time is secretary-general colonia came to the atlantic council in 2009 he said something that struck me at your original remarks. asked to set up the atlantic with one foot in europe and one for north america. when europe and north america come together, i am comfortable. the nature of takhar, i'm the one that feels pain. so if you think back over your tenure as nato secretary general, what it's been the biggest challenge for you to manage as someone who represents both sides of the atlantic at one time? >> i haven't felt pain. i'm quite comfortable. because we have i would argue we have seen the closer transatlantic relationship during my tenure as secretary general. you have of course have of course seen our operation in afghanistan and as jim jones

mentioned in his introduction tonight, we decided on a search in late 2009 was followed by a europe pn commitment and also the europeans searched in libya 2011. he showed the europeans take the lead actually for the first time in the history of our land. and i have experience during my tenure as secretary general that we had more political consultations in the nato council then we had in the past. also following the new strategic concept in which we declared that any ally can request consultations on any issue of adventurous spirit so we are

caught a lot of consultations also on issues where we could have been the intention to intervene as the nato alliance but we have seen the north atlantic council essay for a for a very intensive transatlantic dialogue. so both of her speak about operations in the race week about the transatlantic dialogue, we have seen a closer cooperation developed during those five years and that is why i don't feel pain but i'm quite comfortable. >> well come i apologize to the city whose questions questions i was not able to take. i want to remind those of you watch it online if you want to join the secretary-general on wales and you are under 35, we are recruiting right now for a nader future leaders who traveled to the summit in september. please future applications that www.atlantic council.org.

thank you, mr. secretary-general. your team has been perfect to work with. it is a joy to have you here on the atlantic council on the eve of the summit. thankjoin me in thanking the secretary-general. [applause] >> ladies and gentlemen, please remain seated. [inaudible conversations] >> e-house hearing on helping working families out of poverty. the closing session of the national governors meeting and then a&a with george will. >> the senate homeland security and governmental affairs will

hold a confirmation hearing for nominees to serve on the postal service board of governors. airsoft patrick donahue's announcement it will consolidate up to 82 mail processing units. live coverage begins after a clock. -- at 3:00. >> you can keep in touch with current events from the capital using any phone, anytime with radio from audio now. simply call doubt -- and simply call -- every weekday, listen to a recap of today's in events on washington today and you wonder audio off the sunday public affairs beginning at noon eastern. call --

>> on wednesday, the house budget committee held a hearing to look at charitable programs created to reduce poverty. witnesses included representatives from catholic charities and americaworks and a woman who shares her personal story. this is under two hours. i want to get started. this our fifth hearing on the war on poverty. we have heard from a number of voices, policy experts and officials and today, we are going to hear from people in the middle. into the private sector who worked with the public sector. people who coordinate. we are going to hear from an especially important voice, mrs. tianna gaines-turner. first, i was happy to meet

tianna. we got to meet earlier and i am happy to hear her testimony. i will quote from her previous testimony because i think she hit the nail on the head. "poverty is not just one issue that can be solved at one time. it is just not an issue of jobs or food or housing or assistance and safety. it is a people issue a you cannot slice people up into issues. we are whole human beings. poverty has to do with a whole person who is in a family, a neighborhood. " i cannot have said it better myself. that is right. for too long the federal government has treated people as numbers. that is why i'm excited to hear from heather reynolds. she is doing great work in fort worth. she is putting together a pilot

project about expanding opportunities for working families. ms. reynolds program sees people as a whole human beings who deserve time and care and not just a client to usher through the door. and the results speak for themselves. in 2013, 90 percent of the people and the refugee program but came self-sufficient within six months. i also want to welcome jennifer taylor. -- tiller. work first and accountability. america works get paid only if they succeed. i cannot find a better definition of success than their own. they say successful is moving to employment and maintaining a self-sufficient lifestyle. i think we should insist on the same kind of accountability on our federal programs. one last thing.

as a previous hearing, some of my colleagues kept asking if they received federal aid as if it would undercut their testimony. the point of these hearings is not just to question whether the federate -- federal government should help but how it can best help. i hope we can listen and learn from our witnesses today. each of these three legs have so much to open. and i want to recognize the ranking member. >> thank you, mr. chairman and i want to thank all of the witnesses for being here today. this our fifth hearing. the question of how we can better address poverty in america. as i have in the past, i want to start on two points of agreement. first, the best anti-poverty measurement is a job. a job that pays a living wage and can support individuals and a family. and second, if there are better ways to channel resources to get

better results in terms of our fight on poverty, we welcome that conversation. and case management may be a very successful way of doing that. while it is our fifth hearing we still have two -- we still have a huge disconnect. the republican budget that passed out of this committee and house the dramatically cuts funding for programs that help people climb out of poverty. and mr. chairman, the fact remains that the budget you presented with a cut the areas of the budget that would help provide the kind of case management we are talking about. dramatic cuts of the discretionary part of the budget funded at lower than two times the sequester cuts and deep cuts in programs like food and

nutrition. we wanted to have a discussion here about how to better use existing resources to help people climb out of poverty. we welcome that conversation. what we do not welcome is using that conversation as a pretext were means to dramatically cut funding for this program whether medicaid or food and nutrition programs. and as chairman indicated, we have had witnesses who have received important funding. there is no disagreement here that the federal government can play an important role in helping people climb out of poverty. but, it is hard to do that at the same time that you have a budget that dramatically cuts funding for the programs. reform, better use of existing resources to help people and

more effective results -- yes. a conversation that does not answer the question about how cuts on anti-poverty programs will advance the goal is a something we will continue to ask about. finally, as i joined the chairman and welcoming all of the witnesses, i am pleased that ms. is gaines-turner is here. she is the first of five hearings who herself has experienced the struggles of poverty and the effort to climb out. i think your personal testimony is especially important in that regard. as you state in your testimony one of the keys there is making sure that work pays. when you have a job you can lose have a job that supports the family. one of the things would've been trying to do in the house is at least raise the minimum wage from its current $7.25 an hour

which is lower purchasing power than when harry truman was president. would like to raise it to $10.10 an hour which does not provide a living away job at least provide greater opportunities for people taking care of themselves and their families. we are still hoping to have a vote on that and many other issues that support work. we are pleased to have all these witnesses today to talk about how we can tackle this important challenge before us. thank you, mr. chairman and look forward to the conversation. >> thank you. to measure every win is a knows it is against the law to provide false testimony, we have began a new practice. this does not reflect any guest trust we have in any particular witness. we are taking this step

because of guidance. i would like to ask the three of you if you do not mind standing if we can swear in our testimony. please raise your right hand. do you solemnly swear or affirm the testimony you are about to give will be the whole truth and nothing but the truth. please take your seats. that is a formality we have to engage in now. heather, white don't we start with -- why don't we start with you and move this way. >> thank you. chairman ryan and ranking member van holland, thank you for the opportunity to speak with you. my name is heather reynolds and i am president of catholic charities fort worth. let me get right to my main point. poverty is complex and often cyclical. parents have poor children and poor children often be, poor parents.

the cycle continues unless it is broken. case management is the critical element in moving someone from government dependency to self-sufficiency. that is why we believe that case management has got to be an integral part of the conversation on how we reform our approach to poverty. first, case manager allows us to work with that client and individualized away. every day in fort worth, texas, we have over 300 people coming to our organization for help. each individual's poverty looks different but we mainly see three main types. chronic poverty which results from a combination of factors such as age, disability, or mental illness. people who will need safety net services throughout the course of their life. the second type is situational poverty. cost of idle divorce, unexpected health care expenses and the

loss of a job. this type is often the most temporary ad with a quick intervention, families can be put back on track. the third type is generational. people in generational poverty are those what had two or three people living in poverty. it is passed down from parent to child. it is a mindset of living in the moment and be proactive and setting goals and planning ahead are not in the reference. understanding is critical for understanding how to combat it. case manager is most needed for those in situational and generational. those in generational poverty need a deeper level of case management because it requires a mindset change. second, case management allows us to serve in a way that is holistic. in most cases, people come to capital -- catholic charities face complex challenges.

the way the federal system is designed, they receive services for all of their needs independently. case management helps transform intervention from an array of standalone services to a comprehensive plan to get families to achieve their fullest potential. if active case management is a process in which they work to holistically move a family ford without -- ford out-of-pocket -- foreword out of poverty permanently. we have a successful federally funded and type poverty -- anti-poverty program. our success a of moving individuals from poverty is a high because of case management. in 2013, 90% of our clients became self-sufficient within six months. from my experience, many federal

programs are not designed for the end goal. how can we set our goal at ending homelessness and count the number shelter beds? how can we count the number of homeless families and achieve it by counting the number? at catholic charities, our main partner is the economic opportunities at notre dame. our program aimed at persistent and agreed among low income statements -- as students. this is achieved through case management and emergency financial assistance. a pilot is tracking outcome for randomly assigned to students receiving surfaces in a control group of student. in order to measure the true impact of the services.

academic performance educational attainment and employment and earnings. the results indicated that students receiving case management services not only averaged more credit hours and in the treatment group but were more likely to persist in their education. case management was the difference. there's not a better way to get somebody out of poverty is to help ensure they graduate with a degree that can get them a job that pays them not enough to survive but to thrive. poor parents have poor kids and more often than not, poor kids become poor parents. the cycle continues unless it is a purposely broken. case management is the critical item of moving a family out of poverty for good. thank you for your time today and thank you for what you are doing to bring attention to the

important issue of ending poverty. >> thank you. >> america works is a network of company including americaworks of washington, d.c. have a managed app and retention programs throughout the united states. under the mission of changing lives by lifting them from dependency and to employment, americaworks have place over 400,000 people into jobs nationwide. americaworks rapid attachment work program allows individuals to be place quickly in the workforce. we believe will work should be the central focus. wrap around services but not limited to mental health, shelter services, childcare care, and education endeavors are simultaneously. over the years, americaworks has taken on total social programs that has caused taxpayers billions dollars.

