[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

GAO REPORT ON DUPLICATION OF
GOVERNMENT PROGRAMS; FOCUS ON
WELFARE AND RELATED PROGRAMS

=======================================================================

HEARING

before the

SUBCOMMITTEE ON HUMAN RESOURCES

of the

COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

__________

APRIL 5, 2011

__________

Serial No. 112-HR3

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Printed for the use of the Committee on Ways and Means

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COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON HUMAN RESOURCES

GEOFF DAVIS, Kentucky, Chairman

ADRIAN SMITH, Nebraska LLOYD DOGGETT, Texas
ERIK PAULSEN, Minnesota JIM McDERMOTT, Washington
RICK BERG, North Dakota JOHN LEWIS, Georgia
TOM PRICE, Georgia JOSEPH CROWLEY, New York
DIANE BLACK, Tennessee
CHARLES W. BOUSTANY, JR., Louisiana

Jon Traub, Staff Director

Janice Mays, Minority Staff Director

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C O N T E N T S

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Page

Advisory of April 5, 2011, announcing the hearing................ 2

WITNESSES

Kay E. Brown, Director, Education, Workforce, and Income
Security, U.S. Government Accountability Office................ 7
LaDonna Pavetti, Vice President for Family Income Support Policy,
Center on Budget and Policy Priorities......................... 28
Robert Rector, Senior Research Fellow, Domestic Policy, The
Heritage Foundation............................................ 38

SUBMISSIONS FOR THE RECORD

Elizabeth Lower-Basch, statement................................. 75
Harry J. Holzer, statement....................................... 82
Jim Gibbons, statement........................................... 86
Members of the New Markets Tax Credit Working Group, letter...... 91

GAO REPORT ON DUPLICATION OF
GOVERNMENT PROGRAMS; FOCUS ON
WELFARE AND RELATED PROGRAMS

----------

TUESDAY, APRIL 5, 2011

U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Human Resources,
Washington, DC.
The subcommittee met, pursuant to call, at 2:00 p.m., in
Room B-318, Rayburn House Office Building, the Hon. Geoff Davis
[chairman of the subcommittee] presiding.
[The advisory of the hearing follows:]

HEARING ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

Davis Announces Hearing on GAO Report on Duplication of Government
Programs; Focus on Welfare and Related Programs

Tuesday, March 29, 2011

Congressman Geoff Davis (R-KY), Chairman of the Subcommittee on
Human Resources of the Committee on Ways and Means, today announced
that the Subcommittee will hold a hearing on duplication in welfare and
related programs under the Subcommittee's jurisdiction. The hearing
will take place on Tuesday, April 5, 2011, in Room B-318 Rayburn House
Office Building, beginning at 2:00 P.M.

In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only.
Witnesses will include the U.S. Government Accountability Office (GAO)
and other experts on programs under the Subcommittee's jurisdiction.
However, any individual or organization not scheduled for an oral
appearance may submit a written statement for consideration by the
Committee and for inclusion in the printed record of the hearing.

BACKGROUND:

In a March 2011 report to Congress, GAO identified opportunities to
reduce duplication in a broad spectrum of government programs. Their
report identified 81 separate areas for Congress to review--including
34 areas in which programs and agencies have overlapping goals or
provide similar services to the same population, and 47 other areas in
which Congress may wish to take action to reduce program costs, among
other goals.

As a part of this project, GAO reported that in Fiscal Year 2009
the Federal Government spent $18 billion operating 47 programs
providing employment and training services, spanning nine agencies. GAO
determined that 44 of the 47 programs overlapped with at least one
other program, providing at least one similar service to a similar
population. The report specifically mentioned overlap between the
Temporary Assistance for Needy Families program under the
Subcommittee's jurisdiction, the Employment Service supported by
Federal unemployment funds, and Workforce Investment Act programs,
indicating there may be opportunities to streamline the delivery of
employment services across those and other programs. The report noted
that overlapping programs may include different eligibility criteria or
objectives, or that they may provide similar types of services in
different ways.

In addition to the duplication GAO found, there are a number of
income-tested programs and tax credits under the jurisdiction of the
Committee on Ways and Means that provide similar income, child care,
and child welfare services and supports to individuals with low or
modest incomes.

In announcing the hearing, Chairman Davis stated, ``The Government
Accountability Office uncovered a tremendous number of Federal programs
that provide overlapping services. Congress needs to review current
programs to see how we can reduce that duplication and deliver better
services to those who need them. This hearing seeks to do just that for
welfare and related programs in this Subcommittee's jurisdiction, so we
can ensure that taxpayer funds are well spent, and individuals receive
the help they need to become self-reliant as efficiently as possible.''

FOCUS OF THE HEARING:

The hearing will focus on overlap among welfare and related
programs under the Subcommittee's jurisdiction, and consider
recommendations for reducing such duplication and providing more
effective services to low-income families.

