SPEAKERS CONTENTS INSERTS
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59–331 CC
1999
1999
REVIEW OF THE OPERATIONS OF THE FOOD STAMP PROGRAM
HEARING
BEFORE THE
SUBCOMMITTEE ON DEPARTMENT OPERATIONS,
OVERSIGHT, NUTRITION, AND FORESTRY
OF THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
AUGUST 5, 1999
Serial No. 106–31
Printed for the use of the Committee on Agriculture
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COMMITTEE ON AGRICULTURE
LARRY COMBEST, Texas, Chairman
BILL BARRETT, Nebraska,
Vice Chairman
JOHN A. BOEHNER, Ohio
THOMAS W. EWING, Illinois
BOB GOODLATTE, Virginia
RICHARD W. POMBO, California
CHARLES T. CANADY, Florida
NICK SMITH, Michigan
TERRY EVERETT, Alabama
FRANK D. LUCAS, Oklahoma
HELEN CHENOWETH, Idaho
JOHN N. HOSTETTLER, Indiana
SAXBY CHAMBLISS, Georgia
RAY LaHOOD, Illinois
JERRY MORAN, Kansas
BOB SCHAFFER, Colorado
JOHN R. THUNE, South Dakota
WILLIAM L. JENKINS, Tennessee
JOHN COOKSEY, Louisiana
KEN CALVERT, California
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GIL GUTKNECHT, Minnesota
BOB RILEY, Alabama
GREG WALDEN, Oregon
MICHAEL K. SIMPSON, Idaho
DOUG OSE, California
ROBIN HAYES, North Carolina
ERNIE FLETCHER, Kentucky
CHARLES W. STENHOLM, Texas,
Ranking Minority Member
GEORGE E. BROWN, Jr., California 1
GARY A. CONDIT, California
COLLIN C. PETERSON, Minnesota
CALVIN M. DOOLEY, California
EVA M. CLAYTON, North Carolina
DAVID MINGE, Minnesota
EARL F. HILLIARD, Alabama
EARL POMEROY, North Dakota
TIM HOLDEN, Pennsylvania
SANFORD D. BISHOP, Jr., Georgia
BENNIE G. THOMPSON, Mississippi
JOHN ELIAS BALDACCI, Maine
MARION BERRY, Arkansas
VIRGIL H. GOODE, Jr., Virginia
MIKE McINTYRE, North Carolina
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DEBBIE STABENOW, Michigan
BOB ETHERIDGE, North Carolina
CHRISTOPHER JOHN, Louisiana
LEONARD L. BOSWELL, Iowa
DAVID D. PHELPS, Illinois
KEN LUCAS, Kentucky
MIKE THOMPSON, California
BARON P. HILL, Indiana
Professional Staff
WILLIAM E. O'CONNER, JR., Staff Director
LANCE KOTSCHWAR, Chief Counsel
STEPHEN HATERIUS, Minority Staff Director
KEITH WILLIAMS, Communications Director
Subcommittee on Department Operations, Oversight, Nutrition, and Forestry
BOB GOODLATTE, Virginia, Chairman
THOMAS W. EWING, Illinois,
Vice Chairman
RICHARD W. POMBO, California
CHARLES T. CANADY, Florida
JOHN N. HOSTETTLER, Indiana
SAXBY CHAMBLISS, Georgia
RAY LaHOOD, Illinois
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JERRY MORAN, Kansas
JOHN COOKSEY, Louisiana
GREG WALDEN, Oregon
EVA M. CLAYTON, North Carolina,
Ranking Minority Member
MARION BERRY, Arkansas
BENNIE G. THOMPSON, Mississippi
VIRGIL H. GOODE, Jr., Virginia
DAVID D. PHELPS, Illinois
BARON P. HILL, Indiana
MIKE THOMPSON, California
GEORGE E. BROWN, Jr. California 1
DAVID MINGE, Minnesota
(ii)
1\ Deceased July 16, 1999.
C O N T E N T S
Clayton, Hon. Eva M., a Representative in Congress from the State of North Carolina, opening statement
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Goodlatte, Hon. Bob, a Representative in Congress from the State of Virginia, opening statement
Witnesses
Carter, Clarence H., commissioner, Virginia Department of Social Services
Prepared statement
Fox, Lynda G., secretary, Maryland Department of Human Resources
Prepared statement
Goolsby, Larry, senior policy associate, American Public Human Services Association
Prepared statement
Greenstein, Robert, executive director, Center on Budget and Policy Priorities
Prepared statement
Howard, Douglas E., director, Michigan Family Independence Agency
Prepared statement
Kibble-Smith, Brian, vice-president, Citicorp Services Inc.
Prepared statement
Price, Melba L., associate director, Missouri Department of Social Services
Prepared statement
Silliker, M. Josita, Evangelical Lutheran Church in America
Prepared statement
Snyder, Jacki, manager, electronic payments, SUPERVALU Inc.
Prepared statement
Watkins, Shirley, Under Secretary, Food, Nutrition, and Consumer Services, U.S. Department of Agriculture
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Prepared statement
Zedlewski, Sheila, director, the Income and Benefits Policy Center, the Urban Institute
Prepared statement
Submited Material
Hoback, Sandie, administrator, Adult and Family Services, Oregon Department of Human Services
REVIEW OF THE OPERATIONS OF THE FOOD STAMP PROGRAM
THURSDAY, AUGUST 5, 1999
Subcommittee on Department Operations,
Oversight, Nutrition and Forestry,
House of Representatives,
Committee on Agriculture,
Washington, DC.
The subcommittee met, pursuant to call, at 10:32 p.m., in room 1300, Longworth House Office Building, Hon. Bob Goodlatte (chairman of the subcommittee) presiding.
Present: Representatives Walden, Clayton, Phelps, and Hill.
Staff present: Lynn Gallagher, senior professional staff; Kevin Kramp, staff director, Subcommittee on Department Operations, Oversight, Nutrition, and Forestry; Wanda Worsham, clerk; Jason Vaillancourt, Callista Bisek, and Quinton Robinson.
OPENING STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA
Mr. GOODLATTE. Good morning. The Subcommittee on Department Operations, Oversight, Nutrition, and Forestry will come to order. I have an opening statement I would like to make.
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This hearing is to review the operations of the Food Stamp Program. It is a necessarily vague title because we hope to review many aspects of the program. State flexibility within the Food Stamp Program, EBT interoperability, and caseload reduction lead the list of items of subcommittee interest and will be the primary focus of this hearing. Our intense and continual interest in eliminating fraud, waste, and abuse in the Food Stamp Program will be the focus of future hearings.