we cook rate productive citizens -- we could create productive citizens. americaworks pioneered the work first program. this has been critical to the racing years -- erasing years which seldom leads to jobs. states were limited to a small percentage of people. this forced employment first and

training later or simultaneously for upgrading and improving prospects. americaworks haiyan eared government contract that is not commonly used. -- pioneered government contracts that is not commonly used. best to make a road it is the root -- betsy mckay wrote it is the responsibility. government involvement should not stop at the management of funding and programs, it should champion personal responsibility . personal responsibility act to encourage employment as well as hold precipitous -- participants accountable. in order to successfully move individuals from dependent too

independent, we must revisit the premise. what is the definition of success for a recipient? it is an individual moving to employment maintaining a self-sufficient lifestyle, and progress in their desired career trajectory. charlenes shares her story and i would like to share it. my name is charlene dorsey and i've been a part of it for 2 years. when i first started, i was not focus on my career goals. after several months of "messing around," i came to the realization. tanf would be cut soon and i cannot rely on this as a way to support me and my children. i got tired of my life south of the dependency. after spending with the director i decide to take the

program more seriously. i work very closely with the staff at americaworks and put my energy into gaining employment. within one week, i had a job. i started working as a cashier. when i was searching for employment, food service was my last resort. after work for a few months, i realize i loved my job and had the potential to grow within the company. i have been working there for nine months in him the training program to become a manager. i love my supervisor and staff i work with. i enjoy getting up and going to work each day. even though food service is not in the fieldwork i was initially interested in, i came to berlin as the nation that work is it better -- i came to the realization that work is better than depending on tanf. i am so happy at my job now and i'm looking forward to all of the opportunities i will have to advance my career. i am so grateful for the assistance that staff gave me.

they were patient, they helped me and providing case management services. she has not received tanf benefits since october 2013 and she is near completion of her management training program. we continue work as long as they're deemed eligible for employment. thank you for your invitation to speak. >> ms. tianna gaines-turner. >> good morning. thank you very much for inviting me. my name is tianna gaines-turner and i'm a member of a witness to hunger. let's get down to business. i will be talking about different things that are important to me and my family. let's talk about jobs and wages. the fact it is called minimal

wage is a problem. we need to be where people do have a living wage. we need to make sure we have paid sick leave so a mother or father or a person as a caregiver can take off of work and not to worry about losing their jobs will stop and address affordable childcare for those who have children and those entering into the workforce. safety net. where do i begin? food stamps. the food stamp program is very important to me and my family. nobody wakes up in the morning and say we want to be in poverty. we do not want to wait in a food pantry line to get to the front and tell there is no food. it helped cement my husband make sure we can feed our children. nutritious and adequate food. wic is another important program. i know that firsthand. with twins my twin boy had

open-heart surgery. i was able to breast-feed a give a pump which i know i cannot. health care. if you look at the screen, that is my son. i thought it was important for people to understand the many struggles found have to go through. i'd to visit minutes after my son suffered his -- i took a visit minutes after my son suffered his second a seizure. it is not easy to wake up every day and not know, did you pay the phone bill or pay for medical? you have constant challenges. i am proud to sit here and say my mother was never on foodstuffs when i was a child. i watched her struggle every day. i feel light right now we need to have a conversation on the things that are wrong.

why is it that when a person enters the job force, if they made $.50 over, their food stamps are cut and in their tanf is taken away. technology why is it i go to the. office and they get a receipt and they tell me they have gotten my food work -- my paperwork. a month later and my caseworker has no knowledge. we need to make sure we get the caseworkers so we are not treated like unhuman as individuals and understand we are here for a moment, not for a lifetime. educational programs. we need to make sure we do not push people into these ready to work programs that simply do not work. we need to make sure we do not put people and to nursing programs to become a cna and

cannot compete with the others in that category. let's make sure it is ok for me and other people on public assistance to be able to open up a savings account so we can save money to on our own homes and safe for our children's college. instead of a caseworker say because you're of a savings account, you are not eligible. i feel light right now in america, there should be no child that goes hungry and no one that will have to see the troubles every day of not knowing. this photograph right here is a photo of my children. my children are everything to me. i would like to say we need to break the cycle. we need to make sure we all remember what the american dream is providing family values. i am not a number or statistic or food stamp recipients. i am an individual lives in the inner-city we just all happens

to be writing now struggling. just as so many americans are struggling. we need to get back to the core values of remembering we are people. not looked at as somebody on welfare and is lazy and wants to collecting benefits. i never wake up every day and say, i want to be on public assistance. this a picture of my husband and children on father's day. as you see behind me, my father is behind me and use a strong african-american man who can relate to everybody in this room and gets up every day and goes to work. he made sure he wants the same thing that you want for your children. safe and affordable housing. there should be no decision made without someone sitting at the table who was going to struggle. thank you so much. chris how old are your kids?

>> my twins are six and my son is 10. >> i want to start with you tianna. i am really interested in what you mean when you talk about the cliff and you said before, you have given this example about the babysitting for a friend for $40 a you can you -- you can lose your a welfare check. a lot of these programs are layered on top of each other not connected. you have the situation where you could have a cold cut off all benefits if you earn some money. give me a sense of how you see this clip and what it does to people and kind of the wrong incentives it gives and more importantly, just a better way of coordinating? should we have a smoother system so that people do not face these cliffs? what kind of decisions are they forcing upon people?

>> it does not encourage people to have saving accounts. they put their money under mattresses because they're scared their caseworker will find out. i was getting $793 in food stamps. once i began working and the first cut went through, i went to $220. would a second income went through, i went to $200. >> did you make more with your paycheck? >> no, i was working. i do not want to be on cash benefits. i wanted to go out there and work. as soon as i got right there to start being able to put a little away and do things with my children and put them in camp, i was cut just like that. i feel like we should padden the

program and make sure just because a person may make tenses over the guidelines, they should not lose everything right away. there should be measurements. you should measure and see where a person and not push them to get a job get a job. once you get a job, you lose your childcare and cut off all food stamps. it assumes i air think is right from the media. -- it seems like things are pulled from underneath you. >> i am very intrigued with the model that catholic charities has done with case management. walk us through this. what does it look like. what is the relationship between case management and the client/recipient? what ratio you strive for? how could the federal government do a better job as encouraging? the biggest concern is it is cookie-cutter, it's cold, treats

every body the same. it needs to be more customized and human. you are doing that. what does it look like? what can the government do? >> thank you for that question. making sure you will higher private organizations hiring plate -- case manager that have a heart for the client and a deep understanding of how to work with folks of for a mindset change but also creating this idea you can get out and giving them the encouragement every step of the way. to be successful as an assessment of understanding a client and then a plan developed to take into account what are your strengths? sometimes we treat clients like they are full of deficits.

what are your strengths, what access do you possess and what did you needed to gain? we have been moving forward in a new highlight, what does success really look like? what are we trying to achieve? we made a change internally, making a way so you actually support your family and not on any public benefits or social benefits. have three months of savings and no debt. the biggest thing the federal government could do is allow us to serve it more holistically by allowing us to pull more together. and for case management we need more time. i quoted the refugee success of six-month mark, those folks are a very unique population. for us and generational poverty, we needed time to work with folks. >> like what? chris about a two-year process.

-- >> about a two-year process. cost effectiveness of putting the money into case management and then savings with a decreasing and public benefits makes it a very economically -- >> the key is to customize? there are people who are situational and that could be quick, right? >> refugee situational. >> generational, you need more time. whether an associate degree or ged. when we see customized case management what we should be thinking about is this person might have transportation or daycare problems and that person might have education and food problems. being able to customize the benefit to tailor their specific needs. chris absolutely. if you are looking at you want to get somebody out of poverty your goals are how to plan and

leverage and figure out where there are opportunities that help them build so they can accomplish. many times if it is something like an associates degree or certificate, that takes time. >> the problem you have for the federal government is a patchwork quilt of programs that are out there with a different cut offs and requirements that you had to spend this time navigating that. if you have more flexible benefits you could customize that's what you are trying to do? >> absolutely. they may qualify for something else. >> let me ask you the last question. i visited your location in d.c. it is amazing to watch for the people leave with a job and get on the ladder of life. if there something you could do to change the federal aid

system, what would it be? i know you afford with counties and cities, if there were one or two things you can change to facilitate the transition, what are the things you would do? >> thank you for your compliments first off all. i mentioned accountability and best champion of everywhere. and when it comes to things like time limits and at heather was saying with case management and ensuring it is individualized and at as what we do. everybody has a different set and educational set and people are from all different walks of life from where they are in the nation and we have to make sure everybody is getting that service and we will continue to do that. championing that and accountability would be a great

benefit. >> lets me get back to measurement. how do you measure success? we have long complained we have input measurement system, the war on poverty for a lack of a better phrase. we measure input and how much money and how many programs we are creating versus outcomes. how many people are we truly getting out of poverty in a lasting way. it is that outcome measurement that is new. you had of his institute at notre dame doing that, not only there but around the country. what are some of the keys of measuring success? what does it look like? is it the original design of the program that is key? we want to have a system but we do not want to chase statistics and metrics and things like that. we do not want to chase some

spreadsheet. so a bureau cap -- so a bureaucrats can say my job is done. our they in a self-sufficient lifestyle is a want to obtain? >> one of the most important ideas is not just a evaluation and outcomes but the research. that is why we are partnering with notre dame. what they're able to do, we have a control group and treatment group. most of us in the nonprofit sector are saying no to people every day because the resources are limited. we have a control group that we can provide. what happens is we bring the economies of notre dame and what they're able to do is not only see if the program matters because if they do not have the program, what would have happened? having a treatment and intervention group allows you to tell if not for the intervention, the famines would

not have an proved. federal investment into more rigorous research and evaluation with a large sample sizes and if we are seeing something that is working, how do we scale up to a national level? so we can see if it works and if it doesn't -- >> that gets into the program that is proven to fail. >> that is a right. >> mr. van holland? >> thank you for your testimony today. it has been very instructive. i want to start with ms. gaines-turner antiwar for being here and i want to thank congresswoman barbara lee. -- thank you for being here and i want to thank congresswoman barbara lee. we're asking if you were talking about, if you put aside something to save a you may no longer qualify for food and

nutrition benefits. for benefit of our colleagues, we do see the clips that is something all of us would support especially on the democratic side. it may end up costing more money. what you are saying and said being cut off from food and nutrition programs we do start saving, you would be allowed to save and also receive your nutrition benefits unto you get to a point where you're family is truly at a living wage. >> exactly. i want to be very clear on what i am saying. i have been hearing a couple of things about generational poverty. i feel like that's the main reason i am sitting here. you want to break the cycle of that. the federal programs running right now are not working. i do not want a status to be

involved and tell me when i can join a certain program. i feel like that is not the way to go. accountability, we need to hold a big company like walmart and target accountable for not paying their employees enough to where they can have medical benefits. a lot of these big companies limit their employees to a certain amount of hours so they do not have to offer medical. we need to make sure they have paid sick leave. i want to make sure i cleared up a couple of things. i do not want anybody to misconstrue what i was saying. >> thank you. just on the budget point we are the budget committee, addressing this issue's require resources.