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Chairman DAVIS. Good afternoon. Thank you for joining us.
We have three purposes in today's hearing: first, to learn
about duplication in programs serving low income children and
families; second, to ask whether, given that duplication,
current programs are spending taxpayer money wisely; and third,
to consider how we can better or what we can do better to help
more of our neighbors in need become self-reliant.
The most recent data on program duplication came in a well
publicized report GAO released in March, which found literally
dozens of programs with similar or overlapping objectives and
services provided. The report noted that by fixing this
problem, ``The Federal Government could potentially save
billions of dollars annually and help agencies provide more
efficient and effective services.''
Another GAO report released in January focused on a subset
of the larger overall problem: how the Federal Government
spends $18 billion on education and training programs across 47
different initiatives in nine different Federal agencies. Of
these programs, GAO found that only one in ten had even been
evaluated for effectiveness in the last seven years, and almost
all of them overlapped with one or more programs.
Since one of the programs in question is the Temporary
Assistance for Needy Families program under our jurisdiction
and that program needs to be reauthorized this year, we should
all take note of those facts.
Unfortunately, the redundancy does not stop there.
Depending on how you count, the Ways and Means Committee
oversees no less than six income support programs, four child
care programs, and nine child welfare programs. That includes
both spending and tax programs, which have mushroomed in number
and expense in recent years.
One example of that duplication and overlap involves the
Social Services block grant program, which provides $1.7
billion each year to States. This program has no eligibility
criteria and requires no matching funds from States. States use
almost a third of this money for services provided by other
programs, such as foster care and child care.
While States rightly desire flexibility to meet the needs
of the people they serve, common sense suggests that the
Federal Government should not operate multiple programs serving
the same purpose, each with different eligibility, reporting,
and accounting requirements. Such duplication can create a
complex labyrinth that States implementing programs, but more
importantly, real people in need of help, are forced to
navigate.
And helping those in need is the real point of this, after
all. As President Obama stated in his Inaugural Address, ``The
question we ask today is not whether our government is too big
or too small, but whether it works. Where the answer is yes, we
intend to move forward. Where the answer is no, programs will
end.''
Our goal today is to review how current programs in our
jurisdiction work and how they can be made to work better. In
the current fiscal climate, it is especially important to
understand where duplication exists, how we minimize that
duplication and achieve savings, and ultimately how we can
provide better services in a more timely manner to those in
need.
We look forward to all of our testimony on those points,
and without objection, each member will have the opportunity to
submit a written statement and have it included in the report
at this point.
Mr. Doggett, do you care to make an opening statement?
Mr. DOGGETT. Yes, Mr. Chairman. Thank you.
I agree with you regarding the need to find effective
answers to each of the three important questions that you pose
for this hearing and stand ready to work with you on proposals
to make programs more effective and efficient so we can
maximize the impact of every taxpayer dollar in advancing some
critical objectives, such as helping those unemployed through
no fault of their own prepare and find work.
I do, however, vigorously oppose efforts to use terms such
as ``efficiency'' and ``streamlining'' as an excuse to
eliminate help to people that need it most. It is noteworthy
that of the 34 areas that the Government Accountability Office
included in its recent report reviewing overlap, duplication
and fragmentation, only one of the 34 mentions a program within
this subcommittee's jurisdiction, the appropriate focus of
today's hearings.
As to that area, employment and job training services under
TANF, the GAO suggestion about merging offices sounds to me to
be constructive, and I look forward to hearing more about it.
Providing a more unified administrative structure could
potentially make it easier for clients to access services.
One initiative that might help the states move more
forcefully in that direction is the President's Partnership
Fund for Program Integrity that we have discussed before at a
prior hearing. GAO focused on a number of areas within the
jurisdiction of the Ways and Means Committee. One of the most
important of those is better oversight of our tax revenue.
Notably, GAO reiterated its longstanding recommendation that
tax expenditures should be subject to increased scrutiny to
help identify ineffective and redundant spending through the
Tax Code.
I strongly agree with that recommendation and the need to
take a look at corporate tax loopholes, such as those that
allow General Electric to avoid paying its fair share for our
national security.
In addition, there are several recommendations on tax
compliance to close the $300 billion tax gap, including
recommendations to stop tax shelters and abusive transactions,
and outside the jurisdiction of the Ways and Means Committee,
of course, some of the biggest savings were to be achieved at
the Pentagon. GAO identifies six more areas, six areas out
there where significant savings from program duplication can be
achieved, and I hope progress can be made there.
As we look at potential duplication within our
subcommittee's jurisdiction, it is important to recognize that
often multiple programs, sometimes providing similar services,
exist because the level of need far exceeded the limitations of
the original program. For example, the Workforce Investment Act
was meant to be the focal point for providing job training
services to the unemployed and underemployed, but WIA only
provides training to fewer than 300,000 workers across the
whole country each year.
Since we have over 13 million unemployed looking for work,
it is no surprise that other programs, including TANF, have
become sources of vocational training. Unfortunately, the
mindless cutting of a number of these programs under H.R. 1
that we have under consideration this year would result in the
closure of two-thirds of the employment centers in my home
State of Texas and raise other concerns across the country.
I hope we will avoid that path as we seek legitimate ways
to achieve efficiency and effective use of taxpayer dollars
that meet the legitimate needs of many struggling Americans.
And I thank you, Mr. Chairman.
Chairman DAVIS. Thank you, Mr. Doggett.
Before we move on to our testimony, I would like to remind
the witnesses to limit their oral statements to five minutes.
However, without objection, all of the written testimony will
be made part of the permanent record.
Our distinguished panel this afternoon, we will be hearing
from Kay Brown, Director of Education, Workforce, and Income
Security at the U.S. Government Accountability Office; Dr.
LaDonna Pavetti, Vice President of Family Income Support
Policy, Center on Budget and Policy Priorities; and Robert
Rector, Senior Research Fellow, Domestic Policy, The Heritage
Foundation.
Ms. Brown, please proceed with your testimony.

STATEMENT OF KAY E. BROWN, DIRECTOR, EDUCATION, WORKFORCE, AND
INCOME SECURITY, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

Ms. BROWN. Chairman Davis, Ranking Member Doggett, and
Members of the Subcommittee, I am pleased to be here today to
discuss our work on some of the Nation's key programs, those
that help low income families, vulnerable children and others
in need.
While they are essential, our work has shown that the
multiplicity of different programs involved may be inefficient
and unnecessarily costly. Given concerns about fragmentation,
duplication and overlap in government programs today, I will
discuss three points: key characteristics of these programs;
problems in administering them; and actions to address these
problems.
First, on the programs, multiple programs and tax credits
under your jurisdiction provide income support, child care and
child welfare services to individuals and families in need.
Additional programs help meet needs in other areas, such as
housing and nutrition, and are under the jurisdiction of other
committees.
Some of these programs are funded by block grants that
allow States flexibility in how they allocate the funds, while
others are targeted to specific populations. In some cases, the
programs are designed to service everyone who is eligible,
while in others the funding is capped. Several require States
to provide matching funds.
Moving on to problems in administering these programs,
first, they are fragmented. That is, they serve some of the
same broad areas of need, but are administered by at least six
different Federal agencies.
Further, services are provided by numerous State and local
agencies, as well as for profit and nonprofit organizations. In
fact, this patchwork of programs is too fragmented and overly
complex for clients to navigate, for program operators to
administer efficiently, and for program managers and policy
makers to assess program performance.
For example, low income families often receive aid from
several programs, such as TANF, Child Care and Nutrition
Assistance. However, the complexity and variation in
eligibility rules and other requirements among these programs
contribute to time consuming and duplicative administrative
processes, complicate the work of case workers, and contribute
to errors.
Also, information gaps can hinder program oversight. For
example, our work on the TANF Program has shown that work
participation rates, the key performance measure for the
program, do not appear to be achieving their intended purpose.
Further, although States have shifted a large share of TANF
funds from cash assistance to other supports, such as child
care subsidies and child welfare, not enough is known about how
these funds are used.
Moving on to what actions can help address these issues,
first, simplifying policies and processes could save resources,
improve productivity, and help insure the accuracy of benefits.
However, when making this type of change, it is important to
think about the effect on program benefits. That is, will more
or fewer people be eligible with the changes?
Consolidating programs can also help ease Federal rules and
requirements and save some administrative costs. However, in
this case, care must be taken to insure that intended target
groups can still receive benefits.
Facilitating technology enhancements, such as data sharing
across programs can streamline eligibility processes and help
identify fraud.
And, lastly, fostering innovation and evaluation by States
and localities can help the Federal Government determine which
strategies are most effective without investing time and
resources in unproven strategies.
In conclusion, because these programs have evolved over
time to meet various needs, it is not surprising to see some
fragmentation of administration, overlap in populations served,
and duplication of services offered. Some of these features
may, indeed, be warranted, for example, to insure that certain
populations are served. However, our work indicates that
further exploration of the extent of fragmentation, overlap and
duplication could help better identify ways to streamline and
improve services and programs.
This concludes my statement. I am happy to respond to any
questions.
[The prepared statement of Ms. Brown follows:]

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Chairman DAVIS. Thank you very much, Ms. Brown. Dr.
Pavetti, if you could give your testimony.