As this subcommittee's jurisdiction increased, so did our priority issue list. This hearing is a long time in coming. I would like to recognize Mrs. Clayton's intense interest in nutrition issues and thank her and her staff for their patience and willingness to work with us to get this hearing scheduled.
Participation in the Food Stamp Program, the Nation's largest assistance program, has dropped, according to a recent GAO study, by 27 percent during the last 3 1/2 years. The Welfare Reform Act that Congress passed in 1996 retained the Food Stamp Program as an entitlement program for qualifying participants, but it tightened the program's eligibility standards by establishing work requirements for able-bodied adults without dependents and by disqualifying most noncitizens from participating in the program.
There are many theories to explain this dramatic drop, and I suspect we will hear about most of them today. Most theories look to place blame or point fingers. I hesitate to be so negative. Some studies suggest that there is a growing gap between need and assistance. Let me make it clear, there is no argument that we should not have hunger in the world's richest country that has the world's safest, most wholesome, economical, and abundant food supply.
The strong U.S. economy, however, has provided many with first time opportunities at self-sufficiency. Why are we surprised that people are opening the door on which opportunity knocks?
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If there are barriers to access for would be participants in the Food Stamp Program, they need to be identified and eliminated. There have been some barriers identified, but I don't think that suggests a systemic problem, and I caution against a knee-jerk reaction to create national policies to correct the problems of a few may be misguided.
The U.S. Department of Agriculture is not without fault. Although the Welfare Reform Act was enacted almost 3 years ago, FNS has not promulgated regulations implementing the act's food stamp revisions. It was not until May of this year that FNS published notices of proposed rule making with the rules to be finalized in December of this year. FNS regional offices have told States that they are allowed to interpret the Welfare Reform Act for themselves until these rules become binding. What is a State to do when the folks at USDA headquarters don't agree with them?
I fear that instead of giving the States greater flexibility in the Food Stamp Program, there will be pressure to create a more command and control management style. States have proven they can be the innovators of welfare reform. Their success in handling the administrative freedoms of the TANF program confirms my support for greater flexibility in the Food Stamp Program. I look forward to working with the States and USDA to see what advances can be made.
I look forward to hearing other perspectives on both the issues of caseload reduction and greater flexibility for the States in the Food Stamp Program today.
Another issue for the subcommittee's review is a bill I introduced yesterday, the Electronic Benefit Transfer Interoperability and Portability Act of 1999. The sole focus of my bill is to allow food stamp beneficiaries the ability to redeem their benefits in any eligible store regardless of location. Beneficiaries had this ability under the old paper food stamp system but lost it as States migrated to an electronic benefits transfer system.
Under the old paper food stamp system, recipients could redeem their food coupons in any authorized food store anywhere in the country. For example, a food stamp recipient living in Bath County, VA—in my district—could use their food stamps in their favorite grocery store even if it happened to be in West Virginia. Unfortunately, as we move to electronic delivery of benefits, this is currently not the case. My bill provides for the portability of food assistance benefits and allows food stamp recipients the flexibility of shopping at locations that they choose.
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My bill enjoys support from many on this subcommittee, and I am optimistic about its prospects.
I look forward to hearing the witnesses' testimony today. We have assembled uniquely qualified witnesses that will provide insight into the operations of the Food Stamp Program.
It is now my pleasure to recognize the ranking member of the committee, Congresswoman Clayton of North Carolina.
OPENING STATEMENT OF HON. EVA M. CLAYTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH CAROLINA
Mrs. CLAYTON. Thank you, Mr. Chairman.
I am delighted that you have scheduled this hearing for the bipartisan spirit that brings us together this morning. Hunger is a matter that transcends party and politics. I know that you agree that it is important that on the issue of nutrition, we do what is best for our Nation. In 1996, although you might have disagreed as how to get there, I think you would agree that indeed the welfare reform system needed to be reformed and we were right and it was reformed.
But reform should be directed at moving people out of poverty, not into poverty. Nutrition programs are essential to the well-being of millions of our citizens, our disadvantaged, our children, the elderly, and the disabled. These are groups of people who in many cases cannot provide for themselves and need assistance for their basic existence. Nutrition programs in many cases provide the only nutritious food that millions of our Nation's poor receive on a daily basis.
Many of those of whom I am speaking, far too many, are the working people. These working Americans are struggling to make ends meet and still cannot afford to feed their families. Unfortunately, Mr. Chairman, many of those I am speaking about, all too many of them, are also children. Mr. Chairman, the reality was true then in 1996 and according to several recent reports in various publications and a GAO study, the reality is also true now.
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In sum, those reports reveal that in the midst of an economic boom, we are experiencing in many parts of the country disaster. When it comes to hunger and food insecurity, there are dangerous warning signs that we must heed if we are going to be true to all Americans.
According to the GAO report dated July 2, 1999, participation in the Food Stamp Program as you have noted has dropped by 27 percent during the last 3 1/2 years. Yet this drop is only in part due to our prosperous era. Those indeed who receive a food stamp no longer need them is not the reality. In fact, the late USDA study indicated that there has been an increase, an increase of 10 million people from 1997 to 1998 with over 3 million children suffering from food insecurity on the edge of hunger.
There is a growing need for food. At the same time, these reports inform us that client and food stamp participation has been precipitous without adequate explanation in full. We do know that the low-income families are struggling and not prospering, indeed as we have indicated. Indeed, they are struggling in spite of the fact they are working because they are working at low wages and the food stamp program allows them to supplement to provide a quality of life.
That is why, Mr. Chairman, this hearing is vital. I look forward to the testimony of the witnesses and to hear the various help and forms of information that they can provide from their perspective. I want to commend the administration, the USDA, and the Under Secretary Shirley Watkins for her leadership in many areas. Madam Under Secretary, indeed, should be commended for launching the 1–800 number initiative and for the President's recent large food stamp initiative outreach.
We are here today because it is time to really find a way to feed the hungry; not to pick on the poor, but to find another way to feed the hungry. Less than 3 percent of the budget is targeted for feeding the hungry. Hunger indeed has a cure, Mr. Chairman; and I think that we can be part of that remedy. Thank you for holding this hearing.
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Mr. GOODLATTE. Thank you, Mrs. Clayton. We would now like to invite our first panel of witnesses to the table. The Honorable Shirley R. Watkins is the Under Secretary for Food, Nutrition, and Consumer Services for the U.S. Department of Agriculture. Ms. Watkins is accompanied by Ms. Julie Paradis, who is the Deputy Under Secretary for Food, Nutrition, and Consumer Services at the U.S. Department of Agriculture, and Mr. Samuel Chambers, Jr., who is the Administrator of the Food and Nutrition Service of the U.S. Department of Agriculture.