to reduce what the chairman said the cliff may involve more resources. at the same time, our colleagues have proposed a budget that allow deeper cuts. it is important to take the comprehensive review of this. while it is very important to figure out whether case management is the best approach of all of them require resources. some require more. and some may require more up front to get savings potentially down the road. if you could talk a little bit about the impact of the affordable care act has had on your family. i saw that in your written testimony a you may not have had time to talk about in your oral testimony. can you talk about how it has provided additional help for you and your family? >> the affordable care act has definitely helped me and my husband and i am appreciative.

for a long time, i was paying out of pocket to go to the doc are. i paying $75 for a doctor visit and getting a prescription, i had no medical coverage. i pay 75 does to go to the doctor and now i have to figure how i will pay for the prescription. i will go about getting the adequate medical because i did not qualify. only my children qualified. now that me and my husband are working, we are both working part-time jobs our hours fluctuate. i was able to get quality medical through obamacare. it is very important. we need obama care. i know right now people want to cut obamacare and they are challenging to look into cutting and i would like for you to look at me and my husband as a prime example. if you cut that program, you're cutting away to make sure that i

am here and do the job i need to do as a mother. >> i want to pick up on a point was that you are working in now correct? and your husband? >> correct. >> your combined income is still not sufficient to provide a living wage for a family. >> correct. >> what would happen -- while you are working, you are receiving food and attrition? what would be the impact on you and your children if you were to lose that food and nutrition? >> it would be a bigger struggle. i am already struggling unknown to pay the rent. the bills coming in, gas, water electric. if i lose the. , money taken away from the bills and my children to buy food. i do not know how much more i can say is.

no one lives in poverty once to stay -- wants to stay on government assistance programs. we want to be independent and work are hard and believe in the american dream, if i get up everyday day and we work and my husband worked, will have the same jobs, benefits, wages as everyone else. that is the most important thing to us. i am -- a lot of people say well, they do not need food stamps. it is not working. this person is abusing this program. let's not go there. there are a lot of different programs we can talk about that have been abused that have been passed through. and they are not held accountable. >> i thank you for your testimony and why it is so

important to have somebody who is currently struggling with these questions and the impact of some of the proposed cuts would have. mrs. reynolds, if i could ask you and thank you for the good work you do around the country. you mentioned that the larger share of your federal funding from refugee assistance area. i would like to take this opportunity to ask you for the status report of your efforts on refugee assistance to stop we are currently facing this crisis, this border. i want to read for the benefit made by national catholic charities, a little earlier. one year ago today the senate passed a comprehensive bill moving closer to a immigration process. but have not had a chance to

vote in the house. in the meantime, we have this crisis on the border. could you talk about catholic charities review of this issue? i noticed your chapter has sent out alerts to all the members of the texas congressional delegation urging to increase refugee assistance which will be part of the president's emergency supplemental request. share what you are doing and your views. you are from texas. >> thank you for that question. our hearts go out to the kids on the border because we have had the opportunity to work with their shares of the horrible stories. we had a 70 year old girl who was in our shelter recently who talked about how her neighborhood friends would go missing and appear dead on the doorstep with her organs missing. the counselor they are giving us

is quite daunting. our organization is a longtime provider of refugee since the vietnam war. we have been a longtime provider of welfare services. for custom that, we were -- because of that, we were approached. about 18 months ago to start using our shelter for some of these children. we began about 18 months ago working with eight of these kids and there are eight beds. and we were approached again and we have increased beds. june 30 of this year, we increased to 32 beds. we converted office space into beds. we were able to do our part. we can have about 400 kiddos who can come through. our main goal is to make sure they are taken care of.

many have been trafficked and their journey has been amazing. recently, we had a three-year-old girl and i have a daughter and i cannot imagine letting her across the street without me. the journey that i've been on has been a tragedy and a blessing for us to step up and help. >> thank you for your organization in that area. >> i wanted to commend you for continuing this series on the war on poverty and what works and what it does not and i want to thank all of the witnesses for sharing your personal stories about how we are moving in the right direction. there is a common theme if we listen and if it works with one individual and poverty and you work with one. all folks needed to be treated with the individualized regimen. factors were case management comes in.

mrs. reynolds, i was impressed by your testimony. i want to drill down if we made, you separate out categories of poverty. chronic, situational generational. can you talk about the percentages are? do you have a breakdown of where people fit in? >> i do not. i would say our organization is more anecdotal. for example we have a largest senior housing program funded by hud. those seniors are low income, many have extensive disabilities mental health issues. we need to provide them a place to live. and people in chronic poverty are not able to get jobs. we help them build community. we see a fair number in situational poverty but a large number are generational. >> the success rate varies

between those three categories? >> it does. success looks different. success will look like -- it is about ensuring they live with dignity. chronic and situational, that as one of the big reasons we are launching our pilot to study that a lot more and understand a lot more to look at time of war as we proceed. >> what are the things that make it less likely to get an individual out of poverty? >> the things that rell really help us move a clipet out of poverty, motivating a client working on the development of a service plan after assets we

believe families need to possess to get out of poverty, setting goals, to have quick, medium term and long term goals. >> how does that compare to the standard federal program of anti-poverty? >> a lot of -- there's so many federal programs that are anti-poverty so it would be difficult to talk about that. you have public assistance programs which are mostly number of outputs, number of people on it. you have some programs like a lot of the refugee programs which i believe are a good model about getting to a point of self-sufficiency and no longer being able to depend on that and everything else is in between, shelter beds, things like helping children thrive, a whole variety of things. >> i'm really impressed with america works and your focus on work. i wonder if you would relate that to the 96 reform act and

compare the work requirement and how you think that is important or not important to successful outcomes. >> well, i think the work requirement is quite important. because it allows organizations like america works to provide that individualized assistance to an individual to ensure that we are hearing what it is that they want to do employmentwise while simultaneously addressing any of the case management issues we discussed here today. i think the work requirement is important for anybody who is deemed eligible to work. and then we're looking at folks receiving social security disability who for their whole lives have been told that they can't work but they actually want to and it's about matching them to an appropriate position and we've done that successfully for about the past 7 years with our social security beneficiaries. so again the individualized approach which is becoming a common theme is so important

because it allows us the opportunity to hear what this individual is going through whereas they might not be heard to the caliber they expect when they apply for benefits or recertify. >> do you think your program is scaleable nationwide? >> absolutely. >> we could build it up and have greater success? >> mm-hmm. >> thank you. >> there's no doubt in my mind, mr. chairman, that if we put ms. turner and ms. tiller and ms. reynolds in a room, together at the theme to address the theme of these meetings that we've been having in hearings that the three of you regardless of your difference of opinions -- and there is some common factors in

as the doctor just pointed out -- would come up with a better solution than we come up with up to this date. let's get this straight right now. it's clear the two parties want to do something about this problem, neither party is privy to virtue on this. but we have widely different ideas about what direction we should go in. i hear many times the culture of poverty. you'd better examine the culture of the congress, because the culture of poverty means that there is an essential part of poverty which will continue inevitably. on the other hand, i've heard, how do we help folks become self-sufficient? that's an interesting term,

self-sufficient. how to become self-sufficient? well, how do children three, four, five years old living in poverty become self-sufficient? how do seniors in their later years, how do the infirmed, the mentally challenged, the chronically unemployed? i've got self-sufficient coming out of my ears and it doesn't do what you three people do day in and day out. so thank you for what each of you do. according to not my analysis, public analysis, the budget that this house of representatives voted on finds 69% of the budget cuts, which is $3.3 trillion over the forth

coming years cut with people from low or modern incomes. so you can upon fiff kate all you want. let's deal with the reality of what we have to do with. i listened to you very, very carefully, ms. reynolds, about what you need and catholic charity. i'm very familiar with catholic charities. a great job you do all over not just in fort worth. those cuts are vital. in medicaid, culture of poverty , snap program. do you know what the snap program is all of you? you deal with it day in and day out. the social services block grant which provides states with funding for meals on wheels programs. incidentle programs. who the heck needs to eat. and child care for low income workers.

and it includes $125 billion in cuts for pell grants which gives low income students the ability to break the cycle of poverty. culture of poverty. we will hear this. so we're always going to have poor people and we always will have poor people. that should not be our incentive to try to do something about the mess that's existing out there and with children and the infirmed and those people being mentally challenged. ms. turner let me ask you this question. your children receive health coverage through the chip program. correct? >> no. my children receive medical through medical assistance program. >> could you explain how that works? >> through the department of public welfare so key stope first. >> what happened if we ever cut that program and you couldn't to do that?

