they decide well, i have a baby with this guy but i sure wouldn't marry him and they have a baby with the guy. so we need to focus on 20 year olds, too. it's not just teenagers and there i think medicaid can play an important role by covering family planning services and the mothers are anxious to do that. they do it if it's offered. it's not going to be a huge part of the problem but it is one solution. but that's something to really focus on, non-marital birth rates among 20-somethings. >> mr. chairman, could i ask either of the other witnesses just to briefly comment on the same issue, please? thank you. >> and i think it's also worthwhile to think about focusing on men and on young

men, the potential fathers of these children and what we're doing about their job prospects, what kinds of services they have available to them and what kinds of health care and advice they have access to, because they are undoubtedly less served than the women in the same age bracket. >> miss brown? >> i was just going to mention one other point, which is that we're still learning and need to learn a lot more about the concept of marriage promotion. there have been some recent studies that have just been released that are not very encouraging and so if we're talking about promoting marriage, i think we still have a long ways to go in figuring that out. >> all right. thanks. >> for low income families. >> mr. chairman, thanks very much for holding this hearing and giving us a chance to have this discussion. >> thank you, senator. >> thank you, mr. chairman. thank you. i think the focus you and the staff have been putting on

poverty and in particular the anti-poverty opportunities to address these issues in a fresh and creative way makes a lot of sense. i very much appreciate it. dr. haskins, you've been doing yeoman work in this field for a long time. >> i'm still so young. >> you are. we will put you in the youth caucus as well. i'm looking forward to pursuing economic mobility issues with you as well in the days ahead. i'll have a question on that in a moment. now, i want to take what we've done in oregon and get your sense sort of on one of the opportunities for reform. my home state has focused primarily on education and trying to find ways to keep families together. those are our special kind of priorities. now, this approach coincided with the recession which hit my state particularly hard. between december 2007 and december 2009, nationwide caseloads went up 12%, but

oregon's went up 40%. two parent caseloads alone went up over 214%. so now we're looking at the prospect of $27.5 million in federal fines for not meeting the work participation rates. so the question i have and your sense of a policy change, in an economy with fewer jobs than job seekers, wouldn't it make sense to give the states more credit for moving a public assistance recipient into a job rather than simply moving them off the rolls? because it seems to me if we take that as kind of a fundamental proposition, we could look at a variety of new approaches like perhaps give the states a waiver to start trying some demonstration projects in

this area. what's your thinking on that point? >> yes. i think it's a good idea. it's a reasonable thing to do. i'm worried about the way you actually measure it. i would give the states something new to report, what is compared to at issue so there are a lot of issues about how to measure but i think basically it's a sound idea. as long as we did not lose the focus on work. a lot of people get jobs during a recession. what you say about the number of people looking for a job and the ratio to number of jobs available was worse in this recession than any time since the depression. so that's a consideration. it's harder to find a job. but people still find jobs even during a recession. so again, it's like the original tanf program. the balance between the reasonable policy and a policy that does put pressure on people to work, as long as they have to maintain that, i think your idea's a good one. >> it's that balance that i'm interested in and i think senator cardin has made a number of good points on this and that's why the approach of

trying particularly to let states that have been creative and as you know, oregon has been consistently in terms of human resources to get a waiver to try some of these approaches, i think would be attractive. let me ask you a little bit about the economic mobility issues. as you know, i'm going to be one of the co-chairs of the caucus which is going to kick off here very shortly in partnership with pew. now, you've touched on a number of policy recommendations, but why don't you, if you wouldn't mind, just give us a couple of recommendations with respect to the economic mobility work that you have been pursuing, because i think this is hugely important. we're seeing of course these major regional differences which i gather colleagues have touched on before i came in as well. why don't you just, for purposes of the rest of my time, give us a sense of a couple of the recommendations that you think are particularly important in the mobility issue. >> okay. let me mention two.

the first one is everything we've been talking about in this hearing room today, because the way to increase mobility, one big way to increase it is start at the bottom. those are the people that are most disadvantaged. if you look at the data on earnings, almost any measure of income, the bottom is what has really been staying. in fact, the bottom would have been even worse than stagnant, would have declined if it had not been for federal benefits so the federal transfer of payments from wealthier, more advantaged people to low income people has actually meant that even over the period over the last two or three decades, that the bottom has actually moved up unlike what you likely read in the "new york times" and a big part of that is so many people at the bottom work, especially single moms. so the purpose of tanf is verified by the importance to increasing mobility in the united states. start at the bottom, help them first. the second thing is, i think we need to figure out a much better way to get kids into junior

