so that was very successful and subsidized by atc and so forth. but then in dra, i think we made a mistake. we tightened the screws on the states. i'm not sure why we did that. states were performing fairly well. and we put a lot of requirement in the dra that i think it's very difficult for states to meet. and at the same time, i would even question -- and i hope the committee looks into this carefully -- the block grant structure because as gao points out -- and they do have previous reports that show how that money is being spent -- we allowed the states to spend it any way they wanted to as long as it's on low income families. they couldn't buy -- build bridges and so forth. so i think that's an issue too. if we were to do the kind of things we're talking about here, that is to provide more work services for people who are really disadvantaged, those would be more expensive than what the states are doing now, they would have to get that money back, and they would have to get it back from their own state programs. and that's very difficult.

this is what the committee should look into. that's a big issue. secondly, the work requirement is so stiff and the accounting is so green eye shade, i've recently had the experience i'm calling all the state tanf directors to find out how their programs respond during the recession. amazing to me over half of them said that the paperwork burden for accounting work and hours is so heavy and so difficult that it distracts us -- now that's a typical excuse that a bureaucrat makes, but i've heard it so often, and it does make such sense that i think there are issues here and we could do something at the federal level to do something about these work requirements and get them above -- that there would be more than 70% of the caseload or something should be achievable, that they're doing at least something. but not meeting the work requirements as they're spelled out in the current regulations and statutes. >> in your written testimony, you describe the need for fragile families to form connections both, quote, tight,

unquote, connections to an informal support system and, quote loose, unquote, connections to community and civic organizations. what advice do you have to this committee or for this committee on policies that can promote these type of connections? >> i think there are two different approaches. >> you need to hit your -- >> the microphone, please. >> i think there are two different kinds of approaches to take in looking at how you help families become seated in the larger societies in way that they can reach out for assistance and receive assistance in different ways. one is to support them in the kinds of tight networks or networks that are likely to actually deliver help in emergencies. i think that's one of the reasons why i'm very interested in programs that would encourage the nonresidential fathers of these children to stay involved,

to become more involved rather than be distanced in some cases by the policies that we have in place. so i think there are ways of using public housing policies, child support policies, to encourage that involvement rather than in some cases discourage it. >> okay, ms. brown, when states describe how they spend their welfare dollars, a significant percentage of dollars is spent on services and activities that are characterized as, quote, other, end quote. can you comment on what these, quote, other, unquote, activities are and what challenges for policymakers are presented by having so much of the tanf expenditures unknown and what suggestions would you make for policymakers to achieve greater transparency on tanf expenditures? >> we're actually doing some work right now to try to tease out all of the things that are spent through the tanf block grant that are not cash

assistance, but we know in that other category that a large portion of that is child welfare goes to services for prevention for agencies that are trying to serve high-risk children and families. >> okay. >> and i'm sorry, i missed the second part of your question. >> the second -- what suggestions would you make, you know, for policymakers so that we can get greater transparency on tanf expenditures? >> well, i think, you know, the tricky part of that is we've heard already that there's a risk of expecting too much reporting and too much detail going too far so that the states feel that there's a barrier or an encumbrance, but i do think that as long as -- right now 71% of the resources for the tanf block grant are not spent on

cash assistance. i think it's really important that we have a better understanding of what those resources are spent on. we're hoping that we can contribute to that with this work we're doing right now. >> that's my point as well. thank you. thank you, mr. chairman. >> thanks, senator. >> dr. haskins, i understand your main point that you're making here is that the best thing that we can do with this tanf funding is to subsidize earnings, is that accurate? >> that's one thing we should do, but i think training also plays a role. job search has been shown again and again to be effective. we should have more effective job search programs. and the distinction between job search, simply looking for a job, which usually includes some tutoring in how you conduct yourself and how you dress and so forth and having a nice resume, and training, there's a continuum here. and we need more training.

we need more preparation for some of these mothers to do well in the labor force and the same thing after they get in the labor force to advance. that's been a very disappointing thing to me is that many of these mothers do not advance. so tanf should be used for that sort of thing. it's not just subsidized income. we have lots of subsidies of income. >> i guess what i'm trying to understand is whether it would make sense in this reauthorization that is contemplated here in the next couple, three months, for congress and for the federal government to essentially say, okay, this is a block grant, but you've got to spend a certain amount of this block grant, each state has to spend a certain percent of it doing a certain set of things. i guess ms. brown, as i understand your testimony, you're saying that 29% of the dollars that states receive from

the federal government is actually being spent in cash assistance? >> that's correct. >> so you got 71% that's being spent in other things and you're trying to figure out exactly what all those other things are and how much in each. but if there are some things that we think are high priority uses and most beneficial uses of this money, shouldn't we say to states, 50% of your money has to be spent either helping people get jobs -- i mean, you know, or job training or cash assistance for people who are earning in the labor force or some set of things? dr. haskins, do you have a point of view on that? >> yes, i do. i question putting more requirements on the states. we gave them a block grant. the idea was the states would be responsible and handle the money well. and now there's some indication, well, maybe they didn't. maybe they spent the money on child protection.