>> my three children who suffer all from medical disabilities, with seizure disorder my twins take life sustaining medication twice a day. all three of my children have asthma who take medication every day. >> i thank the three of you for testifying every day. please try to help us change the culture in the congress of the united states. and we hope we listen to all three of you. thank you very much. >> i thank the witnesses. this is the fifth hearing and i've learned a lot and it's no different today. i believe from hearing all the testimony that one of the foundational reasons government welfare programs which never and will never be able to match the kind of service that is you provide to the community is lack of relationship.

government programs cannot love. gove programs from that can't demand an expectation. it can't break the cycle necessarily. and i want to talk about that a little bit. ms. gains turner if i understood your testimony correctly we want to break that cycle. everyone wants to break that cycle. but we don't want to get off these programs necessarily either. i understood the cliff and there's ways of softening it perhaps but if i understand you right, if we were to increase by 300 400, 500% all of these programs and get more money into the pockets of people by definition they would then be out of poverty and that would be a good thing or a bad thing? >> it would be a good thing if they were out of poverty and mude out of poverty in the right way. don't push them out of poverty.

what i mean is having these programs that you put in order and then you cut them. >> that's the cliff. >> that's the cliff. >> but take my theatrical example. if we were to inclees these programs by 500% people would be out of poverty and that would be a good thing. >> yes. the programs work. that would be good to move them out. >> but the tendency would certainly still be there which you also don't like that. >> the cycle of dependency. you wouldn't be independent. >> i'm independent now on the program. i consider myself to be very independent. i work just as hard as anybody in this room and i'm very independent. >> i'm not challenging you on whether or not you are or not. you're independent but you're here testifying that you have to have these programs and you need these programs. >> i didn't say i had to have these programs. what i said was these programs work to help people who are in

struggling situations. if a person loses their job and they become unemployed. >> that's your situation. . >> so my situation is that i have been -- >> what is your job? >> i work with young children in a recreation center. my job is to make sure that they are doing their homework, after school program making sure that the building is taken care of. >> what's your pay? >> my pay is $10.88 an houmplet >> and your husband i saw works at a grocery store. >> yes. >> and that's full time as well? >> yes. my job is full time but my job is also limited. i'm a seasonal employee. so i work for six months. >> is that by choice so you can spnd more time with your kids in the other six months or have you tried to get other employment or not? >> i've tried to find a lot of employment but due to health and other things i haven't been able to find adequate jobs. >> you're a ward chairman or ward leader in philadelphia?

is that a paid position? >> no. >> is that a partisan position? >> i'm a ward leader so i go out and make sure that people understand the importance to vote. >> member of the republican or democratic? >> i'm a democrat, sir. >> that's what i meant by partisan. but it's volunteer. >> yes. volunteer. >> with the minute ift left i want to switch gears and talk about the work opportunity tax credit. ms. tiller or ms. reynolds are any of you familiar with this? a lot of folks come to my office and say it's a good thing and effective in helping people incentivizing employers to hire low income people or folks that might have been or that are an ex felon or something like that and they get a credit for hiring, training, and keeping them on the job. it seems to me like a good thing. then there's others who say not so good. i want to get your impressions of the program and is it complementary?

snfment>> we make sure that we inform all of our participants, all of the individuals about the work opportunity tax credit and i've heard both sides as well. with the ex-offenders that i work with consistently, there's some embarrassment because the way the application process is when you're filling out an application for an employer, what is your felon status, what is your misdemeanor status, things of that nature. potentially i think there could be a benefit down the road. i think we need to re-evaluate in essence how we're getting to the point that the business would accrue that credit. >> thank you. time has expired. the gentlelady from wisconsin, ms. moore, is recognized. >> thank you, mr. chair. let me make an opening statement given the last exchange between one of our colleagues and mrs. gaines-turner with regard to dependency.

just recently -- and friday we are going to be working on yet another tax extender where apparently we are going to extend $614 billion in tax extenders on a permanent -- make them permanent and put businesses on a permanent welfare. these bills -- the latest, the bonus depreciation, was temporary in nature to stimulate the economy. as you remember, targeted, temporary and timely was what we tried to do to stimulate the economy. but yet they want to add $287 billion to the deficit. i want to put this in the record with your permission, mr. chairman, just to clear that up. >> without objection. >> i also want to clear some other things up, without objection.

clear some other things up about the -- because i feel like we've had great testimony from all three of you, but the conversation was sort of trying to steer some of our witnesses into saying that they're just absolutely too many programs and if they had more flexibility that they could do a better job. i certainly agree, for example -- and ms. reynolds, the case management approach. certainly agree with america works which recently came to milwaukee, some of the things that you do. but be clear, when they talk about flexibility they're talking about cutting the $299 billion medicaid program that you may need in order to help situational or generational poverty or the infermed or disabled people. the testimony you read for us, ms. tiller, the young woman -- i think she was probably still on medicaid after she got her job at the fast food restaurant. so you, you know, i don't want

you to be lulled into supporting, gutting this while we pay $614 billion in corporate welfare. i do have a question for you ms. reynolds, about the mind set of the individuals. don't you think we have to change the mind set of the community too? an example i come up with. if you run into a client, for example, who found themselves in the county jail because they had a bar fight and when they come out, don't we have to get the business community to hire people who might have a public record, for example? >> we in fort worth have been very fortunate to work with the business community. we have developed a living wage tool kit at our organization. everybody we -- catholic charities fort worth makes a living wage. several of our local businesses have made a choice. >> ok. i don't have 10 minutes like the chairman did. it's not changing the individual minds. the community has to embrace it too.

otherwise you have permanent unemployment. i'm so happy that people get educational opportunity through your program because ms. tiller, you focus on work first programs. sometimes it's very difficult. we have skills match in this country. how do you deal with skills match when you don't allow education, one of my main critiques of the tanf program? >> well, it's not that we don't allow education. a lot of times we'll take the skill set that the individual can come in with, see if we can transfer it into some type of employment so simultaneously they'll begin to provide more for their families and attend educational programs. and we support college -- >> do you -- do you worry about -- the femininization of poverty? tanf is primarily utilized by women and, you know, everybody here is educated in this room. and we all know that an

associates degree, bachelors degree is just necessary in this economy to have a job. don't you worry about that? i'm going to ask you another question too. your model, your business model, america works, you've come into milwaukee and it's sort of putting the nonprofits in the public sector out of business. how does your business model enable you to provide services to clients that are adequate to get them out of poverty? >> we're able to turn around those profits to help individuals. >> you use profits back into the programs and not into the shareholders? >> both. we want to reinvest as well because we want to do more programs, do more research and help additional populations. >> the gentlelady's time has expired. >> thank you, all, for your time. >> the gentleman from texas is recognized for five minutes. >> thank you, mr. chairman. i'd like to thank all of you

for being here. you have wonderful stories. we appreciate you greatly. first of all, ms. renlts and i call fort worth our home and we are both t.c.u. horned frogs. go, frogs. >> ms. reynolds, you've said -- we've been talking about a term you said which you termed generational poverty. it's a mind set. he talked about that. no goals. no future. do a lot of the people that you work with, do they trust government more than they would the private sector? >> absolutely not. the majority of people we serve come through our doors because they trust catholic charities. catholic charities has a strong brad throughout the community and i believe each person that comes into catholic charities throughout our nation has a lot of care. and they have warm -- >> being from fort worth i know the good things you do and i appreciate it very much.

>> thank you. >> and also, we try to tell many cases relationships with people, maybe better relationship with government as a whole. people can help better than many cases the federal government. just going another direction real quick. i want to thank you for the work you're doing on the border. i know what you're doing down there and i want to thank you with the challenges we have there. ms. turner, thank you for your testimony. i appreciate that. what i heard you say earlier was that actually government delivers negative incentives to you. in other words, the government's rude, government says don't have a savings account. government says don't make any more money than what you're making. do you think with that being said that actually we should be more like the private sector where it allows for growth and unlimited success? >> i don't -- did i say government or did i say caseworkers? >> i assume you're talking about government programs and

so forth. >> i was talking about the caseworkers that work for the government. >> well, that's the government. >> no, i don't think we should go with the private sector. i don't feel like i need someone else to tell me how i should be spending my benefits or where the benefits shall come from. i don't feel we should go that way. i feel like i should be in charge what's good for me. i feel like i should have a say so on what comes down the pipe which is going to affect me and my family and my children and so many americans. that's what i feel. i don't feel like the government should tell me that i have this and this is what you're going to do with it and if you don't do it then you will be penalized. that's how i feel about that. >> you don't think the government should tell you that? >> no, i don't think the government should tell me that. i feel like if i go into an office and sit down across the table i should be treated like a human being. i should be looked at as a human being. i shouldn't be talked down to. i shouldn't be looked at as

someone who just wants to come and rely on government programs because that's not true. i'm very strong. i'm very independent. i'm very smart and i know what's right and wrong for me and my family. >> you sound like a private sector person talking. i appreciate that. back to you, ms. reynolds. what would you say are the biggest barriers that your clients are trying to face, and they're trying to come out of poverty, what is the biggest challenge? >> that leap. 80% are working. but they're just the working poor. they don't make enough to get out of poverty. yet they make too much to qualify for any governmental assistance. and too often the federal system incentivizes people not to work and to backslide because you've become -- it's financially better. they're more financially astute about how that should look. as the thing that would be more beneficial is an incremental decrease as well as losing benefits as well as the case management that could more quickly work hand in hand with families to remove the barriers

to get them where they need to go. i say that anybody that comes to services should be treated with compassion, dignity. i do believe accountability is incredibly important. i think support is incredibly important. i learned how to balance a checkbook from my father who's a c.p.a. a lot of our families who walk through the doors have no clue what to do, no clue how to get to the next level. we talk about pell grants. it's a great benefit. but at the same time only 10% of students -- low-income students who start community college nationwide ever finish. something's wrong. what often it is is a small situation, childcare issues, barriers, some families spiraling out of control. they need that support, they need that push, they need that push to make that leap out. >> you're doing that. with that being said, i yield back, mr. chairman. >> thank you. mr. mcdermott. >> thank you, mr. chairman. i'm old enough to remember george bush being sold to us as

a compassionate conservative and i appreciate five, six hearings about poor people but i'm not sure i really understand. ms. gaines-turner, you are someone we can learn from about how it actually works. now, everybody up here makes $170,000 a year. so we don't have much contact with what you go through on an average month. could you tell me what your education level is, how far you went in school? >> i graduated high school. >> so you got a high school education? >> yes. >> and the federal government describes poverty level for a family of five -- that's three kids and a couple parents, at $27,900. can you tell us what your income as a family -- monthly, after taxes, or yearly after taxes, can you give us an idea where you are?