STATEMENT OF LADONNA PAVETTI, VICE PRESIDENT FOR FAMILY INCOME
SUPPORT POLICY, CENTER ON BUDGET AND POLICY PRIORITIES

Ms. PAVETTI. Thank you. Thank you for inviting me to
testify today.
I have spent my entire professional career assessing the
implementation of user programs for low income Americans. Since
the passage of welfare reform, I have visited hundreds of local
welfare offices and job training programs and I have had the
privilege in doing that of talking with many program
participants and observing them as they participate in
activities that are designed to help them find and sustain
employment.
During my work, I have had the opportunity to witness first
hand the development of a safety net that really is aiming to
help low income families realize their dreams of bringing home
a steady paycheck and of supporting their families and creating
a brighter future for their children. And what I would like to
do in my testimony today is to share with you some of what I
have learned over the years of doing that work.
First of all, when we focus on program duplication, we tend
to think of program duplication as having a negative
connotation to it, and something that if we remedied, it could
save government money, but that is not always the case, and
that is not the case when program funds are limited. Right now
States do not have sufficient funding to provide child care
assistance to all low wage workers, and they do not have
sufficient funds to adequately fund their child welfare
programs, especially those programs that provide preventative
services to at risk families.
Job training programs, which is one of the areas that is a
particular interest of mine and where I have spent time because
of my work on TANF, illustrates, I think, why duplication is
not always what it seems on the surface. In their analysis, GAO
identified 47 programs, many of which overlap in some way. But
based on what I have seen in the field, it is not the case that
individuals are receiving assistance from multiple employment
and training programs. Rather, those programs exist to insure
that people who face special employment needs actually have a
greater chance of accessing programs and participating in
programs that are designed to meet their specific needs.
So we have programs for ex offenders because they face
special challenges. The same for TANF recipients, who often
have serious barriers to entering the labor market. So by
having specific programs, we increase the chance of them
actually having success.
I also would like to give an example of what we have seen
as being one of the most successful innovators in integrating
programs, and that is Utah. Utah is a State that has one of the
most integrated work-based network of services, and it provides
an example of both the opportunities and, I think, the limits
of reducing program duplication.
Utah houses all of its safety net programs and its
employment assistance programs under one agency, and that means
that individuals coming in who are applying for unemployment
insurance and individuals coming in to apply for TANF have
access and come through the same process, and they also have
access to roughly the same set of services.
They have made that system work by trying to adopt
comparable standards sometimes higher than the standards that
programs require, and regardless of what makes people eligible.
And what they have done is they have taken funding streams and
tried to use them for different groups of people.
However, that system has come at a price, and differences
in program goals and performance standards have prevented the
agency from implementing a fully unified system that provides
services based on individual needs.
For example, their WIA performance standards focus on
employment outcomes, while their TANF standards actually focus
on participation in a set of narrowly defined program
activities with no real regard for the employment outcomes.
TANF also requires much stricter verification requirements,
and if they were to apply those to everyone who came through
that door, it would cost much more than it costs them now.
I think that Utah also stands out in the amount of their
TANF funds that they have used to fund their employment
training activities. In 2009 they spent about a quarter of
their Federal and State TANF funds on their program, and if we
were going to get to that level for all of the states, we would
have to more than double the investment that we are actually
making.
I think there is a number of things that Congress can do to
make it easier to do what Utah has done and to integrate a
broad range of programs. One is to develop a common set of
goals for programs that serve similar services. The other is to
reduce those cross-program barriers. Another is to increase the
capacity of programs to serve people who have the greater
barriers and to revamp the program performance measures so they
are consistent across programs and so that programs have an
easier time working together and trying to achieve the same
thing.
I know these are difficult economic times, and there are
real fiscal constraints facing our nation. However, we should
not think we can solve our fiscal problems by decimating the
safety net. Cutting funding deeply for programs to help low
income Americans work, achieve self-sufficiency and secure jobs
that can support their families would not represent a step
forward.
Some of the cuts that have been proposed would make it
harder for low income Americans to work, while also making it
less likely that people who need training would actually get
it.
I think there would also be risks for the economy. What we
have seen is that these programs have worked the way we intend
them to work during the economic downturn--they have increased
their reach to be able to provide that safety net, and I think
we want to do that.
So one more statement. Rethinking programs is important,
but I think we need to think broadly about what we are trying
to achieve and how to best achieve that, and make sure that we
really are thinking not only of low income programs, but across
the board of how we can make things better for all Americans.
[The prepared statement of Dr. Pavetti follows:]

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Chairman DAVIS. Thank you, Dr. Pavetti.
Mr. Rector.

STATEMENT OF ROBERT RECTOR, SENIOR RESEARCH FELLOW, DOMESTIC
POLICY, THE HERITAGE FOUNDATION

Mr. RECTOR. I want to speak today about what I consider the
greatest budgetary secret in the Nation and in Washington,
which is the hidden means tested welfare state. Most people are
completely unaware that the second largest category of
Government spending across the nation happens to be spending on
the poor. If you were to look in total, you find that the
largest spending is, in fact, on Social Security and Medicare.
The second largest is spending on more than 69 different
Federal programs to assist poor people, which with their
mandatory State contributions now approach about $940 billion a
year. That is the second largest overall category of Government
spending in the country. It outstrips spending on public
education. It vastly dwarfs spending on national defense, but
people are largely unaware of this.
They are unaware of this because all discussions about
spending on the poor basically take these 69 programs and talk
about them one at a time. It is as if in talking about the
defense budget you talked about marine logistics and then you
talked about Air Force personnel, and you never put it together
to look at the total amount that is being spent.
This chart shows inflation adjusted spending on the poor on
these 69 different programs starting back in 1950 and through
2008. A lot of people, when they think about welfare, think it
is like a roller coaster: you spend a certain amount, then you
have a recession, spending goes up, at the end of the recession
spending comes back down.
Sorry. I do not see spending ever going back down. What
happens in our system is that during a recession spending goes
up. If we were to add the last two years on there, it is a 30
percent increase in spending, and at the end of the recession
it never comes back down. What we do is increase spending
slowly or increase spending rapidly. Spending never goes back
down.
We are spending today 13 times as much after adjusting for
inflation as when Lyndon Johnson launched the War on Poverty.
About half of this spending goes to families with children,
which is of particular concern to this committee. Another half
of it goes to the indigent elderly and to the disabled. But
that means that we are spending over $450 billion on low income
families with children.
No one has any idea of this because you only examine one
program at a time. You never add it up. Suppose we did the
whole Federal budget like that. You simply spent on whatever
seemed desirable, never added up the total amount of spending.
That is what we do with the welfare state.
This next chart compares means tested welfare spending over
the last 20 years compared to other categories, such as Social
Security and medicare. The dark blue line is the increase in
means tested welfare, which has grown by, I think, 300 percent
over that period. This is, in fact, the fastest category of
spending in the entire government for the last two decades,
even before the current recession.
But if you were to talk to, for example, President Obama or
anyone from the left, they would say that we have actually cut
this spending. How do they possibly do that? They do that by
focusing on one program at a time that may not increase as fast
as inflation and ignoring the growth in the other 68 programs.
By that gimmick, we continue to have larger and larger
spending, now approaching $1 trillion a year without the public
or you as decision makers having any idea how much we are
spending.
Now, most people see that over the last two years,
President Obama has increased the spending by 30 percent in
these 67 different programs. They say, ``Well, of course. That
makes sense because we have had a recession. We would expect
the spending to go up.''
But when you look at Obama's own budget projections for the
next ten years, which are shown on the chart, combined Federal
and State is on red in that chart and yellow is Federal only;
this spending never goes back down. It goes up during the
recession, and then it continues to climb. Within a few years,
we will be spending $1 trillion a year at the same time that as
a Nation we will be running deficits of roughly $1 trillion a
year.
People talk about shredding the safety net. We should focus
on the initial question. How did you expand the safety net by
50 percent and why isn't it coming back down after the
recession?
Now, I would propose that, in fact, the United States
running deficits of close to $1 trillion a year simply cannot
afford this level of spending. It will not benefit poor people
in the United States if we put this country into bankruptcy,
which is quite clearly where we are going now and where we are
going under Obama's proposed budgets, which projects $1
trillion a year deficits as far as the eye can see. That will
not help the poor.
I propose that one of the ways that we can begin to bring
the deficit down is to simply create some budget constraint in
the amount that is being spent here. what I would----
Chairman DAVIS. Excuse me, Mr. Rector. Your time has
expired.
Mr. RECTOR. Okay.
[The prepared statement of Mr. Rector follows:]