Ms. Watkins, we have had you with us many times before. You and your compatriots are welcomed back. Thank you, and as you know, your full statement will be made a part of the record, and we welcome your testimony.
Ms. WATKINS. Thank you, Mr. Chairman, to the members of this committee, I am indeed honored to be here with you today. If it looks like I am having some difficulty, I am sitting on my hands because I am about to freeze to death. So I hope this isn't going to be just a chilly—that is not the chill, it is really a warm opportunity to be here, but I am freezing. So if I squirm and move around, you know that I am trying to get warm, Mr. Chairman.
Mr. GOODLATTE. We anticipated that things might get hot before the hearing is over, so we wanted to start off and average it out.
STATEMENT OF SHIRLEY R. WATKINS, UNDER SECRETARY, FOOD, NUTRITION AND CONSUMER SERVICES, U.S. DEPARTMENT OF AGRICULTURE
Ms. WATKINS. Thank you, Mr. Chairman. Thank you very much. I am Shirley Watkins, the Under Secretary for Food, Nutrition, and Consumer Services, and I am delighted to have the Deputy Under Secretary, Julie Paradis, with me along with Sam Chambers, the Administrator for Food Nutrition Services at the agency.
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Mr. Chairman, I would ask for the committee's indulgence as my statement this morning will be a little longer than the 5 minutes that you allowed me. I would like to include my written statement for the record. But my oral statement will be just a little bit longer, if that is OK.
Mr. GOODLATTE. Depending on the meaning of the word ''little'' we will indulge you.
Ms. WATKINS. Thank you, Mr. Chairman, thank you very much. My southern accent doesn't speed up very fast.
We are discussing issues that are of great importance to us and you, and they have a wide impact. I feel I need to be very thorough in my presentation, as thorough as possible.
I would like to spend some time talking about the Food Stamp Program and its critical role in nutrition and helping working families successfully make the transition from dependency to self-sufficiency, and in helping families in need secure a healthful diet during times of financial hardship. At the Department of Agriculture, we are extremely proud of the vital role that the Food Stamp Program plays in helping low-income families, including working families, the elderly, the disabled, and children to purchase food for an adequate diet.
For many people in this country who are participating in food stamps, this can make the difference between living in poverty and moving beyond poverty. It is imperative to the success of welfare reform and fundamentally, for the well-being of our citizens that we work actively to identify and remove any barriers that prevent eligible low-income families from participating in the Food Stamp Program and to better serve the working poor. To help us all look at what this program is really all about, the staff and I wanted to look seriously at the principles that could guide us and focus our thinking as we looked at the Food Stamp Program and all of our nutrition assistance programs. So we developed some guidelines. I want to share those with you. There are a few of them, and I would like to put those seven guiding principles in the record, Mr. Chairman.
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One, the Food Stamp Program fights hunger and improves nutrition among low-income households. Second, proper nutrition and sufficient food are as essential to the successful transition from welfare to work as child care and health insurance. Third, the national eligibility and benefit rules of the Food Stamp Program form a safety net across all States. Fourth, improved nutritional well-being is the ultimate measure of success in the fight to reduce hunger and improve nutrition.
Fifth, food stamp policies must address the needs of a diverse range of children, families, and single individuals including the working poor, elderly, and disabled. Sixth, administrative simplicity is important as the program meets the nutritional needs of low-income people. Seventh, the final one of prudent stewardship of program resources is critical.
The Food Stamp Program is a nutrition program, not a welfare program. Congress deserves praise, Mr. Chairman and Members, for recognizing this and maintaining the Food Stamp Program as the national Federal nutrition assistance program that has uniform national standards.
In recent years, States have taken remarkable action to revolutionize the welfare system. A strong economy combined with innovative State policies and an unyielding commitment to helping families become self-sufficient as they move from welfare to work has resulted in a dramatic decline in the number of families receiving cash assistance. Many more individuals are now working to support themselves and their families than ever before. However, critical to their success and becoming self-sufficient is the ability to feed their families adequately. I would submit to you that there are many, many challenges that remain for all of us.
Last month, as Mrs. Clayton mentioned, we released the report entitled ''Household Food Security in the United States from 1995 to 1998.'' I would also like to submit a copy of this report for the record because it shows that in spite of a booming economy of recent years, over 10 million Americans still live in households that experience hunger.
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So we know that even in the midst of a booming economy, many Americans are still at nutritional risk. Nutrition assistance is not reaching everyone who needs it. Although the number of people in poverty has fallen, the number of those who still will receive food stamps has dropped even faster. In May of this year, 1999, the Food Stamp Program served 17.9 million people, the fewest in nearly 20 years. The number of people receiving food stamps over the past 5 years has fallen by 9.6 million. That is a drop of one-third. From August 1996 through May, participation dropped by almost 7 million, a 30 percent decrease.
Historically, the pattern of participation in the Food Stamp Program has closely tracked the pattern of poverty in America. However, in recent years, the two patterns have diverged and the number of people receiving food stamps has fallen far greater than the number of people living in poverty. We know, for instance, that between 1995 and 1997, food stamp participation fell five times as fast as the number of people living in poverty.
Predictably, many of the reasons why nearly 10 million people have left the food stamp rolls are indeed tied to the economy and the changes that were brought about by welfare reform. Changes in the program rules have restricted the participation by immigrants and unemployed adults with dependents. The strong national economy has provided work to former participants reducing their needs for food stamps, and the increases in the minimum wage have helped ease the transition to self-sufficiency. TANF, the Temporary Assistance for Needy Families program, has helped many low income mothers find work and increase their income which is sufficient to eliminate them from the need for the Food Stamp Program, and we are all very pleased with that. But clearly, welfare reform and a strong labor market have made a significant and positive difference in this country.
In spite of all of these successes, there are still many who need help in feeding their families. We know there are parents working harder to provide for their children who do not yet have sufficient earnings to buy the bare necessities. After paying the rent and the utility bills and the doctors bills, they are still struggling to put food on the table.
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There are two unintended consequences of State and local welfare reform initiatives which cause us some concern. In some communities we found that TANF requirements discouraged people from applying for cash assistance and consequently diminished the access to the Food Stamp Program. We also found that many people are unaware of their eligibility for the program. So some leave unnecessarily and others are discouraged from applying for benefits.
On July 14, President Clinton announced several new food stamp policy changes to ease State transitions into a new way of working with families in need. Before these new policy changes, families had to report their differences in their circumstances, a new job, increase in wages, change in working hours, changes in the composition of the household or any number of other conditions. This was very burdensome, not only on those families but on new employers and those recipients. It was burdensome for State staff who were required to process the mountains of paperwork. Now, the reporting of these changes will be required only on a quarterly rather than a monthly basis.