>> so my husband gets paid every week and he makes $8.25 an hour. after taxes he has about $170 a week. >> $170 a week. >> i get paid $10.88 an hour. just recently in june my hours were cut down to 12 hours a week due to the budget. my paycheck was $222. for two weeks. for two weeks. >> for two weeks. that would be about $111 for a week. >> yes, sir. >> ok. so that's -- so that's what your plun is now. tell me about how the food stamp thing interacts with that. what level -- is that -- your salary, whether you get the food stamps or is it the family level? >> it's me and my husband's income. >> and you have to report each week or each month? >> you have to report each month. >> each month. so when you drop, you reduce yours and you get more food

stamp money? >> that's the way it's supposed to work. that's not how it always works. so in june my income reduced and i went into the county assistance office and gave them that information and my food stamps stayed the same. so it was supposed to rise but it didn't because the caseworker said she didn't get the paperwork so now that i'm back to my full-time hours in july, you know, my income now -- my food stamps will go back to $380 is what my food stamps will be. >> so we're looking at a family that right now is making about maybe $300 a week, that's $1,200, you're living on that amount of money. >> yes, that was for the -- yes, that was for the month of june. >> do you get cash money from any other source, from tanf? >> no, i'm not on cash assistance. >> no cash assistance? >> no.

>> the only thing you have is the food stamps on top of that? >> yes. >> and your rent, how much do you pay for rent? >> my rent right now is $277. >> so a quarter of your money -- well, not a quarter -- about a fifth of your money each month goes to rent, little bit more than that? >> yes. >> and then food -- do you have a car? >> no. i take public transportation to work, me and my husband. >> you're on public transportation -- >> uh-huh. >> and how much is your utilities? >> you would figure one month i might get a water bill for $230 and then you have to think about the gas bill which is maybe another $107, something like that, give or take. and then you have to think about the electric. like i said, i have three children with medical disabilities so i don't have a choice to turn on the air-conditioner to make my house is cool in the summer months so my children don't have seizures.

in the winter, i don't have a choice when temperatures drop, i have to turn that gas on. so, you know, i'm always -- i'm always -- we're always trying to climb up. climb up. there is a constant climb. and that is the one thing i think that's important for me being here today just for people to understand. you just broke down my whole everything. could anyone live off that amount of my like me and my husband do every day, every month, every week? it's difficult. it's not something we choose to do. of course we want to get a full-time job. of course my husband wants to go back to school. he has a masonary degree. of course i want to go back to college. i am a smart, threctual, independent person. but unfortunately my circumstances don't allow me to go to school and to also work and juggle our family, you know. i have things that i need to do. i want a tee ball program, volunteer. i'm an assistant girl scout coach. i do things to contribute to my community.

>> i thank you very much for being open and willing to expose your financial situation to us. it takes great courage to come here and talk about what life is really like. >> thank you. >> i want to thank all three of you being here today. it's really interesting and an honor to be in front of you. what each of you do for your community and i appreciate it very much. i was very fortunate to be involved in homeless shelter and transitioning people -- transitioning people from situational or generational poverty and into success over a 20-year period and it was certainly a very rewarding thing. one thing i worried about in our particular facility called myrtle beach haven, in terms of the accountability aspect, we always saw that was important. we didn't want to encourage people to stay homeless. so we limited the time people could stay and said they need

to be looking for work when they came in. that wasn't all -- always most success model but the successes that we had we were very proud of. then in terms of the case management aspect, that's something that always worried me. the manager of the house took it on himself to take people around to apply for this maze and myriad of potentialal benefits that may or may not be aplickal to each person. i -- applicable to each person. i would love to get your advice on how we can better handle the case management at myrtle beach haven. you said something that intrigued me or made me curious. you said the federal programs -- well, you named them -- welfare and food stamps, you said they're not working. what did you mean by that?

>> what i meant was the federal programs in which we have right now, they do work, but the problem is is that once you get to a certain platform you are knocked back down. that is what i was speaking about. i didn't mean they are not working. what i'm saying is they need to be improved. i feel like we need to get a task force -- i'm stating here for the record. we need to get a task force that will pay attention to food stamp programs, to savings, to education, and to medical. they need to be monitored. that's what i meant. >> not just a myriad of unrelated programs that -- you're saying more like case management, right? when you say monitor you mean somebody needs to be looking at them? >> i think someone needs to be looking at them to see how we can improve them, to make sure they're not cut, to make sure

there are not billions and billions taken away from a single mother who relies on food stamps to feed or children or a wic program or a head start program. >> more money spent ineffectively when there is such limited money to go around, we don't want money to be spent ineffectively either, transition people to being independent, is that correct? you want to make sure money is used effectively? >> of course we want them to be used effectively. >> i think you agree that the only path out of -- will federal programs -- if people rely totally on federal programs, does that take them out of poverty? >> no. >> will it ever? >> i think some people just naturally make it but over all a reliance on federal programs solely is not going to move someone out of poverty. >> mrs. tiller, do you agree with that? >> no. >> it will never take them out of poverty? >> no. >> mrs. turner, do you agree with that? >> i am sorry, not hear the question clearly.

>> people rely on federal programs -- the thing we're talking about, the generational poverty, if they just simply rely on federal programs and they don't try to make themselves better and go out and get a job, will they ever get out of poverty? >> i don't think anyone ever wants to rely on federal programs. i feel like people want to go out and get a job. >> do you agree that's the path out of poverty is they have to go out and get a job and become self-reliant? >> if they are capable of going out and getting a job, sir, and have the necessary things to do that, then, yes. but you also have to think about there are some people who are not capable of going out to find employment because where they live, there aren't any jobs. i mean, let's think about it. there is a recession right now. how many jobs are there? and good-paying jobs? let's keep that in mind. >> all i am saying is if you rely on federal programs, you're never going to come out of poverty. the only way out of poverty is to become self-reliant and find yourself a job. i got 20 seconds left and i want

to ask you one other question. you mentioned earlier that the limit on hours in the affordable care act, you said there can't be the limits on hours, didn't you say that? >> i didn't say the affordable care act. what i said is the limit on hours is you have employers that won't pay and that's what you're referring to -- i said employers won't pay their -- they won't pay their workers enough hours to give them medical insurance. that is a big problem. that is something we need to address. why is it that a person can work for a company for 32 years and have to wait a whole year just to get a $0.25 raise? that is what i'm talking about. why is it that big companies and corporations can only pay a person 30 hours and not giving them four hours to receive medical benefits? >> i thank the gentleman for his time. ms. lee. >> thank you very much. first, let me thank you, mr. chairman, and our ranking member

for this very important hearing and this very important panel and i want to thank both of you for inviting these witnesses especially ms. gaines-turner because it's so important that we hear from americans who are most impacted by the policies that we discuss at this committee. so i want to thank you very much for this. let me once again thank all of the witnesses. before i begin my questions, i want to mention, mr. chairman and to our ranking member, next tuesday, i'm co-hosting a bipartisan poverty simulation that will allow members of congress and their staff just a small glimpse into the lives of families who are living in poverty every day. it will be just a brief example of what this experience is like. we are trying to raise more awareness around the country as to what ms. gaines-turner, for instance, what her life is like, and so we're inviting democrats and republicans to participate with us. and we'll get you the information.

we'd love your participation. first, ms. gaines-turner, let me talk to you. we were just breaking down the numbers in terms of your salary. we figured you and your husband both make a little over $14,000 a year. and with s.n.a.p. benefits and your income, you're probably about $23,000, $24,000 which is about -- below, again, the poverty level of $27,900. now, you're living on the edge. that's very clear. millions of americans are living on the edge. you both are working -- you both are outstanding citizens and you're dealing with all kinds of issues in your life and i want to just commend you, first of all, for juggling so much. but -- and for your advocacy and for being here today. also, i want to just ask you how, you know, so many people

view people who are on public assistance or who need government assistance, not that government assistance and relying on government assistance is going to lift everyone out of poverty. it's a bridge over troubled water. i was on public assistance and food stamps and i thank my government for being there for me. but it was a bridge over troubled water until i could figure out what to do next and get my degree and take care of my kids and move on. what's your perspective people living in poverty -- below the poverty line and who are working and who -- some consider lazy or relying on public assistance to just get over? and let me ask my second question to ms. tiller. i want to do this. the federal ban on food assistance -- and thank you very much for your testimony. the federal ban on food assistance, which is a critical piece of the safety net, this ban for those convicted of a drug felony for life, lifetime

ban on food stamps and public assistance, want to get your comment on that. and to ms. reynolds, let me thank you again. i'm a social worker by profession. i understand case management. so important. but those clients that you serve, what happens if the safety net were cut in terms of case management, and what happens if there's a reduction of about 30% of federal assistance as proposed in the ryan republican budget? ok. ms. gaines-turner. thank you very much. >> thank you, ms. lee, for your comments and thank you for your support constantly and pointing out how difficult it is. i feel like, you know, a lot of people don't know how difficult it is. i don't know one person, maybe in this room, that can juggle the things that me and my husband have to juggle every single day with having three children on medical disability going back and forth back to work, maybe having to take an under the table job just to bring in extra money. there's not a lazy bone in my body.

there are many people who live in the inner city under the poverty level that are not lazy. we want to be a part of the conversation. we want to have full-time jobs and go to school and go to college and things like that. i actually believe that certain people just put that stamp of lazy on us, to put a smokescreen, not really see what's going on, to point the finger at us, to look down at us, to try to humiliate us or twist our words, you know. i feel like we are the most strategizing people that there is. every day we wake up and cut coupons like everybody else and get up and go to work and strive for that american dream because that's what everybody strives for, right, the american dream. that's what we need to get back to is the american core and that is where if you strive harder and work hard and do your just diligence that you can get ahead no matter what race, gender, creed, or where you come from, inner city or out of city.