colleges and colleges. we're working on that and you know, i would not fault social policy to either the federal or state level but we need an even more intense and smarter focus on it. the reason is that low income kids are still at a disadvantage. they're less likely to enroll either in two or four-year colleges and they're more likely to drop out despite the fact that they are less likely to enroll. so the difference in achieving a two or four-year degree between kids from the bottom and kids from the top is enormous. and that's something we ought to focus on, especially because we have very good data, long-term data where we can compare the income of kids to their own parents. that's how long these kids have been followed, for 40 years, and it shows that if a low income kid from the bottom 20% roughly below $20,000, if they get a college degree, their chances of staying in the bottom are cut by more than half and their chance of making it to the top is increased by a factor of four. name any other intervention that

will increase something by a factor of four. so this is an extremely important problem. we just simply have to figure out a better way to get kids in junior college and college, especially low income kids, and a big part of it is making our high schools better. i know that's hard but that's a big part. >> well said. my time has expired. mr. chairman? >> thank you, senator. senator thune? >> thank you, mr. chairman. thank you for holding the hearing today. important subject. thank you for taking the time to share your insights with us. let me ask this of dr. lein and maybe miss brown as well. why do you think that the utilization of the tanf program has decreased? >> i think there are several contributing factors to it. i think it's hard to use and particularly hard to use if you don't think you're going to get a job and you're not going to be able to meet those work requirements. i think some people just opt out for that reason.

i think a lot of families are doing things and feel they have to do things in that network sense that make tanf harder to do. they have other people living in their household, they are drawing on their networks in ways, they are engaged in the informal labor market trying to make ends meet and it doesn't mesh well with the tanf program. i think unless they are in a program where they see some movement up through education and training, it also appears that they're not going to be helped to be placed in jobs that would actually dramatically change their situation so i think there's that part of it. the second thing that families tell us is that tanf, the tanf payments are actually only part of the picture and as long as they were using it as an avenue into medicaid, into other kinds of support, it was more valuable to them than just the cash payment itself. and those have become somewhat separated. >> okay. same answer, ms. brown?

>> pretty much. i would just like to add that one of the things that we've -- at risk of making this more complicated, in addition to the tanf program, there are other types of investments that the states are making and sometimes, states will take families that they think are not likely to succeed in the work activity program and move them into a separate program, and so they are not counted in the numbers that you would see in tanf. now, in very tight economic times, that becomes more and more difficult for the states. >> what reforms, if any, do you think congress ought to make to tanf in order to ensure that states are more proactive in assisting families as they prepare for and find jobs? are there things we ought to be doing that we're not doing?

>> well, i think back to the point that sounds very simplistic but is really complicated, of course, is the idea that to start first very clearly with what the goals of the program, and making sure those are still the goals that you want them to be, and then looking at the incentives and the way that the success of the states are measured. having one measure and one measure that doesn't really tell you very much about whether the states are actually achieving what you hoped they would is not going to encourage states to make changes. if you were to think about some different, a basket of measures or measures more focused on outcomes or that gave states more flexibility for families that had larger problems or more significant problems, those are the kinds of things that we've seen make a difference when you're using a block grant, where there's a lot of flexibility but you still want to hold a state accountable.

>> i think there are three issues following up on what ron said. i think making more allowance for opportunities for education and training that may extend beyond some of the limits in many states. i think looking at coordinated programs that would increase father involvement with families. and third, looking at ways in which to expand people's ability to get child care during the time they're trying to enter the labor force, and to keep that child care for some time afterwards. >> let me ask this quickly, one other question. that has to do with there was a gao report out here recently that suggested that there's about somewhere in the neighborhood of $4 billion or north of there in refundable tax credits, payments made to people who are claiming children that don't live in this country and are here illegally, and there's some legislation which i'm

co-sponsoring now that would require greater documentation to prove that you're here legally in order to benefit from that program. are those the types of reforms that you would support, that you think make sense? obviously this is something that you've got people who are not here legally benefiting from a program at great cost to the taxpayers. anybody want to take a shot at that? >> yes, i would support something like that. the eitc despite being a great program as we discussed several times during this hearing already, has a very high whatever you want to call it, error rate or some of it is because i think legitimate mistakes. but this case where people are undocumented and claim an eitc, i think that it's illegal under the current law and we ought to have a way to detect it. the problem with the solutions for eitc for this program and other problems because we spend billions in error on the eitc.

the problem is trying to figure out a way to get enough information about each individual case so you can make a judgment about whether it's legal that they're claiming the benefit. it's a very expensive, hard thing to do. i once had i think a two-hour meeting with irs specifically on this issue about what we could do, and eventually, virtually nothing was done. we discussed all kinds of ideas but they were all very -- they would have greatly increased the workload of the irs. >> thank you, mr. chairman. thank you all. >> thank you, senator. i thank you, all of you. this is very provocative, very informative. the burden is on us to make sure the next steps are instructive, positive, but this has been very, very helpful. i've learned a lot, i know, from this hearing. thank you very, very much. this will help us move toward reauthorization of tanf and ancillary measures. thank you. hearing's adjourned.