A new food stamp vehicle policy will allow those working parents who are receiving noncash TANF assistance to have a reliable car and receive food stamp assistance for themselves and their children and States will no longer be penalized for small errors that are made by food stamp applicants or the State agency staff that do not result in the loss of significant benefit dollars.
These are new policies and they have been most welcomed by the States. We work with the States, and these are some of the things that they requested. It shows a deep commitment that this administration has in protecting the access of the American families to a nutritious diet while also focusing on ways to help States to simplify and run their programs in an efficient way. They have a business to run and we want to help them run it effectively and efficiently.
President Clinton also announced at the same time a new food stamp public education campaign. We provided a 1-800 hot line and a new food stamp tool kit which I would also like to provide for the record.
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This information, we think, will provide best practices to assist working families and explain the access and eligibility requirements. I would also like to just give you that toll free number which is (1-800) 221-5689. We are receiving lots and lots of calls since we instituted that new toll free number.
We have asked our State partners to work with us to develop plans to inform low-income households about the eligibility requirements, application procedures, and the benefits of the Food Stamp Program. We also want them to help us develop simplified application procedures and work to prevent inappropriate denials and terminations.
This administration is committed to preserving and protecting access to people in this country to a nutritious diet and delivery of food stamp benefits to low-income families in a customer friendly, efficient, effective, and dignified way. One of the ways that we have been able to do that is to achieve this through EBT, the electronic benefit transfer system. Nationwide, 65 percent of all food stamp benefits are now being delivered electronically. Forty States use EBT to deliver food stamp benefits. And as of this month, 33 have implemented EBT systems statewide. Sixty-four percent of all households receiving food stamp benefits access these benefits using a card rather than a coupon.
Mr. Chairman, by October 1, 2002, we expect to have all States and all local programs on EBT. We think that will be a tremendous benefit for people in this country.
We have been actively engaged in helping our State partners meet this deadline and conform to the requirement of welfare reform law. On May 27, you are right, we published proposed rules dealing with the issues of cost neutrality, fees for replacement cards, photo IDs, among other topics. It is of vital importance that we continue to develop delivery systems that are easy to use but are still secure from fraud and abuse.
One issue of particular interest is finding a way to help food stamp recipients access their benefits wherever they are. You are exactly right, interoperability is extremely important to all of us, especially important for those bordering States that attract food shoppers in stores across State lines. While we are not requiring a State to have interoperability EBT systems, we are encouraging interoperability of their EBT systems. The department shares in all of the associated cost currently at a 50–50 rate that is permitted by law. But we have found that the cost of implementing interoperability EBT systems remains a concern for many of the States. To help resolve this cost issue, we have been working with the EBT Council of the National Automated Clearinghouse Association and the States to gather additional data through an interoperability project. This project is currently under way and early results will suggest that the cost associated with interoperability may not be significant.
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Many States and food retailers would like to see interoperability become a requirement and have the Federal Government pick up 100 percent of the associated cost. We are considering the benefits of this recommendation, but it is unclear how successful we could be in controlling any 100 percent funding to ensure reasonable expenditures. Mr. Chairman, we would be pleased to work with you and your staff and the committee on this issue. The Department encourages and supports interoperability, and we believe that a nationwide interoperability system is inevitable. And we want to work to make it happen and work with you to have the best system possible.
I know many of you have expressed interest in knowing where States are and where food stamp retailers stand with respect to Y2K compliance. USDA has been working with the States, the retailer, and the third-party processors to ensure that their systems are compliant well before December and to see that accurate benefits are issued to all certified households on a timely basis. We are expecting that all States will have their systems Y2K compliant.
With regard to another food stamp topic, I would like to give you just a status report on the Food Stamp Program payment accuracy for quality control system. Secretary Glickman and I have made the accurate delivery of food stamp benefits one of our top priorities. It is critical to the integrity to the program that the States deliver nutrition benefits to eligible households accurately and efficiently. The quality control system exists to monitor how well States are doing this. It also tells us when they need help.
When we see an increase in overissuance errors, as we did in fiscal year 1998, the Department is very concerned about that. We have intensified our efforts to work with States to help them improve their payment accuracy, but we are also equally concerned when we see, as we did this year, an increase in underissuances. Approximately two-thirds of the increase in payment error rate is attributable to underissuance. For fiscal year 1998, underissuances increased from 2.47 percent in the previous year to 3.7 percent or half a billion dollars in benefits. When a family is denied benefits to which it is entitled or issued fewer benefits than it should have, this does not constitute a savings but a serious problem in program access. Denying needy families access to nutrition assistance is not a reform by anyone's definition, and it certainly violates the spirit and the intent of the Food Stamp Act.
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Mr. Chairman, you mentioned the July 2 GAO report. And it highlights our concerns about the drop in the food stamp participation as well as the difficulty we face in monitoring this program with increasingly limited resources. I will not sit here and deny the fact that we didn't have a problem. We did. But under the leadership of Secretary Glickman, we have reinvented the regulation process which is a cumbersome process at best. We now expect that all of the welfare reform regulations will be published by the end of this year. We have a time slot, and we are expecting to get this accomplished no later than the first of December. The staff recognizes what they have to do. They are up to the task.
I would just like to say to you, oftentimes we don't compliment the staff for doing some really hard work. But this has been a very cumbersome process. When the Food Stamp Program started in the 1970's, the agency had over 2,000 employees. We are now somewhere around 1,600 employees. It is very, very difficult for us to get all of these regulations out, but we are going to get it done. We are proud to have families and children achieve better health and more secure lives through nutritious foods and a better diet.
As a nutrition assistance program and our major safety net, food stamps help to protect at-risk families from malnutrition and disease while at the same time supporting the U.S. farm economy.
Food stamps as I said earlier, are not a welfare. They are a means to escape it. They are not a lifestyle. Most recipients are off the rolls in less than a year. Food stamps are a transition, a short-term solution that helps people complete the welfare-to-work journey. The Department is committed to working closely with this committee and Congress and our State partners to ensure that everyone who is entitled to food stamps has ready access to them. While we can all take pride in the economic growth we have enjoyed in recent years as long as we can continue to have hunger in this country, our job is not over.
I know that we can count on your support as we always have to complete this vital unfinished business.
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Mr. Chairman, that concludes my remarks, and I would be happy to answer any questions of you and other members of this committee might have at this time.
Thank you very much.
[The prepared statement of Ms. Watkins appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Mrs. Watkins. I am delighted to hear of your and the Department's support for EBT interoperability. I wonder if you have had the opportunity—I know earlier drafts of the legislation that I introduced yesterday have been submitted to the Department. I wonder if you have any comments on the legislation that I have introduced.