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Chairman DAVIS. I think we will have a chance to get into
this a little bit more as we move to questions, which we are
going to do now.
I will go ahead and open. First, for Ms. Brown, based on
your March report and today's testimony thus far, what can you
tell us about the current number of welfare and related
programs this subcommittee oversees, along with complementary
tax credit programs?
Is the current number of such programs at an all time high?
Ms. BROWN. When we prepared the testimony for today, we
looked at a selected number of programs under this committee,
and we actually are considering right now what our next steps
will be for the next round of our mandatory reporting next
year, and as we do that, one of the things that we are
considering is whether we should be looking at the full gamut
of programs in this committee.
Because I know there are certain programs at HHS, I have
not mentioned, such as Runaway and Homeless Youth and Tribal
TANF and a lot of smaller programs that we did not include in
our testimony today.
Chairman DAVIS. Hopefully, we will be able to receive some
more information on that as we continue on this dialogue.
How about spending on those programs? Have we ever spent
more on those programs than in the past two years?
Ms. BROWN. Than in the past two years? We did not do a
spending analysis, but I would assume that with the Recovery
Act funds the spending was higher than it has been, and----
Chairman DAVIS. So you would say we are spending higher. We
are at the highest all time level now.
Ms. BROWN. I do not know where the spending level is now,
after the end of the Recovery Act funding or the partial end.
Chairman DAVIS. Okay, and finally, what do we know about
current deficits? Have they ever been greater?
Ms. BROWN. GAO is on record as saying that we are very
concerned about the deficit, and that we think there needs to
be a serious effort to look at what changes need to be done in
order to bring the deficit back in line.
Chairman DAVIS. But would you say that this is an all time
high?
Ms. BROWN. I am not the budget expert either at GAO. Sorry.
Chairman DAVIS. Okay. Well, I think the numbers are fairly
straightforward. We have some fairly substantial deficits.
Just in closing, Mr. Rector, would you care to comment
specifically about welfare and related programs, their number
and amounts spent and contributions to the deficit and debt?
Mr. RECTOR. Well, I only look at major welfare programs
which spend more than, say, $15 million a year. Those are at a
record high. The level of spending after adjustment for
inflation is also at a record high.
I would also comment that it was at a record high before
the recession began, and again, the trick about this is if you
look at that pattern of spending, when you have a recession,
this aggregate spending tends to jump up by 20, 30, 40 percent,
and then it never comes back down.
So we are now at a record high, but each year in the
future, it is going to continue to go up. We cannot afford that
level of spending. We are basically borrowing from the Chinese
in order to spend $1 trillion a year on means tested welfare
here.
Chairman DAVIS. As we move forward in continuing
discussions on reforms of the process and just looking at this
from an engineering perspective in my professional background,
I see so many of the challenges really have to do with not
simply spending, but also the processes that do not communicate
between the agencies and the lack of interlinkage. Integration
done right could be a very powerful tool.
The challenge that we sometimes face in this is thinking
that we will just keep pouring water into the swamp without
actually addressing the issue of the obstacles that we face
inside of that. I am hopeful that we can talk about integrated
information systems, process improvements that would have a
natural effect of removing redundancy as we continue the
dialogue and working closely with my friend Mr. Doggett.
Would you like to inquire?
Mr. DOGGETT. I certainly would.
Thank each of you for your testimony.
Mr. Rector, your testimony refers to 69 means tested
programs. Would it be convenient for you this week to supply
the committee with the specific identity you described? You
categorize them in your written testimony, of those 69
programs?
Mr. RECTOR. They are in the back of my testimony.
Mr. DOGGETT. Oh, okay. I just did not look far enough.
Mr. RECTOR. Okay.
Mr. DOGGETT. And you do note in your written testimony that
over half of this money spent in these programs relates to
health care and over half of it is spending devoted to the
disabled and the elderly.
Mr. RECTOR. Yes.
Mr. DOGGETT. Dr. Pavetti, looking at the initiative of the
Republican Study Committee, they include, and I will check here
in the back to see if they are included in Mr. Rector's
testimony, the Pell Grants, Head Start, among others. What will
be the effect of the kind of reductions that the Republican
Study Committee proposed in those programs on the folks that
rely on them now?
Ms. PAVETTI. We estimate that you would see over $2
trillion in cuts for the low income people in six years from
what is proposed, and they would have a disproportionate impact
on elderly and disabled individuals, as well children who are
the primary beneficiaries.
I think both what Mr. Rector presented and what is in the
Republican Study Committee does something that I think we have
never seen before, which is to apply the term ``welfare'' to
programs that nobody really thinks of as welfare.
Mr. DOGGETT. Yes. Now that I have made it to the appendix
to his testimony, the largest one in education, over half of
the education expenditures of which he complains is in Pell
grants.
Ms. PAVETTI. Pell grants is one.
Mr. DOGGETT. I do not think most students, most Americans
view that student financial assistance so that someone can get
all the education they are willing to work for as welfare.
Ms. PAVETTI. Right, and if you look at the income support
ones, SSI is on there, and SSI is the way in which we provide
assistance to people who go through a very lengthy process of
demonstrating that they are disabled and not able to work and
have not been able to enter the labor market.
So I think that, again, it lumps together a lot of things
that I think have very different purposes, and I think rather
than making clearer what we are spending, it actually muddies
the waters and makes it harder to have a very informed
discussion about what our priorities should be and how we want
to try and help to make a difference in people's lives.
Mr. DOGGETT. As to the job training programs within this
subcommittee's jurisdiction, you referenced Utah as an example
of how we can, and we have actually had some testimony
previously from Utah in the subcommittee, but you reference
them as an example of what we can do and what the limits of
what we can do in eliminating duplication might be.
To the extent that there are continued challenges in Utah
with developing common goals for these different programs, is
that something that you think we should be addressing at the
Federal level or is this a matter of the States needing to do a
better job?
Ms. PAVETTI. Well, the States can do a better job, but
there are also constraints that are Federal constraints, and
within this committee's jurisdiction is TANF, and that is up
for reauthorization, and the TANF rules are incredibly