>> second go round? >> no we don't have -- you have a lot of colleagues that showed up. >> well, i'll ask for a written responses. >> thank you, mr. chairman. i appreciate the fact you have taken on this issue of poverty and that we are really trying to get to the bottom of it. i have my own story of my own about poverty. i sit here today because there are a lot of folks who helped me to get to where i am. so i'm interested, ms. reynolds because i have gone back and worked with a number of programs of the poverty and generational poverty in particular is what i'm going to speak to. i'm sorry i wasn't here for all your opening remarks. i did read the piece you gave to us. generational poverty has its own culture, hidden rules, and belief systems. that's what i've run into as we've had programs that tried to help people get out of poverty. what we see, and you say it here, generational poverty need

a deeper level of case management because it requires a mind set change. what i have seen in my experience -- and not in all cases, but some that have broken my heart, where some got an opportunity to get a skill or a degree and slip back again because of just anxiety about, can i make it on my own? will the paycheck actually come? will i lose my job? so you say here you're happy to provide these examples to show how you've been able to work through that. can you give me a really brief idea how your casework moves to help people being in poverty and having that dependency and then the fear of being on your own? >> that's a great point because it is about getting jobs but it's also about making sure people who maybe grew up on federal benefits, people who maybe grew up in a situation where they never saw a parent go to work for a variety of reasons

and it has nothing to do with laziness or motivation. it has everything to do with helping folks understand that they can rewrite their life story. although i have never been in poverty, my family's been closely impacted by poverty and i dedicated my life to poverty and studied it quite closely. i think what is so needed with generational poverty is helping with that mind set shift of you can rewrite your life story. this does not need to be where your life story ends. we can look at something different because often when you're in survival mode, basic human theory tells us you're focused on surviving, focused on today. and our case managers lift heads up and help people see a tomorrow. >> so thank you very much. i appreciate that. i'd love to off-line have a little more conversation with you. talk about some of the programs i'm involved in back in my community. ms. gaines-turner, thank you for being here today. thank you for sharing your story. thank you for helping us have a glimpse about what's happening in your family.

i respect the fact that you and your husband are raising three children together. family i think is something we have forgotten about as an equation in this poverty situation. we know the number one poverty indicators is a child being in a single family home. i think we do have that certainly as a part of the equation. thank you for what you and your husband are doing. >> thank you. >> i just want to ask you. do you think if there were casework involved, as catholic charities is doing with the people that they're helping to pull up -- and i think ms. tiller, you are doing the same kind of thing. you're working beyond just the job piece but helping them with all the other life situations. either in your situation or those that you know and you see around you that are in that situation, do you think if we did a better job at the government level with more casework and helping people to find the jobs, understand how to balance the budget and that kind of thing, would that help? >> yes. it definitely would help. it would help. it would help a great part.

i'm not saying that case management doesn't work and i'm not saying that all caseworkers are nasty and all people that work for the government are nasty. that's not what i'm saying. what i'm saying is we need to make sure we support the programs that support the people that do work. that's what my colleagues -- >> thank you -- >> not colleague but other witness. >> found something that is very common in what you all were saying in the casework because i've experienced in in getting people to get from that dependency to the independency. it's very difficult, the anxiety that's produced and i think that's one of the nuggets we ought to take out of this and looking to help people. thank you all so much for this. >> mr. jeffries. >> thank you, mr. chair. i thank the ranking member, both for your leadership on this issue. we know that 50 years ago,

january of 1964, i believe president lyndon johnson came to the floor of the house of representatives for a joint session of congress and declared a war on poverty. that war on poverty has largely been successful in helping millions of americans lift themselves out of an impoverished condition and set on a pathway toward the middle class. of course, there's still a long way to go. although it does seem in this town that there are some more interested in a war on working families than a war on poverty. but that's something that we're going to ultimately have to overcome as well. in the context of this present hearing, i thought i'd start with ms. reynolds just to kind of explore the perspective that you laid out. i believe, i guess in your experience, you've laid out three broad categories of poverty, is that correct? >> correct. >> and those three categories are chronic, generational, and situational? >> correct. >> now, i guess your view is

with respect to each category there is a different preferred strategy in order to arrive at a successful resolution is that true? >> correct. >> and i think you testified that you believe generational poverty requires a mind set adjustment, correct? >> situational -- sometimes situational poverty can require that as well. >> ok. and can you elaborate on just sort of the mind set you believe exists as what you describe as generational poverty and what type of adjustment you believe needs to be made? >> sometimes people in generational poverty has been beat down in a lot of things. they tried to get up and fallen back down. in addition to that, some people living in poverty have maybe never seen a different side of life. have never seen what opportunities exist or frankly never believe in themselves they can get there. >> if i could stop you there. individuals trapped in generational poverty are beat down by what would be an example of something that has beat them

down to create this type of mind set? >> it can be a whole series of things. it can be a lack of opportunities. it can be observing others. it can be a family member. we see that often sometimes too. >> is it fair to say that those trapped in generational poverty is not affected by a mind set but a mind set that is brought by substantive barriers or obstacles they confronted in their life? >> absolutely. >> one of those substantive barriers -- you define success in three different ways. making a way to support the family, correct, was one. three months of savings, a second definition of success. and then no debt. >> no public assistance. >> no public assistance. ok. with respect to sort of the current minimum wage that exists in america, $7.25 per hour.

now, is that a wage that enables a family or an individual to lift themselves out of poverty? >> no. >> in your view? so based on your own practice, i believe, where you support the concept of a living wage, do you think it's good public policy in america to have a wage that exists to allow individuals working hard 40 days -- 40 hours a week throughout an entire year to actually be able to support their families? >> sir. you know, being in fort worth, texas, and being with catholic charities fort worth and i'll speak on behalf of them, our focus has not been on policy reform at the federal level because there are multiple complexities for us. we make sure that clients are trained in jobs that pay a living wage, that's our focus. and encouraging local corporate responsibility, which we have great partnerships with businesses and support our mission in an incredible way. >> a living wage is good public policy, correct?

>> a living wage is an important element to get a client to. >> i think you also mentioned in your testimony the importance of a college education in addressing poverty, is that correct? >> not just college education, no, sir. associate degree and certification programs can also help. in our local community, getting an associates degree to become an aviation mechanic, you start $50,000, $60,000. that is moving families out of poverty as well as a growth industry in the dfw market. >> in terms of pathway out of poverty, a college education is an important component if not the best way to achieve that pathway? >> education, yes, always important. >> ok. do you think a $260 billion cut in higher education funding is a responsible way to address poverty in america? >> what i'm concerned about is the result that happens with those dollars. so what i want to make sure happens is any money we're investing in college, pell grants, anything like that, that

it's having a large return. that's what we have invested in case management with low-income individuals to ensure graduation. if spending money and completion doesn't happen, it doesn't help to get them to self-sufficiency and out of poverty. >> thank you. mr. kildee. >> thank you very much. i just want to follow up a bit on mr. jeffries. let me make a couple comments. one of the things to keep in mind while in theory the notion that many of the federal programs -- at least as i understand, some of the theories presented by folks on the other side and some of the testimony here that some of the federal programs may in fact have the effect of propagating or somehow supporting what's been referred

to as a culture of poverty, it does cause me to sort of question what is -- this is where i follow on mr. jeffries' comment -- what is it -- what are the factors that cause folks in chronic poverty or generational poverty to feel as if they are beaten down? and the sense i get from the people i talk to, it is manifested in the belief that there is no hope, that there is no way out, that there isn't a path forward for them. i think we have to acknowledge that there are places in this country -- in fact, i represent a couple of communities where this condition is present. there are places in this country where for many of the folks in poverty, virtually everything they see around them reinforces their lack of hope. i represent two communities, flint and saginaw, that have

experienced incredible job loss, high rates of poverty, concentration of poverty abandonment. in some of these urban communities with half of the population having left in the last few decades, not only is there a lack of work with unemployment rates in the 30% and 40% level, but there is a deterioration of the landscape. there's empty houses, empty buildings. the notion that those individuals would feel beaten down and sense a lack of hope is one that's clearly understandable, right? so the question is in part, it's an interesting question as to whether or not there is a culture that surrounds folks within -- within generational chronic poverty, but the challenge before us is -- so what do we do about that? i fully understand and embrace

the notion that support of case management, which the way i view it is to help those individuals in poverty navigate a system of support and opportunity, ladders of opportunity that could create a pathway for those folks, are comprised of a couple of things. it seems to me that we need to focus on both. one is the method, how the engagement occurs. whether it's through active case management or whatever. but also it really does also come down to resources to a certain extent. so i'm curious with -- ms. reynolds, perhaps you could comment on this because i think you made reference to it. the difficulty that individuals, particularly in chronic or generational poverty have in achieving educational outcomes. i think you mentioned something

like 20% of those in poverty that choose to enroll in higher education are successful which means the vast majority are not. i'm curious as to whether or not you think the simple act of decreasing pell grants, for example, would increase the success rate for people in poverty? do you think that will have a positive effect on those seeking higher education? >> i think we need to measure the success of pell grants in terms of those who complete their education. i think that's most critical. and what we have seen is actually from a community college standpoint the national average hovers around 10% who actually start complete. many of which are on pell grants. oftentimes the reasons students dropped out, the students we have worked with and understand is because of very simple things. childcare issues transportation, complicated things like a health care crisis going on.