Ms. WATKINS. Mr. Chairman, we reviewed it. We reviewed your legislation. We look forward to working with you, and I think that the comments that we made earlier to you still stand. But we look forward to working on this. You are right. When you look at the fact that we have paper and then we transferred to new technology and we have to move the technology with what the old system did, a manual system did. You are exactly right. We want to work with you. I think that we can get it done.
Mr. GOODLATTE. Thank you. The 1996 Welfare Reform law allows States to operate simplified food stamp programs in which food stamp eligibility is determined based on a State's rules for temporary assistance for needy families, the TANF program. How many States have expressed an interest in operating a simplified Food Stamp Program?
Ms. WATKINS. Mr. Chairman, we have had a lot of States to look at different ways of operating the programs. We are working with those States. I am not sure of the exact number. When we have an exact number, we would be glad to provide that for you. Currently we have two States, Arkansas and Illinois. They received our approval to operate a simplified Food Stamp Program. There were nine other States that are using the simplified Food Stamp Program authority to operate a mini-structure.
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Mr. GOODLATTE. Do you have those States in front of you?
Ms. WATKINS. The nine other States I don't have. But I would be glad to provide that information to you.
Mr. GOODLATTE. So other than the mini-program, Arkansas and Illinois, are they the only two States that have submitted requests?
Ms. WATKINS. Currently the only two States that have received our approval.
Mr. GOODLATTE. But you don't know if they are the only two that have submitted requests?
Ms. WATKINS. South Carolina and California are in the process.
Mr. GOODLATTE. Thank you. Recently the President announced initiatives for the Food Stamp Program to ensure that work pays better than welfare, to quote the President.
They include: one, making it easier for families to own a car and receive food stamps, two, new rules to make it easier for States to help working families by easing rules on reporting earned income, and three, new outreach guidelines to inform people about the Food Stamp Program.
Is there a Federal cost for these initiatives?
Ms. WATKINS. Yes, Mr. Chairman. We have looked at those costs and that is $250 million over a 5-year period.
Mr. GOODLATTE. So $50 million a year.
Ms. WATKINS. Not much.
Mr. GOODLATTE. Well, everything is relative. Do you expect the food stamp caseload to increase as a result of these initiatives?
Ms. WATKINS. Mr. Chairman, I hope that we are able to get the information out to those families who don't understand that they may be eligible for the program. That is our intent, to ensure that those legal immigrants who were added back to the program or those working families who don't understand that they may be eligible for the program, that that information gets out to them so that they know that they have access to these programs.
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If you remember when we testified before, and we recognized that based on all of the conversation we were getting, many of these families were going to food banks and soup kitchens. We hope that the message gets out to those families, that they are still eligible for these programs despite the fact that they may be working. Many of the people who have gone to work and the information that we are getting are making minimum wage. They may still be eligible for benefits but don't understand. I would imagine that we will get some of those people back on the rolls who are eligible.
Mr. GOODLATTE. As this program was designed, do you have some estimates of how many people would be added to the program as a result of these efforts?
Ms. WATKINS. As a result of that, we had looked at new participants, particularly with the vehicle change, would have been something like 22,000.
Mr. GOODLATTE. But the other—the outreach program, do you have anybody making projections as to what kind of increase we are going to be facing and the increased costs we are going to be facing as a result?
Ms. WATKINS. Mr. Chairman, we have not looked at increased cost on those. We have not looked at the numbers that you may get back. We have looked as those numbers of people who were eligible and no longer participating in the program, with the legal immigrants and those people that the vehicle may—where that information may get to people who may be eligible. But we have not looked at that.
Mr. GOODLATTE. What kind of measures for success do you intend to employ with this program?
Ms. WATKINS. Mr. Chairman, we will look at the benefits of the educational initiative to see if that has any impact. We will look at the statistics, increase in participation, to see if that may have an impact.
Mr. GOODLATTE. Are you going to give the States any kind of target increases or required to expand caseload?
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Ms. WATKINS. No, sir. What we will look at is targeted increases. What we will look at is the number of people who are not participating where they have those numbers now where we know that there has been a dramatic drop. We will look at those percentages, but we will not give States targeted numbers.
Mr. GOODLATTE. The Food and Nutrition Service is requiring cost neutrality for States' requests for waivers for income reporting rules based on the President's July 14 announcement—or it is not requiring them as I understand it. Why is cost neutrality a factor for waiver request based on the 1996 Welfare Reform law but not on waiver requests based on the President's July 14 announcement?
Ms. WATKINS. Mr. Chairman, we are always asked to look at cost neutrality on all of our programs, not just food stamps but all programs. If you are going to look at waivers, you have to look at what the cost implications are.
Mr. GOODLATTE. Thank you. My time has expired. The gentle lady from North Carolina.
Mrs. CLAYTON. Thank you. Again, following up on the welfare reform, one of the things that we need to start with the premise is that Food Stamp and Medicaid were left as national programs and were not part of or exempt from being incorporated into the welfare reform. So as such there were some modifications.
I think the chairman spoke to one, flexibility, that you could do the simplified structure of individual States. But I think it is important to put on the record that the Food Stamp and Medicaid are the two remaining national programs that we have, indeed, that this Congress felt was essential to have that commitment. And it has flexibility to the extent either the waivers or to the extent that some States elect and get approval for the simplified areas.
A couple of things. First, I want to commend you about the new initiative. I also want to follow up on the areas of cost. I gather, I am assuming and I think it is relative, $250 million—5 years, $50 million a year, I think those certainly are not excessive numbers to help feed more people. But is that an all-inclusive number, a cap for the vehicle as well as the shelter or does that respond only to one?
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Ms. WATKINS. That is for both the transportation and for shelter—not shelter. We don't have shelter; shelter's quarterly reporting, not shelter.
Mrs. CLAYTON. So there was not any adjustment on the shelter cap?
Ms. WATKINS. No.
Mrs. CLAYTON. Just the reporting——
Ms. WATKINS. Quarterly reporting and the categorical eligibility are the only two.
Mrs. CLAYTON. Last term, I guess there were about 137 Members had introduced—and I was one of them and Walsh on the Republican side and others were introduced to ''Hunger Has a Cure.'' as you remember, we were asking Congress really to look both at the shelter cap as well as a cost of vehicles because we found those both to be prohibitive for poor families to be able to access food stamps.
If a car was valued at a certain value, you know, you couldn't qualify for food stamps and yet if you didn't have a car, you couldn't go find a job. One of the changes in food stamps was predicated that you would be eligible for food stamps if you were indeed searching for a job. So again the inconsistencies of those barriers made sense to us.