restrictive, and they really do create huge constraints at the
State level. So if those are not changed and if States are not
given more flexibility to be able to make some changes so that
they can be consistent with other programs, States really
cannot come up with completely integrated systems and treat all
people the same who come in their door based on their needs
rather than whether they are eligible for one program or for
another.
Mr. DOGGETT. Do you have some specific recommendations that
you might supplement your testimony to the committee for what
we should be doing in the reauthorization of TANF to accomplish
that objective?
Ms. PAVETTI. Sure, I can do that. I can definitely do that.
Mr. DOGGETT. And, Ms. Brown, you mentioned that one of
these areas for further study relates to not really being able
to determine how the States are using their TANF money, and
that is something we hopefully will get more information on
this year, isn't it?
Ms. BROWN. Correct. We are concerned about the fact that
the one major performance measure for TANF is focused on work,
and work activities, and that is perfectly appropriate, but the
fact that the other uses for the funding for TANF are not
tracked is a concern. We would like to know how those funds are
being used.
It is important because they have increased significantly
over time.
Mr. DOGGETT. Thank you.
Chairman DAVIS. Thank you very much. The gentleman's time
has expired.
Mr. Paulsen.
Mr. PAULSEN. Thank you, Mr. Chairman, and also thanks for
holding this hearing and for our witnesses for being here
today.
Mr. Rector, maybe you can just comment real quickly, just
to follow up on Dr. Pavetti's statement, but would you clarify
from your perspective? Is the definition of welfare that you
use any different than the standard definition of welfare?
Mr. RECTOR. No, it is pretty much the same. For example,
right here, this document in my hand is the Congressional
Research Service. ``Cash and non-cash benefits for persons with
limited income.'' It lists means tested welfare.
There is a 98.5 percent overlap between the programs that I
have in my list and what are in this CRS report. This other
book is the most common book written on welfare. You would find
various versions of this book in every college library for the
last 30 years. It is titled, ``Programs in Aid of the Poor.''
Every single program that is on my list is in this book. This
is the standard text.
In fact, what she is talking about, which is what the
center has done for 20 years, is any time you try to talk about
massive total spending close to $1 trillion, they will pull out
one or two programs and quibble. They used to pull out veterans
programs that are about one percent of this total and try to
obscure the issue by that.
The fact of the matter is 90 percent of this spending is
cash, food, housing, medical care for low income people.
Agreed, half of it does go to the elderly and disabled. Roughly
the other half goes to families with children, but the bottom
line is the public is totally unaware that we are spending
virtually any of this money. People think we ended welfare aid
to the poor back in the 1990s. When I tell them that we are
spending close to $1 trillion a year, everyone is simply
astonished. We do not report it.
Mr. PAULSEN. Thank you.
And I know beyond the wasted funds that, you know, we are
talking about with this hearing and all of the duplicative
programs, and I cannot imagine how confusing it must be for
families to have to navigate some of these programs that they
are applying for, but, Ms. Brown, can you comment?
I think maybe one of the most discouraging parts of your
testimony that you mentioned is when you stated that the need
for improving the administration of these programs has actually
been voiced recurrently for several decades, and you talked
about some of the changes in, I guess, the 1996 welfare reforms
and what States have been going through in terms of granting,
using more flexibility in implementing new programs would need
to be looked at, and simpler policies, better technologies are
available.
Knowing that that is the case and there is more innovation
out there, and as you have looked at the evaluation, what can
this subcommittee do or what should we be doing to improve the
way these programs operate or the way they are administered so
that we can actually reduce these inefficiencies and save
taxpayer money?
Ms. BROWN. I think regardless of how many programs you want
to consider, the most important thing is to be clear on what we
want these programs to achieve and who we want to be served and
how we are going to measure that.
And to the extent that there are barriers that were
discussed as far as different kinds of performance measures or
constraints in sharing data, those are the kinds of things that
you could help with.
Mr. PAULSEN. Okay. Mr. Rector, do you have any follow-up to
that in terms of measuring for this subcommittee to actually
look at and dive into?
Mr. RECTOR. Well, the bottom line is you really have to
have some awareness of how much is being spent. When I look at
these numbers, it clearly suggests to me that you are spending
close to $30,000 for each low income family with children. I
cannot imagine where that money goes, but if you just take the
total amount that is going out the door, which is over 400
billion, divide it by any measure of low income households, you
come up with this very, very large number.
We have to begin to understand this, and we do not
understand it because effectively the entire discussion about
the welfare state is as if you had a jigsaw puzzle with 69
pieces. You threw them all over the room, and then you have
hearings about one piece at a time.
I have been doing this for 25 years. When you have that
hearing, you pretend that that single piece, that single
program is the only thing that affects low income people. In
fact it would be very difficult to find a family that receives
assistance from only one program. They receive assistance from
a half a dozen, a dozen programs piled on top of each other,
and we have no idea what they are getting. We have no idea of
basically how much we are spending, and we are spending
ourselves into bankruptcy here. We have to get this under
control.
Mr. PAULSEN. Well, obviously, if we were starting a brand
new Government from scratch, I mean, do any of you think that
we would have 47 education and training programs, nine child
welfare programs, four child care programs, and six income
support programs if we established a Government or set it up?
I mean, given where we are, I guess we are trying the task
now of what is the best path forward. Any thoughts on that? I
cannot imagine that we would have all of these duplicative
programs if we were starting from scratch.
Ms. PAVETTI. I think we probably would not have those if we
were starting from scratch, but I think what I tried to say in
my testimony, and I think it is important is part of why we
have multiple programs is because of limited funding that is
not sufficient to serve all those in need. Targeted programs
are created so that people who do not get access, have a
greater chance of being served.
Chairman DAVIS. Thank you.
Ms. PAVETTI. If you had one program, you would have the
issue of trying to make sure that there is equity in who gets
access.
Chairman DAVIS. The gentleman's time has expired.
I think the gentleman raised a compelling question. Perhaps
each of you would submit comments for the record.

