Mr. Chairman, our objective should be to encourage innovation without wasting taxpayer demonstration money on interventions, on programs that don’t work-that are not cost-effective. There is not enough TANF block grant money available now to adequately fund existing programs designed to help poor people secure stable employment, even though TANF continues to serve a smaller and smaller share of poor families. Since no additional resources are being proposed to help lift people out of poverty, we are really in a zero sum game situation. Every dollar shifted to subsidized employment means a dollar less for some other initiative.
Our decisions should be guided by what the evidence shows, not what the ideology dictates. Before we divert more TANF funds to any particular initiative, let’s ensure that we have the objective evidence to justify the move-both with regard to what we are moving into and what we are moving out of.
Probably the greatest potential for subsidized employment is for those individuals who face the greatest barriers to being hired, such as ex-offenders, those with serious physical or mental health issues, the long-term unemployed and older workers who often face discrimination. One of our witnesses today, Ms. Collins, will tell us about the transformative affect that a transitional job program has had on her life.
Overall, the evidence is modest and mixed as to whether subsidized employment programs are actually effective in helping the poor secure a stable job at a wage that will help them escape poverty. Certainly, the offer of free or almost free taxpayer-financed labor would have appeal to many businesses. The question is whether when the taxpayer subsidy runs out does the job run out also or does it truly open the way to long-term employment. Does subsidized employment offer opportunity or just another windfall? I think the verdict is largely still undecided? But probably to ensure much opportunity some strong safeguards must be in place to protect the taxpayer investment at stake. Today’s hearing is another way to scrutinize the potential of expanding subsidized employment to broader populations with the same care that this subcommittee has applied in previous hearings to other public expenditures.
I know that Mr. Bloom’s testimony indicates that most subsidized employment programs that have been tested have not produced the sustained increases in unsubsidized employment we would like to see. Mr. Doar writes that in his experience running a subsidized employment program, it proved to be an expensive intervention that was not more effective than other, less costly strategies at moving individuals from welfare to work.
Today is an opportunity to learn more about these programs and their effectiveness. It will also help determine whether we can make decisions to support programs based on evidence or whether we’ll simply rely on ideology as our guide.
I agree that the TANF program-set to expire at the end of September-is long over-due for a serious examination. I voted for the 1996 welfare reform law that established TANF because I support reducing poverty by promoting work. And indeed this law, in combination with a very strong economy and improvements to the Earned Income Tax Credit, did help propel more individuals into the workforce in the late 1990s.
Unfortunately, nearly all of that progress - from increasing employment levels for single mothers to reducing poverty for children - ended in the year 2000. Ever since, most of the major trends have been negative.
Four years of success followed by 14 years of failure is not a great record. Why have we seen such a failure? Well, to start, the amount of resources available in TANF - the size of the block grant - has declined in real terms by 31% since 1996. Some states, including Texas, have seen a sharper decline as this Congress refused to renew TANF Supplemental Grants that expired in 2011.
As I said earlier - a smaller and smaller portion of poor families, poor children receive TANF assistance. And when folks aren’t receiving TANF assistance, they’re not participating in TANF work activities - training, vocational education, secondary education, and a host of other programs that help them become self-sufficient.
I look forward to this Committee considering ideas to improve outcomes for families that are served, or should be served, by TANF. I hope in the future we will consider additional strategies to promote work and reduce poverty, including programs that work with local employers and educators to ensure individuals have the skills needed to both secure and advance in employment.
Thank you.