The other one was raising the shelter cap. Can that be done administratively or something that must be done——
Ms. WATKINS. The shelter cap is set by law. We cannot do that administratively.
Mrs. CLAYTON. That is probably why we had it in the bill. We did not reintroduce that this time. We were working around in some other areas. But again ''Hunger Has a Cure'' had a lot of support nationwide. It was obviously insufficient, and we never got to a hearing, but 136 or 137, maybe more than that really, Members on both sides of the aisle.
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I know that I received hundreds of letters from various faith-based communities and nonprofit groups who felt that all of these issues needed to be looked at collectively. They were indeed themselves trying to make contributions through shelters and others and they knew the value of the Food Stamp Program. So trying to remove some of these barriers to make sure that people had it was part of the intent. Again, about 38 of us wrote to both the President and to Secretary Glickman relative to the New York issue when it first came out this last summer about the large number of people being denied food stamps.
I think that you spoke to how that might have come about, that people did not give people the proper information to say that as you are removed from the welfare rolls as required by the reform, that you still had a right, if you qualified income and were working, to get food stamps. So people were actually being denied by not giving them the proper information and just the hassle of having to go back to the office to get that. The attitude of people in dealing with them made it problematic. I know there have been to my count this week at least three national reports about the status—my time is just about up—about that.
Would you just comment on why you think that the drastic decline in food stamps, is it—I don't know how you account for it when there are still people needing food. Yet we have a 30 percent decline in the use of food stamps.
Ms. WATKINS. Mrs. Clayton, I think the GAO report addressed the concerns and addressed some of the issues that are involved in the decline in the food stamp rolls. They are some of the same things that we found, either anecdotally or some of the information that we gathered from States. Not only the strength of the economy, but in moving from TANF and moving participants from welfare to work, some of those families now have sufficient incomes. Some of them do not. Many of them, working poor families, don't realize that they are eligible. Sometimes they have gone in offices and have not been given the applications. Sometimes there has been difficulty understanding some of the changes in the program either by the caseworkers who sometimes don't understand or get misinformation, families get misinformation, and just all of the changes that have taken place.
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We just need to make certain that everybody understands what the rules are, what their benefit opportunities are, and then know how to access the system. This is a little different position than we might have been looking at some years ago. I think when you make major changes on a system and people don't understand the system, then it is time for us to ensure that people understand what their options are and make sure that that information is available in a language that they understand. And that is the reason the President has taken the actions that he has taken.
Mrs. CLAYTON. Thank you.
Mr. GOODLATTE. Thank you, Mrs. Clayton. The gentleman from Indiana.
Mr. HILL. Thank you, Mr. Chairman. I want to pick up with what Congresswoman Clayton was talking about.
Normally you would applaud the reduction of people being on food stamps or welfare. But what I hear you saying when you make the statement that two out of five eligible working families actually get food stamps, you are saying that three out of five people are going hungry overnight. Would that be true?
Ms. WATKINS. Mr. Hill, that is correct. We are looking at some interesting dynamics here. We need to be able to put all of this together to figure out how do we help people. One of the things that you suddenly realize is that people may be going hungry and they are doing the best they can. They recognize and they are excited about job opportunities and the new prospects. This is a real success for them. But then they suddenly realize that they can't make the ends meet on the salaries that they have. But they don't understand that they may still be eligible for benefits.
Mr. HILL. What did you mean, if you could expand upon it, please, that some are discouraged from applying for food stamps?
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Ms. WATKINS. Oftentimes what we found particularly in the States where we have been working very closely and monitoring those States and local programs is that they go into a welfare office and they are given information on jobs and employment opportunities, but they are not given information on food stamp eligibility, or they may have to go to different locations for each one of those. So if they go into an office looking for job opportunities, which they think that is what they are supposed to do, they don't know—and they are not told that, they have to go to another location to apply for food stamps, either in the same building or on a different floor or in another place, some other part of the city; or in rural areas, the same thing could apply.
So there are some real issues. And of course the law states that when you go in to apply for food stamps, you should be given an application when you go in. Sometimes people were told they had to go back two or three times before they were even given an application, or they could not get an application when they went into a food stamp office or an employment area for TANF or looking for other cash assistance benefits. They just were not told.
Mr. HILL. I think what I am getting at is do you believe that this is intentional?
Ms. WATKINS. I don't think this is intentional. I would not say that people would intentionally deny people an opportunity for food and nutrition assistance, but there are some concerns as to why these things are happening.
Mr. HILL. Could you explain the policy initiatives announced by the President on July 14 ?
Ms. WATKINS. What we have done in these initiatives, it will make it easier for working families to own a car and still receive food stamps. It will make it easier for States who are serving working families by simplifying the rules so that families don't have to come in and make all of those changes every month, but they can do that quarterly. And then the educational campaign will provide more opportunities for people to learn about the program and what their eligibility status is.
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Mr. HILL. Thank you, Mr. Chairman.
Mr. GOODLATTE. Thank you, Mr. Hill. The gentleman from Oregon, I apologize. I jumped over you a moment ago.
Mr. WALDEN. Thank you, Mr. Chairman. No problem at all. Thank you, Mr. Chairman, for holding this hearing today on the operation of the Food Stamp Program. I appreciate your leadership on this issue and look forward to working with you from this day forward.
The State of Oregon has long been recognized for its success at reinventing welfare for recipients of cash and public assistance benefits. In fact, when I was in the legislature in 1989, we were launching and getting the results from a pilot project that had been launched the session before looking at how you break the cycle, how you get people the things they need to be able to change their lives in a dramatic way so that the next generation doesn't follow the preceding one.
I think that we have accomplished some great success in that respect. In an effort to relay Oregon's experiences in working with this program, I would ask that I be able to submit for the record testimony of Sandie Hoback who is the administrator of the Adult and Family Services Division at the Oregon State Department of Human Resources. I believe that Sandie Hoback has great knowledge of the Food Stamp Program and would like to share with the subcommittee her thoughts on how the program could be improved. I have her written statement, Mr. Chairman, that I would like to insert into the record.
Mr. GOODLATTE. Without objection we would be pleased to have that.
[The statement of Ms. Hoback appears at the conclusion of the hearing.]
Mr. WALDEN. Thank you, Mr. Chairman.
Then I would like to direct a question to our panel here, our witness. Some of what she says exemplifies what some of the States find, that is trying to figure out how to make a one-size-fits all Federal program be more flexible at the local level. I think that we have shown in a number of areas in Oregon, whether it is Medicaid reform or welfare reform or educational reform that we have been in the forefront trying to look at new models that will work. But she raises some issues here that I would appreciate just alerting you to, Ms. Watkins, and others.