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Just from my own professional experience, oftentimes we
will create a program around a program that is a work-around to
a systemic flaw, and our hope, and Mr. Doggett and I have
talked about this before, is looking at ways to integrate
rather than simply create more overhead in the long run.
The efficient use of taxpayer dollars is a very important
and germane discussion that members care about on both sides.
With that, I would like to recognize Ms. Black from
Tennessee.
Mrs. BLACK. Thank you, Mr. Chairman.
And thank you, panel, for being here today.
I want to go to you, Mr. Rector, and your written comment
and I think you also shared it with us verbally, is that since
the beginning of the War on Poverty, spending on the poor has
increased 13 fold after adjusting for inflation, and yet
throughout the steady 40-year climb in spending there is still
this shrill claim that the poor are being slashed.
What I have seen in my nursing days over the last 40 years
is that we have these programs, and I have worked with people
in these program, and yet I do not see that the programs really
are doing what we want them to do. If our goal is to get people
out of poverty and move them on, it does not appear that these
programs are working.
So we seem to be doing the same things over and over and
over again, and you are not getting results.
What I would like each of the panelists to talk a little
bit about is about the measurement. I think, Ms. Brown, you
just mentioned it, about measuring, and there is one particular
program for infant mortality back in the State of Tennessee
that we adopted, and the thing that excited me so much about
that is it actually is evidence based. It has measurements. It
can show through metrics that it does work. It is worth the
dollars that we are putting into the program
And yet when we looked at this program on infant mortality,
we had like 37 different programs that were addressing infant
mortality in our state, and none of them had metric tools to
really say they were being effective.
And so what I would like to know is moving forward, as we
look at these programs and we certainly see in all of these
testimonies we have duplications of programs, what do you think
we need to do in order to, first of all, put measurement tools
on them and then to narrow them down so we can find best
practices and find those that are really working where it will
be value on our dollar?
Mr. RECTOR. If I can take the first part of this question:
how can you increase spending 13 fold and spend over $16
trillion and still have press reports and the President saying
that you slashed spending?
You just saw an example of it here. Since 2007, aggregate
means tested spending has been increased by 50 percent, but did
you see that in the New York Times? Did you see that in the
Washington Post? Did you see that on CBS News? No.
The spending went up 50 percent. Now, the Republican Study
Committee bill simply says why don't we take that spending,
adjust it for inflation and bring it back down to where it was
before the recession, and what was that? It is slashing the
safety net.
So when spending goes up, it is invisible. It is off the
screen. No one acknowledges it. We hide it in Washington. Then
a few people try to say, hey, let's take it back to where we
were before the recession, oh, my gosh, kids will be dying.
You know, I have watched this for 20 years. It happens over
and over again. When spending goes up, it is invisible. If you
try to apply the slightest constraint, then you are victimizing
the poor and slashing the safety net.
Basically what we are doing here is flim-flamming the
American taxpayer.
Ms. PAVETTI. Just on the measurement issue, I think we have
made major progress measuring poverty in a way that actually
captures what the safety net does. So if you look at
Supplemental Nutrition Assistance, health care, those do not
get counted in our standard poverty measure, and when they are
counted you see that they have reduced poverty.
And in 2005, if you take a group of means tested programs,
the EITC, SNAP, SSI and TANF, they kept 14 million people out
of poverty and six million of those were kids. So if we did not
have those programs, we would have much higher rates of poverty
than we have now.
The other thing that is important, there are two other
points that I think are important of what is going on. One is
that because income inequality has increased and the labor
market is very sluggish, low income programs have to work much
harder to help people to stay above the poverty line. So part
of it is a labor market issue.
The other is that health care costs across the economy, not
only those that are targeted to the poor, are also increasing
at faster rates than other programs, and that gets counted in
what is going on in the overall spending.
Mrs. BLACK. Doctor, in all of these programs that you have
looked at over your years of investigating these, do all of
these programs have measurement tools to say at the end of the
day this is what we want to achieve and this is what is being
achieved and when it is not being achieved, that we go back and
revisit it and either get rid of it or bring in a better
program that does work?
Ms. PAVETTI. They do not, but some of them do, and I would
say it is a credit to welfare reform----
Mrs. BLACK. What percentage?
Ms. PAVETTI. Pardon?
Mrs. BLACK. What percentage?
Ms. PAVETTI. I cannot tell you the percentage, but in
welfare reform we invested a lot of money to identify what
works best for whom, and so we need to, I think, continue to do
that. And I think you are right. We do need to be able to do
more measurement and to be able to make those choices about
what works and what does not.
Mrs. BLACK. I can only say that in the State of Tennessee,
in the programs that we looked at on the health care and the
family programs, very, very few of them actually had metrics
tools, and they were around for a number of years where they
never went away because somebody had a stake in them, and they
did not want to get rid of them because they belonged to
someone.
Chairman DAVIS. Thank you very much. The gentlewoman's time
has expired.
Mr. McDermott.
Mr. MCDERMOTT. Thank you, Mr. Chairman.
Program duplication is obviously a concern, but we know
that only one out of four poor children in this country is
covered. We have got 15 million kids in poverty. So there is a
gap. There is not an overlap. It is a gap really that you are
talking about here.
You have got 13 million people unemployed, and the Work
Investment Program only covers 300,000 of the 13 million. So it
is hard for me to know what in the world this hearing is all
about. It really ought to be about the gaps in the safety net
that we have.
I was interested in listening to you, and I was thinking. I
saw on television on 60 Minutes a program about a couple. She
was 40 years old and he is about 45, and they had two jobs and
they were making about $70,000 between them and they lost that.
They lost their jobs. And then they ran out of their
unemployment insurance, and they lost their home, and they
moved into their car with their three kids. So they are living
in their car.
And then they got a little money. They found a little job
and they got a little bit of money. So they moved up. The kids
said it was a lot better now that we are living in a motel
room, five people living in a motel room.
Now tell me what programs they are eligible for. These are
middle class people making $75,000 a year and suddenly go to
nothing. Their unemployment runs out. What do they have
available to them to keep their family together and keep their
kids from being hungry?
The kids talked about taking their bath in the morning in
the Walmart bathroom. They were parked in the Walmart parking
lot. So they went in to use the bathroom, right?
What is available to them? What is available to somebody in
these programs?
Ms. PAVETTI. Well, in every state they would be eligible
for food stamps.
Mr. MCDERMOTT. Ah, food stamps. How much do they get in
food stamps?
Ms. PAVETTI. It depends on their family size, but for a
family of three, the maximum benefit is $526. The actual amount
a family receives depends on their income and expenses.
Mr. MCDERMOTT. Okay. So they would be eligible for $300 a
month worth of food.
Ms. PAVETTI. And then depending on their circumstances and
what State they are in, they may or may not be eligible for
TANF benefits, and that in the median State is $429 for the
month.
Mr. MCDERMOTT. Depending on what State they're in. You mean
it is different from State to State?
Ms. PAVETTI. It is. It is very different from State to
State.
Mr. MCDERMOTT. You mean we allow the States to have
different standards for people?
Ms. PAVETTI. Completely. In TANF, yes.
Mr. MCDERMOTT. So you have got to be careful where you are
poor is what you are saying.
Ms. PAVETTI. Yes, and what we saw in the recession was some
States actually responded to the recession quite well and
others did not respond at all, and their case loads actually
went down.
Mr. MCDERMOTT. Like Michigan that just reduced its
unemployment benefits.
Ms. PAVETTI. Right, and in Michigan, their TANF case load
did not go up even though their unemployment rate was very
high. Their case load did not respond much to the recession.
Mr. MCDERMOTT. Now, I mean, we hear this testimony that all
of these people are welfare cases, and I have never heard the
elderly and the disabled called welfare cases before. That is a
kind of pejorative term related to people who do not try,
right?
Ms. PAVETTI. Right, and also Mr. Rector pointed to the
books, but those say for the poor and not welfare. I think that
term ``welfare'' is what is very misleading. It is often used
as a very pejorative term for people who are not working and
receiving public benefits, and I think that is the problem.
When you start talking about child care, which many people
believe we should be providing to help people go to work, that
we should be providing extra help to low income schools to help
kids bridge the gap--those are not what people think about when
they think about welfare programs, and that is what is
included.
Yes, they are programs for the poor, but they are not what
we think of as welfare.
Mr. MCDERMOTT. If I can get one other question here, the
inflated figure he uses, this huge number, God, it just blows
your socks off. Is any of that health care?
Ms. PAVETTI. A huge portion of that is health care. In
fact, not only is it health care, but one of the problems is
that Medicaid is actually a very lean program, and what we have
seen in Medicaid is that about a quarter of the beneficiaries
incurs about two-thirds of the cost because it includes elderly
and disabled who have much higher Medicaid costs.
Mr. MCDERMOTT. In Medicaid?
Ms. PAVETTI. In Medicaid, yes.
Mr. MCDERMOTT. Okay. So the solution would be to get rid of
the Medicaid program and just let people kind of go out and
figure out whatever they can do, right? You could save a lot of
money that way, right?
Ms. PAVETTI. Well, actually because Medicaid is a lean
program, if you look at Medicaid per beneficiary cost in
comparison to the private market, it actually is a lower cost.
