Wednesday, April 10, 2002

Mr. Chairman and members of the committee, thank you for the opportunity to testify today on the reauthorization of welfare reform. I am here today on behalf of the National Governors Association and the state of Michigan.

Six years ago, we came to you as a bipartisan group of Governors and asked for the opportunity to make broad changes to a flawed welfare system. That became reality with the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

We are here today to renew that bipartisan, federal-state partnership and to give you our recommendations for how we can work together toward the next stage of welfare reform. I believe that the federal legislation succeeded because Washington focused on the overarching goals and left the strategies and methods to the states.

States have proven that given flexibility, they can design a better program, deliver better services and get better outcomes for families and taxpayers.

Here are just a few examples of how states represented on this committee have tailored their programs to promote self-sufficiency among your constituents:

• In Utah, mental health counseling and substance abuse treatment that will lead to self-sufficiency are included in the definition of work participation;
• In Florida, recipients may enroll in remedial education or GED preparation classes as stand-alone activities;
• Tennessee provides cash incentives at various times to former recipients who retain employment;
• In Iowa, community organizations and local workforce offices can apply for community self-sufficiency grants to address systemic barriers, such as improving access to transportation; and
• In Michigan, our welfare reform and "Work First" efforts have moved more than 308,000 families from the welfare rolls to payrolls.

We recognize, however, that the job of helping families attain long-term self-sufficiency is far from over.

We urge the committee to build on the success that has been achieved and to reject any proposals that would alter the course that states have followed in implementing welfare reform.

This morning I would like to focus on three things:

• the proposed increase in work requirements;
• expansion of qualified expenditures under Maintenance of Effort rules, and
• the opportunity to achieve more success through program alignment.

As states move forward, it is important to maintain work in unsubsidized private sector employment as the key goal. And we need to recognize and reward work at all levels, whether it is a first-time, part-time entry level job or a full-time career.

President Bush’s proposal keeps work as a central focus, and I support his efforts to raise the bar. I look forward to a final product that recognizes a goal of work, while balancing the changing mix of our caseloads, current state programs, available resources, and maximum state flexibility.

Second, I recommend that the definition of qualified state expenditures under Maintenance of Effort requirements be expanded. The current law places more strings on state MOE funding than on federal money.

Governors support removing the restrictions on state funds so that states have at least as much flexibility in their spending of MOE funds as they do with TANF funds.

We have committed funds to low-income families, and it should be acknowledged.  A GAO assessment yielded data showing that in Michigan, from 1995 to 2000, federal TANF and non-TANF spending on low-income families increased by 10 percent.  During the same time period, comparable state spending increased by 26 percent.

Third, I’d like to focus on what I think is perhaps the most innovative idea emerging from this year’s welfare reform debate. President Bush calls it "super-waiver" authority. I call it common sense.

This would allow states to seek waivers across programs in various federal departments. Families who receive cash are often caught up in inconsistent and conflicting federal rules and policies – like food stamps, housing, education and training systems and workforce systems.

The food stamps program is one example of a federal program where we believe states should have greater flexibility. We recognize that the Food Stamp Program is not within the jurisdiction of this committee.

However, food stamp benefits are often a key support for families as they move toward self-sufficiency and is directly related to the continued success in welfare reform.

Despite significant progress, rules for administering the Food Stamp Program remain prescriptive and inflexible.

At the same time, we are often serving families in both the Food Stamp and WIC programs. Even though they both are targeted to low-income families, they do not coordinate, and states’ hands are tied.

Two examples are retailer availability and benefits insurance. USDA has certified about 1,800 Michigan retailers for WIC and over 5,000 Michigan retailers for food stamps. Therefore, a family who has a favorite grocery store for food stamps may not be able to use the same store for WIC.

Michigan has moved all food stamps to an electronic benefits transfer, or EBT, system. Despite our best efforts, we have faced multiple roadblocks and have not been able to move WIC benefits to our EBT Bridge Card. Therefore, we are continuing to operate two independent benefits issuance systems and processes, duplicating costs when a family receives benefits in both programs.

We encourage members of this committee to provide states the ability to coordinate programs to allow for seamless delivery of benefits to those who are eligible. A number of other programs are increasingly interconnected with welfare reform initiatives in states, such as child welfare, child support, housing, Medicaid and the Workforce Investment Act.

We appreciate that the Administration and many members of Congress recognize the need to break down these barriers to coordination by proposing expanded waiver authority for states.

We look forward to working with the committee to develop the most effective ways to eliminate barriers to, and to create incentives for, greater coordination of related programs.

Your focus for today’s hearing is work, and this kind of contribution and flexibility is extremely relevant. Flexibility leading to states’ ability for greater coordination will ultimately lead to an improved system of delivering assistance to our citizens. This improved system will support work and working families.

Thank you for the opportunity to testify today. We look forward to working with you to renew the historic, bipartisan partnership as we move to the next stage of welfare reform.