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She says that here is what I know does not work or does not work well in today's Food Stamp Program. The program policies are very complex and often do not make sense when you are trying to tailor services to meet the individual needs of recipients. Staff must spend way too much time in figuring out how to apply the complex policies. Clients are very often confused by them and little time is left over to work with clients do help them obtain a better economic status and improved nutrition.
Then the second point, the rules governing food stamp employment and training program are completely out of alignment with what is needed to run a successful program especially the lack of flexibility around how the allocations are used with 80 percent of the ENT dollars needing to be spent on the ABAWD population and only 20 percent remaining for all the clients. Because of the FSENT programs that are out of step with all other employment and training programs we are unable to partner with the delivery of services to food stamp clients similar to what we are doing with welfare-to-work initiatives.
Finally, she says, the quality control process drives us toward a system that focuses on minute detail rather than a system that focuses on positive outcomes for clients.
I would ask you to respond to those three points. Before I do, though, I would just say that we have tried in Oregon to create a system within our State government structure that really focuses not on micro-management from the bottom up, but rather the results. Did we achieve some results? Did we change some people's lives? Not whether we filled out the forms right and that direction but rather if we measure the outcome, is the program accomplishing anything?
So I throw that out. I know that you are making some changes at the Federal level, and I just appreciate your reaction, if you have some comments. Thank you.
Ms. WATKINS. Mr. Walden, I appreciate you asking those questions and bringing those forward from Sandie. We have worked with her and had lots and lots of conversations with the staff in Oregon. We are looking at a variety of issues that she has raised and have some concerns, similar concerns that she has.
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I think that we all need to be open and look for as many creative ways that we can do things administratively. Obviously, if there are legislative kinds of fixes, we can't do that. But we do want to be as open as we can, as flexible as we can in working with people. QC is an issue that both the Secretary and I are committed to looking at; what can we do administratively to look at outcomes? That obviously is something the Vice President and the President have talked about and encourage us to get out and do more about. How do you measure outcomes rather than getting so hung up on whether or not I make an error when I fill it out? That is troublesome. QC is something that we hope that we can reinvent. That is something that we will continue to look at. The ABOD situation and training for and getting people to work is also a cumbersome process.
I guess I look at things to figure out how can I make it simple and easy so I can understand, so I can do it. That is something that we will continue to do. Both Julie, Sam, and I will continue to work aggressively with Susan and the staff to see what are the things that we can do to work with States to make it a program that is not so complex and complicated that people don't understand what this program is all about.
Mr. WALDEN. I appreciate that response, Mr. Chairman, because I think that is exactly what we all want. Where you have got some innovation at the State level, perhaps there are waivers that can be issued. This administration frankly has been good at that in other sectors to allow States to do it their own way, to deal with their own unique populations, and the needs they have. So I appreciate you working with her, and I appreciate your interest in helping us out there.
Mr. Chairman, I would just point out in reference to your own legislation that Oregon has had the electronic card for some time. Apparently it has a forward contract about 9 years out so that they could get a very reduced rate in going through this process. It is working, and I look forward to working with you on your proposal for a nationwide system such that again where States are out there and doing things right, that we don't put a No. 9 shoe on all of them that may not work. I know that you want to make that a system that works for everybody. I look forward to working with you on that.
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Mr. GOODLATTE. We do. We will also make sure those folks in the far northern reaches of northern California can come into your district and spend some money there with you.
Mr. WALDEN. Mr. Chairman, we always like it when people come out of State and come and spend lots of money in our district. Thank you, Mr. Chairman.
Mr. GOODLATTE. I look forward to working with the gentleman. The gentleman from Virginia.
Mr. GOODE. Thank you, Mr. Chairman, and thank you for holding these hearings. I would like to ask the panel, you mentioned the situation involving legal immigrants. Nationally, how many in that category are on—receive food stamps on an annual basis last year, if you have that information?
Ms. WATKINS. Mr. Goode, if you give me half a second, we will find that information. If I can't find it, I will get it to you.
Mr. GOODE. You can't beat that. Let me go on in that same category—well, not in the same category, but in a similar category.
How many refugees get food stamps a year in the United States, would you say? Do you have that category broken down?
Ms. WATKINS. I will have to provide that for you. We will be glad to get that information to you.
The answer to the legal immigrant is some 706,000 in the summer of 1997. So we will have to get that information for you, but we would be glad to provide that for you.
Mr. GOODE. The law experienced some change between 1997 and today.
Ms. WATKINS. That is right.
Mr. GOODE. What was the impact on the figures? Do you have any idea?
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Ms. WATKINS. I don't have that information, but I will get it to you. We would be glad to provide you with those numbers.
Mrs. CLAYTON. If the gentleman would yield, two things happened. There was a modification, a denial of legal immigrants and then there was rectification last year on that. So I would like to amend this to see if there has been results since 1998 because what we did in 1995 was revisited in 1996. So there should have been a drastic decrease. I know the Hispanic community and others were concerned about this. Then Congress had a legislative initiative for an attempt to fix it.
Mr. GOODE. Mrs. Clayton would know better than I would, but I think a change was made before it all went into effect, is that correct, or did it go into effect and then the change was made?
Ms. WATKINS. We had the change. We reinstated—we had some monies and we reinstated some portions of the legal immigrants. That was a change. So we need to provide you the data that shows you before welfare reform, after welfare reform, what the changes were at first when we had the significant drop for legal immigrants, what happened when we restored monies for some legal immigrants, and what happens for this year when we restore it back, some more money to reach some more legal immigrants so that you have a group of years here so we need to provide you with that information. We can do that.
Mr. GOODE. If you could do it on a monthly basis, we could probably see where it dipped or whether it was in anticipation of a changing rule.
Ms. WATKINS. We would be glad to do that.
Mr. GOODE. Let me ask you now with regard to refugees. Do you have that, the figures on——
Ms. WATKINS. The refugees, yes. 265,000 refugees in 1997.
Mr. GOODE. I would assume that figure would change like in this year when more people came from Kosovo or certainly Central America after the hurricane.
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Ms. WATKINS. That number would change. We can provide you that information as well.
Mr. GOODE. Let me ask you this. Those that seek asylum, are they classified as refugees, or if they get asylum by immigration, how are they classified?
Ms. WATKINS. They are in that count that I gave you. They are in the refugee count.
Mr. GOODE. If you could get that information, I would appreciate it.
Ms. WATKINS. We would be glad to provide that for you.
Mr. GOODE. Thank you. I yield back.
Mr. GOODLATTE. I thank the gentleman. I am also interested in the same information that the gentleman has requested. So if you could forward it to the committee, we will make sure that all Members have an opportunity to see it.