So if you put it into the private market, it would actually
have increased costs, not lowered cost.
Mr. MCDERMOTT. Thank you.
Chairman DAVIS. Thank you. The gentleman's time is expired.
I would like to recognize Mr. Berg from North Dakota.
Mr. BERG. Thank you, Mr. Chairman. Thank you for being here
to present.
I just enjoy some of this perspective. Certainly
Representative Paulsen said, you know, if we are going to start
over we would not start this way. You know, it is kind of
interesting. You look at how did we get here. Well, we get here
because of Government.
I mean, how do you get more money? You do not get more
money by increasing a program. You get more money by having a
new program, and so it mushrooms out and mushrooms out.
I mean, I am sitting here, and I looked at Mr. Rector's
chart, and I assumed it was a roller coaster, and I am sitting
here just stunned that it is not, that it keeps going up, it
keeps going up, it keeps going up.
I mean, I think our goal has been in North Dakota where we
have three and a half percent unemployment; each State is
different. There is on questions about it, and I think the
ability to have a safety net that helps empower people, helps
them be on their own is huge.
I think what has not been said is one of the biggest
problems in this whole situation is if you have 69 different
programs, think of the beneficiary. How do they maneuver from
program to program to program? It seems to me that the benefit
of having this more consolidated and uniform would prevent
people from falling through the cracks and falling through the
gaps.
So a couple of questions. One question is you had
mentioned, Mr. Rector, about the $30,000 per family. When you
just take the top line, here is the number.
Mr. RECTOR. Right.
Mr. BERG. And here are the people. Could you just restate
that? Then, Doctor, I would like you to respond to that.
Mr. RECTOR. Well, the bottom line is I have written a
fairly long monograph about this. If you do not want to call
this spending ``welfare,'' which liberals do not, okay. You can
call it aid to the poor, but the fact to the matter is that we
are spending about $940 billion on means tested aid, which are
programs targeted toward poor and low income people. Basically
any document would show.
And all of this discussion is usually one program at a
time. We just heard Mr. McDermott say one out of four children
are covered. Covered by what? It would be very difficult to
find any poor child in the United States who is not covered by
multiple programs. But if you look at one program at a time,
you can always discover, oh, look. Somebody is not covered. It
is just ridiculous.
But the bottom line is that roughly half of this spending,
over $400 billion a year, clearly goes to families with
children, say $450 billion a year. Now, there are only 44
million families with children in the whole United States. So
if you gave every single family this money just in cash it
would come to $10,000 a family.
Now, this spending is concentrated on the poor. So if you
take this money and give it to the bottom third, the lowest
income third of families with children, that is about 14
million families. Okay? You divide 450 million by that amount;
you come up to something that is a very, very large number per
family.
The problem is not so much duplication in my mind as the
simple massive fragmentation of spending which makes it
impossible for you as decision makers to even understand where
this money is going. And I have been doing this for 30 years. I
do not know where this money is going, but it is an amazing
amount of money.
When it goes up, it is off the charts. If you try to bring
it down, it is----
Mr. BERG. Dr. Pavetti.
Ms. PAVETTI. I think that Mr. Rector does not provide
enough detail to know what is included, what he includes when
he talks about money going to children with families, but as I
said, you know, if you think about what the amount of cash that
is going to families, it is very low. The amount of food stamps
is very low. So the amount of money that low income families
actually have in their hands is actually quite small.
But I think that what gets counted is community development
block grants. What gets counted is Title I money that goes to
schools. So that is going to pay teacher. You are getting
health care in there. That is going to pay doctors and
hospitals. So a lot of that money is going to pay for services,
and it is not actually going directly to poor people.
So I think it is a misleading number of what it actually
means, and I think that if we had more detail we could have a
better conversation about----
Mr. BERG. It is kind of a stark contrast to look at that
big number and say what could you do if that were really
focused on a family. It seems huge.
But I have another question. Earlier this week we had Dr.
Lazera who was in, and he really talked about as the size of
Government grows, it put a damper on the private sector, and
really that is kind of what we are talking about here. How do
we reverse that?
And really to cut to the quick, Mr. Rector, looking at this
report, which programs would you recommend that we look into
first in terms of consolidating?
Mr. RECTOR. The first thing you need to do is just what a
family would do. The way that you have been running the welfare
system for 40 years is as if you are a supermarket and you go
down the aisle and say, ``Oh, that looks good and that looks
good,'' and you put it in the cart and you never add up the
total amount of the cost in the cart.
Would you be spending too much money then? Of course you
would. Suppose you ran the entire Federal budget that way. Just
we identify this problem; we identify that problem; and we
spend money. We never add it up.
You have got to get this total package under control or you
will bankrupt the country. Just roll back this spending to
where it was before the recession began.
Chairman DAVIS. Thank you, Mr. Rector. The gentleman's time
has expired.
Mr. Boustany, you are recognized for five minutes.
Mr. BOUSTANY. Thank you, Mr. Chairman.
Dr. Pavetti, Mr. Rector has testified that we currently
spend $940 billion on means tested programs. A simple question:
is that amount enough?
Ms. PAVETTI. I think it goes back to what we were talking
about. I think that is a question that needs to be answered by
what are we trying to accomplish, and are we accomplishing it.
So I think it is just the wrong way to start with that
question. I think we want to ask what do we want to accomplish
for our country for low income Americans to help them move up
the economic ladder, and then think about are we spending money
in the right ways, and where can we get better savings so that
we can achieve our goals.
Mr. BOUSTANY. So I was thinking about this, and just
listening to the discussion. You know we talk about defining
poverty, and I was thinking about the distinction between
poverty and being poor, and then the whole idea of dependency
on these programs, which is what leads to the cost.
If we say, okay, we are going to put people of limited
means on these programs to take them out of poverty, yet they
are still dependent, we are still spending money and we are not
helping them move up the ladder to get off of the rolls of the
dependency.
Mrs. BLACK. was talking about having the proper metrics in
place, and so let's have a little discussion about that. I am
asking all of the panel this question. Should we take each of
these programs and devise metrics with an eye toward designing
the program to get people off these programs? Is that what we
should be doing?
I would like all of you to comment on that.
Ms. PAVETTI. I think that we need to think about what has
happened in recent years. Our safety net is very different now
than it was before, and we have much of our safety net that is
really going to support low income working families because
they cannot make enough to be able to meet their basic needs.
So what happened with welfare reform is that we saw the
case loads decline and people move into the labor market, and
the belief was that if people got on the first rung of the
ladder they would move up, and that has not been borne out.
There has been lots of research.
Mr. BOUSTANY. Mr. Rector, could you comment on that?
Mr. RECTOR. Sure. I would like to quote from my favorite
welfare expert, President Lyndon Johnson. When Lyndon Johnson
launched the War on Poverty back in 1964, he said (and we spent
over $16 trillion on this, four times the amount we spent on
all other wars in U.S. history after adjusting for inflation),
he wanted a War on Poverty that would strike at ``the causes,
not just the consequences of poverty.'' He said, ``Our aim is
not only to relieve the symptoms of poverty but to, above all,
prevent it.''
I was just looking at the 1964 President's economic report
where they said, you know, we could just take $25 billion and
give it to the poor people and eliminate poverty, but that
would be wrong. We do not want to do that. What we want to do
is make the poor prosperous and self-sufficient.
Now, I would say we put $16 trillion into the War on
Poverty, and everything is dramatically worse today than it was
when we started out. The poor have less capacity for self-
support than they ever have primarily because the poor do not
work very much, even in good economic times. Able bodied heads
of households work very little. Moreover, when Lyndon Johnson
launched this War on Poverty, six percent of children were born
outside of marriage. Today that number is 42 percent. About 75
percent of the welfare assistance for families with children is
going to single mothers. The welfare system has enabled that
decline of the family. The family's capacity for self-support
has plummeted, and the taxpayer is stuck with the tab.
Mr. BOUSTANY. So you mentioned a couple of the factors that
cause an increase in dependence and poverty. Are there others?
Could you mention some others? Those are the big ones,
obviously.
Mr. RECTOR. Those are the two biggest ones. The two major
reasons that families are poor and on welfare are low levels of
parental work and the high levels of single parenthood
primarily among poorly educated mothers.
A third problem is immigration. We basically have imported
vast numbers of poor people from abroad. We have about ten
million immigrants in this country who do not have a high
school degree. About 15 to 20 percent of total welfare spending
goes to those individuals.
If you bring people in from abroad who are high school
dropouts, guess what. They cost a fortune. Those families cost
about $10,000 a year in means tested welfare through their
entire lives. Overall, they get about $30,000 a year in
Government benefits, pay maybe eight, $10,000 in taxes. Every
one of those families' is a net cost of $20,000 a year.
If you keep importing people who cannot support themselves,
both poverty and welfare have to go up.
Chairman DAVIS. Thank you. The gentleman's time has
expired.
Mr. Crowley.
Mr. CROWLEY. My grandfather came here without a high school
diploma. So did all of my grandmothers.
Mr. RECTOR. Would you like me to comment?
Mr. CROWLEY. I am not asking you a question, sir, and the