this committee has jurisdiction over several open advertisement programs for child protection. so it makes sense to put more rules on the states, but more rules lead to more paperwork. i'm not sure. i think it's more important to get the incentives right. >> but i think one of you testified that the caseload, the tanf caseload has decreased in some states during the recession. that to me is a sign that this thing is broke. i mean, if this is a program that's supposed to be helping these folks, you shouldn't have folks dropping out of the program when the economy goes in the tank. so isn't some change in the program essential as part of a rewrite here? >> yes, yes. i'm not depending the status quo. i'm just worried about how you do it.

some states feel that people ought to work and they ought to look for work intensely and if they don't find work, it's their fault. i mean, that seem to be the essence of their policy, during a recession. people do find employment during a recession. if we want to have the states spend more tanf dollars during the recession on tanf cash assistance, which is the way we originally thought of the program. we put a contingency fund in the original legislation was supposed to give states more cash during the recession to pay more benefits. but somehow in some states the work message is so strong that the states are reluctant to do things to attract people back to the rolls. plus they say that encourages dependency. you have a real philosophical conflict here. and if you tried to do, this i can find ten governors who come in here and say, no, don't do it, that's an outrage. that doesn't mean you shouldn't do it. but i'm just saying there is a real difference of opinion here what the real cause of why people don't get tanf benefits. but yes, i think you ought to look at that. and i personally would support

something that would provide -- that would cause the states to be more responsive during a recession because they were not very -- many of them were not. >> dr. lein, did you have a point of view on any of this. >> i think also -- if you look at -- sorry. we need to look at how tanf operates in a period when there simply aren't enough jobs. and the people that are going to be out there job hunting are going to find jobs in the informal economy. they're going to find jobs that may not count in tanf regulations. and it may take them longer to find jobs. >> the period where there aren't enough jobs may be the new norm. certainly we've had that circumstance for several years since this recession started. >> and so we need to take a hard look at what we want people to do if they are not finding jobs. and what they're doing now, i suspect, is -- i don't think we know for sure, but i think one option is that they're not

joining tanf because they know they can't meet the requirements. >> my time's up. >> mr. chairman, could i have 20 second to add something to this? it's extremely important. when this committee and the congress passed the emergency fund during the recession, it gave the states $5 million in tanf funds and gave them the options of basically creating jobs by subsidizing jobs in either government or private sector, which had never worked before but the states created 260,000 job. how did congress reward them? when the time the emergency money came to an end, poof, it was gone and the state programs have fallen apart. but that shows you the states are highly motivated to try new things and including even the very complex issue of subsidizing jobs in the private sector. 260,000 jobs is one great achievement. >> senator cornyn. >> thank you, mr. chairman. i appreciate you holding this very important hearing.

mr. haskins -- dr. haskins, i've been following some of your work with your colleague isabel sawhill at brookings. and i'm intrigued by something i want to quote back to you. and that is you said that if families follow three basic rules, that they are virtually assured that they will avoid poverty. complete at least a high school education, work full-time and wait until age 21 and get married before having a baby. based on analysis of census data, you conclude that if all three of these rules, people follow all three of these rules had only a 2% chance of being in poverty, and a 72% chance of joining the middle class. conversely, these numbers for those people who violated all three rules would elevate their chance of being poor to 77% and

reduce their chance of making the middle class -- making it to the middle class to 4%. so if it's that clear that those three things would be -- raise the likelihood of success of people leaving poverty and joining the middle class, what can the federal government do to help? >> first of all, we did something terrific in the '96 welfare reform legislation because we strongly encouraged work and i think we have to maintain that message because keep in mind, the poverty rate among kids in single parent families and that's where the highest poverty rate in the country is, is still lower now after two recessions than it was before welfare reform and that's primarily because those mothers are working. and their work rates are still about 20% higher than they were before welfare reform so the work message, it was more than just welfare reform that did it but the work message has gotten through. that's the first thing.