or even something like getting a bad grade and not understanding how to cope with that. that's what i believe that although it can cost a little bit more money, bringing case management along with this education is starting to prove up to actually work. then in the future you can reduce some of these other benefits because you're actually moving people out. >> i guess with the few seconds i have remaining, the point i would make is that in active case management, one is not just managing the individual because you don't manage the individual. you help them manage themselves. >> thank you. the time of the gentleman has expired. mr. huffman. >> mr. chair, i would yield my time to my colleague, barbara lee. >> let me thank the gentleman for yielding his time. i really appreciate that, mr. huffman. i want to ask first, ms. tiller, to respond once again in your testimony you mentioned the importance of attaching ex-offenders to work as it relates to reducing recidivism. mr. chairman, i want to mention

this to the panel. in the welfare reform bill, both democrats and republicans -- this was a bipartisan fiasco, if you ask me -- >> you're talking about the 1996 bill? >> yeah. president clinton signed it into law. there is a lifetime ban on s.n.a.p. benefits of those convicted of a felony drug offense. not homicide. not armed robbery. felony drug offense. lifetime ban on s.n.a.p. and public assistance. primarily african-american and latino men. let me ask you, ms. tiller. what if this ban were -- i've had legislation for years trying to lift this. fortunately states can opt out and my state just opted out this year. what would the work that you do with formerly incarcerated individuals, if that ban were lifted, as it relates to federal drug offenses, felony drug offenses, how would their transition into the work world be -- would it be easier? would it be harder? would it help reduce recidivism? would it stay the same? being able to apply for public

assistance and food stamps until they get a job, what would that do to that population? then me let me ask ms. reynolds one more thing with regard to the federal grants and safety net. with your clients and with catholic charities, what would happen to your clients if in fact there's a 30% reduction in the safety net while you're trying to help people through the case management process become self-sufficient, get a good job, live the american dream, what would happen? ok. thank you very much. thank you, again, mr. huffman. >> well, thank you for your question. while i'm not familiar with -- in its entirety, you know, we can't deny the individualism to it. i could only hope if it were lifted throughout the nation that it would ease the transition for an ex-offender into employment. we do not want people to recidivate because they need to feed their family. what we focus on -- and i do a

lot of pro bono work with a lot of ex-offenders in washington, d.c. bring them into my office and listening to them and creating resumes and skill profiles and introducing them to employers where potentially this may never affect them. something i have heard repeatedly is reference to building relationships. i do that with every participant that comes in, but equally as important, with the community because without those employer partners, without the community-based organization without the government, without having those strong relationships and those strong ties regardless of any legislation we might not be as successful. >> regarding safety net services and clients, as a fellow social worker myself, i do want to say we both i think would agree that a strength-based approach to pulling a client out of poverty is really what our profession is all about. regarding safety net services and cuts, i'm not really here to talk about this current budget.

what i believe is that if we -- >> i understand you're not here to talk about this current budget. >> in general. >> 30% reduction -- >> of course. my perspective is what we need to do is we need to case manage clients to get them out and set our definition out of poverty differently. i think over time you'll be able to cut public benefits because of savings you'll receive. >> all i'm asking, if you cut say, s.n.a.p. benefits by 40%, does that make your job easier? or if we cut medicaid or if we cut section 8 or if we cut those services, the safety net that, for instance, ms. gaines-turner talked about, until they can find a good-paying job, what does that do to the clients that catholic charities service? >> right. i do think we need to have a safety net throughout our country. >> ok. let me ask you one more question about the safety net. >> yes, ma'am. >> in terms of the safety net, the clients you see --

>> yes. >> again, i know catholic charities very well. are they clients who want to stay on government -- the government safety net through their lives, are they looking for a job, do they want to live the american dream? what's their life like? is their life like -- >> that's a great question. some are and some are not. some of them don't understand what living the american dream ever would look like because they have never seen that in practice. so for us, yes, some of the families that come through our door who are on public benefits see it as that temporary bridge gapping, get you out of poverty thing. but unfortunately a lot of the folks we see have been on public benefits programs, some of them that you can be for life. and saw mom and grandmother and others on benefits as well. >> thank you. yes. ms. lujan grisham. >> thank you, mr. chairman.

i'm probably going to repeat some of the stuff that's been discussed already this morning. i want to follow-up on my colleague, ms. lee. in case managing and doing any kind of social support, it only has impacts if you have something to case manage to do. the big issue we have and discharge planning is there is no place to discharge anybody to. you don't have any of those social supports, whether they're government focused and paid for or they're familial. they don't exist. if we talk about the safety net, i don't know if people understand what that means anymore. and most case management folks and most social workers are very effective at the thing you do for that particular client. maybe it is food support. maybe it's housing. maybe it's access to specialty medical care. maybe it's transportation. and when you have to be broad about all those things and because they differ from state to state, it is a very

challenging circumstance for the person that's doing that case management. in fact, i don't think it's very effective because it's not very integrated. because you have to work with public and private sector benefits and supports getting them to work together, even having their rule work very well together. incredibly challenging. i want to hit something, ms. reynolds, that you just said. there are generations of poverty and it becomes very difficult to change that dynamic. we case manage or we engage in a social service environment usually when there's a crisis. and not before and we don't stay. once the crisis and the crisis could be, we can't do transportation, we can't do health care, but we can do housing. we finally get you housing and we walk away, and we come back if there is an issue, if there is an arrest. we walk away, come back, walk away. we wonder why it's expensive and difficult. i want to highlight 90% of all the entitlement benefit spending

goes to the elderly, the disabled, and working households. less than 10% of federal spending on any of these programs goes to individuals who could in fact work. and yet we focus on that 9% and debate back and forth how we're going to do it, whether we should do it at all. there is a population that needs generations of support and what it means to be a working household and be lifted out of -- out of poverty. and so really i'm hoping you might with whatever time i have left -- i'm going to go to ms. gaines-turner. i think drawing on the experience of folks who are working and who understand these difficult decisions between supporting a sick child and paying utility bills and the notion that i think given it's 9% that too many of policymakers, not just here in congress, but policymakers in general i think assume that once you are working, your financial

issues and issues with poverty disappear, that that's not an accurate statement. >> thank you so much for your comment. yes, that's definitely not an accurate statement. just because you have a job and you have two people in your household like me that are working, that doesn't mean that everything is solved. that doesn't mean that you don't still need assistance. whether it be food stamps, medical, section 8 housing which we live in, section 8 housing, which in philadelphia i was on the waiting list for 10 years. and being homeless twice with my son who is now 10 and my twins. you know, there are so many different things to go along with hunger and poverty. you know, you can't just pinpoint one thing and say well, this isn't working so this isn't going to work. that's not true. once you start working and once

you get your foot in the door and once you continue to work, there's something else that comes up. as you said, generations and generations and generations, it seems like if you're constantly, as you always said, beat down and pushed to the back of the line and told you're not worth there is no hope, you know, i wonder how many people who actually walk through your doors and say, you know what, i'm going to go in and apply for a job and i'm going to look and then be told you don't qualify or they get sent out to the job itself and they can't compete because they don't have any work history. so they are sometimes not given the opportunity to ever get their foot out the door. >> or they get their foot in the -- not the right door. >> exactly. but they get to the threshold and they're knocked back down. i think that's an important point. >> and -- four seconds left. what i heard and i got some nods, mr. chairman, with your

patience, is that the safety net, the way in which we describe that may not really accurately reflect what is needed to support families and poverty to get out of poverty and feel like they are getting what they need to actually live and have the american dream. >> thank you. ladies, i want to thank you very much for sharing your mornings with us. this is very helpful, very informative, and i think the members got a lot out of it, so i appreciate you taking the time with us today and sharing your stories and experiences. this hearing's adjourned. [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute]

>> next, the closing session of the national governors association summer meeting. then q&a with author and columnist george will. live at 7:00 a.m., your comments on washington journal. >> today, former price president dick cheney, his wife and daughter will take part in a conversation with politico. topics include the current situation along the u.s. border the israeli-palestinian conflict and the upcoming midterm elections. live coverage today at 11:30 a.m. eastern on c-span 2. >> in the past, education was limited to the opportunity down the street at the local school. now, particularly for high school students, their learning

is this bundle of digital learning services, some that are formal and paid for by the state and some that are informal, the resources that students and parents find online. it is becoming important that states make sure every family have access to a variety of full and part time online learning and that districts remain open to those possibilities. >> did it a learning and the education system with tom vander ark tonight at 8:00 eastern on the communicators on c-span 2. >> the national governors association summer meeting concluded sunday in nashville tennessee. the best buy ceo was the closing speaker. he focused on how the store stays competitive. this is just under an hour.