point I am making is that but for them coming to this country
and working hard, I would not be a member of Congress today.
So I do not like the way in which people are being broadly
disparaged based upon their immigration status in this country.
But thank you, Mr. Chairman, for holding this hearing
today, and while I appreciate your focus on reducing
unnecessary duplication and waste, I think we need to take a
careful look at what we consider unnecessary duplication. I am
concerned that some of the proposals we have heard would
consider any programs that help families to be unnecessary
duplicates, even if they are as widely different as heating
assistance and job training.
It is not unnecessary to help American families; in fact,
very necessary that we help American families, especially
during these very difficult times.
Dr. Pavetti, we have heard a lot about increases in what
some call welfare spending, and you have spoken about the
Republicans' Welfare Act of 2011. This legislation would take a
variety of Federal programs that provide benefit especially to
low and middle income Americans and combine them into one
program and cap funding for that program.
Is it correct that this bill includes Pell grants as so-
called welfare spending?
Ms. PAVETTI. Yes, it does.
Mr. CROWLEY. Pell grants, as you know, provide a critical
financial aid to students attending college. In many cases,
they are the primary piece of the financial aid package that
makes it possible for students in lower income and middle
income families to attend college, to help make college
affordable, especially private college, more affordable, not
affordable, more affordable.
Sacrifice goes into that; working on the side to support a
family and to also pursue your dreams. At a time when it became
more difficult for families to afford a college education for
their children, Democrats in Congress raised the amount of Pell
grants and insured that more students can benefit from this
assistance. So over 22,000 students in my district have been
benefitted from Pell grants, and I think most of them would be
shocked to see this counted as welfare, particularly since by
going to college, they are working towards a better future
where they hope to be self-sufficient.
We have even seen new data from the Department of Education
that says Pell grant recipients are more likely to stay in
school and complete their college education than their non-Pell
receiving counterparts. I would even wonder how many of my
colleagues on the other side of the aisle used Pell grants to
make college affordable for themselves or for their families.
Maybe that is something for the Fourth Estate to
investigate or to ask.
In your experience though, Doctor, have you found that Pell
grants and a college education help sustain and allow students
to improve their lives?
Ms. PAVETTI. Actually I have not done work on Pell grants,
but I think one thing that is important is that one thing that
we do know is that when people have the opportunity to get even
short-term training that prepares them for better jobs, they
have a better trajectory which allows them to go into higher
paying jobs, which means they become less dependent.
Mr. CROWLEY. So would you suggest possibly that a lot of
the talk about people in poverty being poor, wouldn't a college
education help lift these individuals out of poverty?
Ms. PAVETTI. Yes, it would.
Mr. CROWLEY. Would you consider this excessive welfare
spending that needs to be cut?
Ms. PAVETTI. No, not at all.
Mr. CROWLEY. The Republicans' proposal would combine the
Pell grant program with other valuable but unrelated programs,
such as Foster Care Assistance and Community Health Centers.
Would you consider these programs to be duplicates or do they
serve different goals?
Ms. PAVETTI. They serve very different goals.
Mr. CROWLEY. Let me delve further into this issue of
funding for each of these programs under the Republican
proposal. Would funding for Pell grants likely increase or
decrease under this proposal?
Ms. PAVETTI. They would be almost certain to decrease.
Mr. CROWLEY. What about Community Health Care Centers?
Ms. PAVETTI. Same, they would almost certainly decrease.
Mr. CROWLEY. Thank you, Doctor.
We are already seeing Republican plans to cut Pell grants
in their budget resolution released today which would cut the
annual Federal allocation for Pell grants by about half,
reducing the amount of the grant for those who do receive it
and deny the grant completely to many American families today.
It seems to me the Republican target is not duplicative
programming, but vital lifelines for millions of struggling
American families today.
And with that I yield back the balance of my time.
Chairman DAVIS. I thank the gentleman, and I just remind
him that Pell grants and Community Health Centers are not in
our jurisdiction, nor are they a primary focus of our hearing
today.
Mr. CROWLEY. I am sorry about that, Mr. Chairman.
Chairman DAVIS. But they are a worthy point for discussion
at another moment.
Having the last word and not the least today will be the
gentleman from Nebraska, Mr. Smith.
Mr. SMITH. Thank you, Mr. Chairman, and our witnesses.
Dr. Pavetti, could you speak to how efficient the
technology has been in terms of delivering some of the
services? Have we been able to achieve any savings?
Ms. PAVETTI. You know, there are some States that have
definitely achieved savings, and in my written testimony I have
an example of Arizona that was facing increases in their case
loads for public benefits because of the recession and they
have lower staff available to do that because of budget cuts.
And so what they did was to really re-engineer their process to
do much more efficient services.
The other thing, there are a number of States that are
really interested in trying to figure out how can they use
technology better. How can they really avoid the duplication?
So there is a lot going on in States around this effort.
The Ford Foundation has a major initiative. There are, I think,
27 States that applied to be part of that, to, again, try and
really bring those programs together and make them much more
efficient and particularly for working families, again, who
really do not often make enough to make ends meet and need
those supports to be able to continue to work.
Mr. SMITH. And I speak as a former State legislator, that
sometimes these Federal mandates that have occurred over the
last several years have been met with some consternation at the
State level or at, say, the retail level as well.
I mean, can you speak to how necessary it has been for the
Federal Government to mandate or how that has been leveraged?
Ms. PAVETTI. I think sort of ``mandate'' is the wrong word.
I think one of the things that we have learned over the years
is that States do not really understand how much flexibility
they have to coordinate programs. So I think there is a lot
that can be accomplished by really trying to create an
environment where that is promoted, and the Obama
administration has done that.
We saw that particularly with the TANF Emergency Fund where
they worked very hard to make sure the Department of Labor and
the Department of Agriculture and HHS were working together to
provide guidance. So they really did work together, and there
are agencies that said they had never worked together before
and that really did bring them together.
So I think there are things that they can do, and they need
sort of some guidance on how to actually do that.
Mr. SMITH. Now I hear you saying that there might be some
situations where or there are some situations where the request
for assistance did not follow the same trend lines as the
economy itself. Is that accurate?
Ms. PAVETTI. That is very true, and I can provide you with
a paper we did that shows State by State where we look at what
happened where States did have increases and people did have
access to assistance and where they did not. So you do see
this. It really is a 50-State story, where some States, really
their programs were very responsive, and there are other States
that were not responsive at all.
Mr. SMITH. So is it fair to say that even in unprecedented
times of economic growth there was still increasing requests
for public assistance?
Ms. PAVETTI. There was not. In fact, what you see is that
the case loads, and I can provide this to the committee as
well; you see what happened is that the increase in employment
was really quite striking shortly after welfare reform was
implemented, and that really tracked the economy and what was
going on.
When the economy started to falter, we see that increase
going down, and we saw very slight increases in the TANF case
load, but in general the trend of the TANF case load has been
going down.
Food stamps tend to track much more the economy. So it goes
up when the economy is very weak and it comes back down when
the economy recovers. So that there are people who really turn
to it when they have no other sources of income.
And one thing we have seen in both of those programs is
there are a very large fraction of people who use those
programs who either are employed or have been previously
employed and have lost their employment.
Mr. SMITH. Okay. So reflecting on Mr. McDermott's scenario
where I believe he knows of an actual family who was living out
of their car, I mean was that more a function of no programs or
services available or what needs to be done to address
something like that?
Ms. PAVETTI. Well, I think that one of the issues is that
for a family, the resources are so low that it's hard to find
even a--you know, when you get a median of $426, to find a
place to live on that so that even if they did get the
benefits, it does not mean that it could help them to get out
of that situation. They probably would have needed more
assistance at least at the initial to be able to figure out how
to make that initial transition.
They could have gotten food assistance to be able to at
least have food to be able to feed their family. But, again, it
depends on what State they were in, and there are half of the
States that they would have gotten less than $426.
Mr. SMITH. They were from Florida.
Ms. PAVETTI. They were from Florida. I do not know exactly
off the top of my head, but I think Florida's benefit is around
$300. So I do not know if you can find a place to live in
florida for $300 a month, but my guess is it would be quite
difficult.
Chairman DAVIS. I thank the gentleman. His time has
expired.
And I would like to thank all of you for taking the time to
come in and appear today. These are very complex issues. It
would be nice if we had an unlimited amount of time.
Unfortunately, we do not on this day, but we look forward to a
continuing dialogue and we look forward to your continued
comments.
If members have any additional questions, they will submit
them to you in writing directly, and we would appreciate your
responses back to the committee for the record.
With that, thank you, and the committee stands adjourned.
[Whereupon, at 3:29 p.m., the subcommittee was adjourned.]

[Submissions for the Record follow:]

Elizabeth Lower-Basch, statement

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