second thing is, non-marital births are a huge problem in the united states and we're trying, we're doing some things but i think we could do a lot more. i've suggested things in my testimony. our teen pregnancy programs, avoiding teen pregnancy, are quite good, and we are expanding those. the administration now is doing evidence-based implementing about $100 million a year and i think that's extremely important. the house tried to kill it last year, the senate saved it. the house tried to kill it year before that, senate saved it again. i think that's an extremely important program because we're still learning about how to reduce teen pregnancy and there are several programs, at least two of which have good evidence national campaigns about the importance of comprehensive sex education, especially addressed to males for the use of condoms when they're engaging in non-marital sex and they don't want to have a baby, and expansion of medicaid to women who are not covered so their birth control is free. both of those have been shown to

produce big benefits that outweigh their costs. so i think it's another thing the federal government can do. i would like to see us expand work requirements but it's very sensitive, i'm sensitive to the point senator bingaman made that work in the united states, we have the lowest percentage of people employed that we've had in decades, probably, maybe even forever, and maybe that's the future. who knows. we're not recovering from this recession very well but there's still a lot of people getting jobs at bottom so, we should do everything we could do to encourage employment. i think we should look at the food stamp program and at the housing program because they both have weak to nonexistent work requirements, and that concerns me. i think we might be able to make some progress there. >> when i was attorney general of texas, i was responsible for child support enforcement under the title 4d program which of course assigned to the state attorney general the responsibility to enforce the child support obligation, establish paternity where

necessary, but could you speak, dr. lein, am i pronouncing your name correctly? i know you spent -- had a distinguished career at the university of texas as well. >> absolutely. >> i would be interested in hearing from each of the witnesses or any of the witnesses that care to comment about what should the federal government continue to do when it comes to enforcing the child support obligation and assisting the states? i'll just close before i ask you to answer it on a quick story. i was in el paso, texas and got out of an airplane and a gentleman approached me and told me you put me in jail when you were attorney general. i didn't really know what to expect next. but actually, what happened, he told me, he said when we sued him to force him to pay his child support, his wife had previously denied him access to his children, and the judge at the same time ordered him to pay child support, ordered his

ex-wife to order him to see the children, so he was really -- the child was a two-time loser. didn't get the financial support, didn't get the love and support of both parents. ironically, the story ended on a happy note. he told me once the judge ordered that, he said you know, we're back together again now. had a happy ending. there are not enough happy endings in this scenario. but could you comment, as we approach that function that the child support enforcement function, what do we need to do differently, what do we need to continue to do that we're doing right, if you would address that, please. >> sure. i think in texas, it's been interesting because they've done some very interesting experiments on encouraging payment of child support and those experiments include things like punishments on the one side for not paying, but also, a lot of assistance in some of the experiments for finding the job,

for getting placed again in your community and in jobs, particularly if you've been jailed or imprisoned in the interim. i think the child support payments need both of those. you can't just punish nonpaying fathers if they can't get jobs and they can't earn, but you also don't want to earn them without giving them a sense that it's really required, that they pay over to their children. so i think setting up those kinds of programs that do both, i think also, other than having a threshold, having some of the fathers' money that pays go over to women who are on welfare even if they're still drawing welfare, so that almost immediately, that family system sees the benefit of fathers paying into their system, rather than setting up a system where both parties to it might feel they're better off if the father pays under the table, takes it out of the state oversight. >> thank you very much. senator nelson, you're next. all right.

senator cardin? >> thank you, mr. chairman. i very much appreciate this hearing. dr. haskins, it's nice to be with you again. i served on the ways and means committee and went up against dr. haskins 16 years ago, and lost most of my arguments and provisions, but joined the majority in supporting the tanf legislation 16 years ago and i think it was the right decision to change the program and make it focused on getting people out of poverty and getting them employed. but i do think we have to acknowledge some concerns. senator bingaman already mentioned some of those issues. in a recession we would expect states to be able to respond by putting more cash out there, when the job market is more difficult, but we know that during this recession, the states didn't have that option in many cases.

they just didn't have the fiscal capacity to do what we would have liked them to do, it would have had to cut other programs and they weren't prepared to do that. so i do think it does raise an issue as to how tanf works during recessions. secondly, we can all point with pride the number of people who are off cash assistance, but i think we also have to acknowledge that during the same period of time, using the mid '90s as our base, the number of children in poverty has actually increased in america, over a million more children in poverty. and our objective was to get people out of poverty so i think we need to figure out more effective ways in order to do this. i also want to talk a little bit about the issue, dr. haskins, you raised on the requirement on our states. this was supposed to be a partnership with the states, giving them the ability to innovate and move forward, and i think in many cases, we have not let that happen. there was testimony on the ways and means committee recently by sean king simms from kentucky

who talked about how the 30% participation rate for those on vocational education has restricted that state and what it wants to do to get people employed. we all know that education is critically important. the one year limitation, there are many programs that are two years. i just visited some in the community colleges of maryland that are two year vocational education programs and yet, a person who is participating in a program would be prevented from going beyond one year during their lifetime. so i think there's some restrictions and i also point out one of the base we had back 16 years ago was whether the test should be how many people go off of cash assistance or how many people end up employed. and we opted for getting off cash assistance as the test rather than using those that are employed. i guess my question to the panel is, i think the states have 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. >> there are other senators who wish to speak, so 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.