>> good morning, everyone. it everybody survived the wonderful entertainment we have? what a fantastic way to close off our last evening. let's give the governor a round of applause. such a wonderful job. [applause] >> i think he should sing for us. [laughter] >> it makes you want to sing after coming to nashville. a little kick in your walk just being here. it has been a fantastic trip and a wonderful meeting.

we want to also thank your staff. your sponsors and hosts, let health but this meeting together, along with our mga staff -- nga staff. this is our closing session of our summer meeting. it has been a great pleasure to serve as your chair. one of the reasons why i chose my initiative for tomorrow's jobs was to ensure the changing business client in our nation matches business needs and also our workforce needs and home. we are continually aware of how technology and innovation have forever changed and altered our national economy and affected national economy affected our schools and daily life. we should also pay attention to our large cities, small cities and employers large and small. our businesses on main street

have long been the bread-and-butter of our economy. very pleased this morning that our next speaker comes from a unique perspective, leading a company that succeeds on both main street and e street. beginning has a company in 1966, as the sound and music, the name was changed to best buy in 1983. the company has more than 140 thousand employees globally and more than 1400 retail locations in the united states. each year, about one billion people shop online at best buy.com and 6 million shoppers -- 600 million shoppers visit their u.s. stores. it is a great pleasure that we have with us our guest speaker the president of best buy. i want to say this right -- did i do good? i have been working on it all week. i especially look forward to

hearing the talk about the future of america's brick and mortar stores. it is something the governor has focused on and talked about a lot. companies from best buy to our local stores that can succeed in an ever-changing economy. he has a strong reputation of being able to turn around companies and transform them and bring his expertise and also the french division of electronic data system, and in the three years there, the company reversed its revenue slide from 1.3 billion to an annual revenue of 2.1 billion, while significantly increasing its profit margin. prior to joining best buy, he was the ceo of carson where he led a renaissance of businesses, and before coming to carlson, he led a unit and grew from 8

billion to 25 early in in four years. a remarkable history. to our governors that are here today and our guests that have joined us, let's give a warm welcome. [applause] >> thank you so much, governors, for the opportunity to speak with you this morning. despite my accent, i am from minnesota, a place where 2500 companies are headquartered and -- 20 fortune 500 companies are headquartered and a wonderful place to live. we also have winters but we will not talk about that. i am the 14th executive officer of this company and it is a great honor to have the opportunity to speak with the governors of the states in this great united states of america.

the topic, the future of main street, is really an important topic to be speaking about. it is important because of the importance of the retail industry and economy of all the states. globally speaking, retail is about one quarter of the gross domestic product of the united states. directly, retail employees 15 million people. when you take into account the people working for retail who build the stores and so forth, it is about one quarter of the jobs in the united states. it is enormous. from a jobs standpoint, do i -- it is enormous. from a states standpoint, do i need to tell you the sales tax

it is about 250 billion dollars? on average 30% of the revenue of each of the states. as best buy, we are happy to provide $2.6 billion. the impact of retail goes beyond this. all retailers are active members of the communities in which we operate, beyond the jobs we provide, we contribute today's charitable causes, given the last 15 years. 140,000 hours of volunteer time, employees per year throughout the states. we also have a recycling program. probably most of you know the citizens of your states can come to our stores and recycles our electronics. in the last four years, we will have recycled one billion pounds . a big impact in many ways.

this is also a timely topic because of the rise of e-commerce. that is significantly transforming the retail industry throughout the u.s. it is now $250 billion and growing rapidly. last year it grew at about 17% compared to the previous year. in our industry, e-commerce is about 20% of the industry. it is very significant. beyond that, it goes beyond that because the shoppers of information available online now, when you buy something significant, more than $500, in 80%, you start your shopping journey online, researching the product, comparing the product.

you may or may not complete the transaction online but in 80% of the cases, some -- the shopping journey starts online. more traffic is going down in contrast. during last holiday, more traffic in december was down 14% year-over-year. that is very significant. the question is, is it in the future the death of main street? we have to ask this question. what does main street need to do to thrive in an environment where technology is significantly transforming the shopping experience? what do we need to do to be successful in that context? i am trying to answer this question. with the benefit of the experience of the transformation we started two years ago when i became the ceo there, in my message this morning, i will say of course this is not the best

-- not the death of main street. it can thrive provided it transforms itself significantly and innovate the customer experience, marrying physical brick and mortar, which we can do online through a multichannel customer experience. i will base my remarks on the transformation of best buy. governor, you highlighted a bit of our history. it is one of these amazing american success stories. founded in 1966, it is a $35 billion company and has been very successful. 15 years ago, i was the ceo of a videogame company providing games to best buy and i saw how great of a company it was. it was the best in the business. probably five or six years ago it started to go sideways. that is something that happens to companies that are very successful. you can become complacent.

at the time there was the growth of amazing competitors. amazon started to grow significantly. apple got into the retail business. of course, we are competing with some of the foremost companies on the planet. walmart, costco, and so forth. we stopped our emphasis on the customers, we got distracted and all of this led to a bit of a drama a few years ago that was highly publicized in the media. this is when i joined because i love challenges. so i was not suicidal. [laughter] in the fall of 2012, we did a diagnosis of the situation and found that we had two problems we had declining sales and declining margins. only two problems, that is the good news. but they were significant. we also took the time to identify our assets. we had amazing assets. most of your customers.

you talked about 140,000 employees passionate about customer service. 70% of the american population lives within 15 minutes of a best buy store. that is an amazing asset and this combined with the relationship with our vendors turned out to be a great opportunity. we are the only place of scale where they can really showcase the fruit of the billions of dollars of r&d investment. products are complex and difficult to understand and they need a place to showcase this. we had our website which was significant at the time. we had these assets but we needed to transform the company. we needed transformation efforts. the heart is a real focus on efforts.

-- on the customers. to illustrate what mainstream needs to do, let me illustrate our playbook. the first thing we did in the fall of 2012 was decide prices needed to be competitive. in a world where information is pervasive and we sell other peoples products, there was no way we could not be competitive. there was a lot of talk about show grooming -- show rooming. people go to our store and spend 30 minutes with blue shirts about our product them and buy it internet. that is frustrating to our blue shirts. these are people who come to our stores with great intentions. the decision we made was to match internet price. we will provide the price that you can find on the main websites. this was not good enough because it is not just about price.

we started a strategy to focus on providing advice, service convenience, at competitive prices to customers, particularly those interested in technology products but need help. i need help shopping because it all changes all the time. advice starting on this side, on the site, you have to be able to find a shopping guide. how do i choose a tv, how do i compare? advice in the stores. we have invested significantly in the training of our blue shirts, our associates. we have also worked with our vendors to make the shopping experience great. companies like

samsung, microsoft, intel's, company -- intel, sony have invested hundreds of thousands to really display how everything works together. we have super trained blue shirts. today if you walk in a best buy store, you probably do not know you need a high -- an hdtv. you do not know and then you talk to one of our blue shirts. after 15 minutes, i guarantee you they will then know, and the only question is which and when. service. this technology is very complex. in terms of help with your design, setting it up and transferring data from your old phone to your new phone, they will need to take care of you

and make sure you walk out ready to go. also, help. when you have to use the products trial -- help with troubleshooting. we are proud to be celebrating the 20th birthday of our geek squad. that is one of our secret weapons. the geek squad will be ringing the bell at the new york stock exchange tomorrow in celebration of that birthday. advice, service, and convenience. convenience of being a multi channel retailer, about 50% of the orders on our website, the customers decide to pick up the orders in one of our stores are the customer decides to go to our website and they decide to go to our store because of the convenience. they can get it now. now is good for the customers. you like what you're seeing and you can get help and advice.

we have throughout the country 12 distribution centers. we also have 1400 stores. all of our stores can ship to our customers directly. we have unlocked $200 billion of inventory. when people go to the site, even though we do not have the product in one of the distribution centers, we will get it from the stores. or, we do not have a product in that particular store, but we will get it to you. convenience with returns. you get it at home, you don't like it, you can return it immediately. haul away, you have a big tv you do not know what to do, we will take care of it for you. convenience is how we fight the battle. that means a significant transformation for everybody in the company.

i think i have highlighted some of them. merchandising, marketing e-commerce, everything is being transformed significantly. let me illustrate that with the marketing function. 10 years ago, marketing was focused on tv, the insert in the sunday newspaper. with the data we have about our customers we have the opportunity to have targeted and highly relevant digitized marketing communication and really develop relevant communication with our customers. if you bought a ps4 last summer i can talk to you about some games. you bought a camera and maybe you want to talk about lenses. if you are moving, i can talk to you about how we can help you move and get equipped in your new place.

we have a customer database that we are leveraging to be helpful to our customers so it changes the game significantly. not all the transformations are fun and painless. we have taken out $860 million of costs into the system. because we are very advanced our focus now is shifting to growth. it is not always easy. you have product cycles, you have deflation. the tv from this year is much cheaper than two years ago. we are determined to grow the top line. great opportunities around new technology. there is a lot of talk about health and fitness technologies. technology can help reduce health care costs. we have a summit next week with

an insurance company, a hospital system, to see how we can work together to the benefit of customers and reduce health care costs and improve lives. everything in our homes are now connected. how can we help our customers take advantage of that? we are focused on a growing shares. significant growth opportunities for us. this hopefully gives you a flavor of the kind of transformation. frankly, we are not unique from that perspective. a company from nebraska, their stores are becoming a great destination. you want to go to their store to discover what they can do. also a great company from a direct consumer. very much emphasizing service.

williams-sonoma has transformed itself. 50% of their business is now direct consumer. all of these companies now combined stores and online to the benefit of their customers. if i generalize, the key drivers of these transformations are refocus on the customer, leveraging retailers' unique assets. everyone is going to be somewhat different. building new capabilities, really to innovate to the benefit of our customers. from that standpoint, it is still early days in that revolution. i have the image from jim collins, the famous business author about, you need to fire bullets he for you fire cannonballs. this is the idea that you have to try a great number of things.

in retail, you can experiment. we have 1400 stores. we can try things and see whether this works. i call this the bicycle theory it is very difficult to direct the bicycle. you fall. but if the bicycle is moving, if it is not moving in exactly the right direction, it is not a problem. you can always course adjust. there is a lot of experimentation that needs to take place. in that context, my comments about the future of main street would be incomplete if i did not talk about the help from governors. this is about the marketplace. in 2014 in this country, retailers who do not have a physical presence do not collect the sales tax. it is not about the internet versus brick and mortar. we do collect sales tax on our website.

we do not can should be to the -- contribute to the communities and so forth. we think it is an unfair situation. you were the first ones to raise that topic 10 years ago. many of you have led the fight. thank you for your leadership on this matter. this is clearly an issue that needs to be fixed. i do not know that anyone believes the government should be picking the winners in this country. the playing field is level, but the government should not pick the winners. according to the university of tennessee, the foregone revenue is