Ms. Watkins, since you have identified the reduction of the food stamp caseload as a problem, and I must tell you while I think there are problem areas always to deal with, where illegal barriers are raised in some instances to people who are receiving food stamps, we have to be on our guard to do that. But nonetheless, I think most of the reduction is a sign of people taking responsibility for their own lives, for an economy creating millions of new jobs, and lifting people up and out of conditions that cause them to want to have food stamps before. Nonetheless, you have identified as a problem—I wonder if you feel that the President's July 14 announcement cures the problem?
Ms. WATKINS. Mr. Chairman, I don't think that cures the problem. I think that is the first step.
Mr. GOODLATTE. Well, let me ask you this. If, as you have identified, there are millions of Americans in desperate situations, why would the President propose something that is only a first step that doesn't cure the problem?
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Ms. WATKINS. I think you have to start somewhere. I think there are some things that we can do administratively, but there are some things that are legislative fixes that perhaps are needed.
Mr. GOODLATTE. Well, with regard to the budget that the administration submitted to Congress in this area this year, there are no significant fixes legislatively that the administration has proposed for this problem. Why is that?
Ms. WATKINS. Mr. Chairman, we have to identify what some of those problem areas are. We made and developed a budget based on the current data that was available for us. Obviously, we are seeing some different kinds of things happening. While you may have anecdotal information, you cannot base all of your budget decisions and financial decisions on anecdotal information. You need facts.
Mr. GOODLATTE. Let me ask you then. Are you saying that the conclusions that you have expressed to us today about a desperate situation are based upon anecdotal evidence?
Ms. WATKINS. I think that we have more definitive information now than we had, say, a year ago on where we were and where we are with some of our programs as a result of welfare reform. I think as you get more solid information and definitive information, you can then begin to assess what you need to propose. And I think as you look at it and we have indicated to you, you also have to have offsets and try to figure out what those other issues are. Obviously, we will continue to look for ways to improve the system and look for ways to finance a system if we think there are improvements, other improvements needed.
Mr. GOODLATTE. The President had a $1.25 billion rescission in the Food Stamp Program this year.
Ms. WATKINS. As I indicated, we base that information on the data that we had. Things have changed. We have new information. I think that we are in a better position to make recommendations where we did not have that information. With welfare reform and changes taking place and people were trying to understand the system, what this was all about, obviously there were a lot of things going on. It takes a lot of information to be able to make some good recommendations.
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We would not want to make recommendations or decisions on knee-jerk reactions but based on good solid information. That is where we are and will continue to look for positive ways to make changes in this program as in all of the programs that we are responsible for administering. One of the things that we have tried to do is look at this nutrition assistance, all of other programs, as a business. We look at it as a nutrition business and in doing so, you have to do that with some good solid information. We would not, the three of us would not make a recommendation to anyone unless we had some good solid information. We will continue to look.
Mr. GOODLATTE. And I applaud that and I approve of that. But the President, on July 14, presumably had the same information that you share with us today. On July 14, he made, I think, an announcement that would not go to the same lengths that you seem to suggest need to be gone to if we have a problem of the depth that you think the information would indicate.
I don't want to continue the debate right now because we have a vote on. I know Mrs. Clayton would like to ask a bunch more questions before we recess for the debate. I don't want to hold you after. We will recognize Mrs. Clayton. We thank you.
Mrs. CLAYTON. I just want to follow on the same line of thought and jumping ahead on someone else's testimony. And just to share with you, there is a bipartisan concern about the underutilization of the existing programs we have now.
Representatives Johnson, Archer, and Shaw noted that the caseload data from the Food Stamp Program and the Medicaid Program seem to indicate that many adults and children who meet the demographic income and reach those standards for these benefits are not receiving them. Now, there is something there. It may be money, but what I am looking at as I sit in the Budget Committee, there is an underutilization of the dollars as well. Apparently, this, what Representatives Johnson, Archer, and Shaw are referring to here, they are looking at caseloads.
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I am not sure what the President has proposed—and I accept your observation that that is not the complete picture. I know it is inconsistent. It is not complete when one has a cure. I can tell you there are more than 130 people who propose that legislation knew that wasn't a complete fix either. But I think what we want to emphasize is that the economy indeed has been robust, and we are thankful for that.
Many people are off of food stamps because we have a good economy. You cannot explain away 30 percent of the reduction of food stamps in such a drastic decline when there is an increase of people needing food. Something is not consistent with that information. So I want to put on the record that we need to do more whatever that is, information, explanation, making sure that States do what they should do, making sure that people have the kind of education because there are people who need the program that are not getting it.
I can testify in eastern North Carolina, in my district, many parts of this country, we are not enjoying a good robust economy. So Mr. Chairman, I thank you for allowing me to put that in the record.
Mr. GOODLATTE. I thank you for your comments. Ms. Watkins, I thank you and Ms. Paradis and Mr. Chambers for your testimony here today. We look forward to continuing to work with you on all of these issues regarding programs under your supervision, and we will continue the hearing with the second panel after the votes. Thank you very much.
Ms. WATKINS. Mr. Chairman, thank you so much and Mrs. Clayton for all of the hard work that you do. We look forward to working with you. We do have a lot of issues and we look forward to working with both you, the committee, and the States. We have a lot of work to do. We are very encouraged with what the States are doing and look forward to making this program the best that we can make it. Thank you very much.
Mr. GOODLATTE. Thank you. The subcommittee will stand in recess.
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[Recess.]
Mr. GOODLATTE. We now would like to welcome our second panel of witnesses. Mr. Clarence H. Carter is commissioner of the Virginia Department of Social Services; Mr. Douglas E. Howard is the director of the Michigan Family Independence Agency; Ms. Linda G. Fox is the secretary for the Maryland Department of Human Resources; and Mr. Larry Goolsby is the senior policy associate of the American Public Human Services Association.
I would like to welcome all of you, and we will start with Mr. Carter. We are glad to have a fellow Virginian here.
STATEMENT OF CLARENCE H. CARTER, COMMISSIONER, VIRGINIA DEPARTMENT OF SOCIAL SERVICES
Mr. CARTER. Mr. Chairman and members of the committee, I am pleased to be with you this morning. I would like to bring you greetings on behalf of Governor Gilmore and Health and Human Resources Secretary Claude Allen.
I have submitted the full text of my remarks to be submitted into the record. If I could, I would like to direct my time to a couple of specific points contained in the text.
The one thing I would like to read this morning is the compact of the Food Stamp Act, and I would just like to read briefly the declaration of policy statement in the Food Stamp Act.
It is hereby declared to be the policy of Congress, in order to promote the general welfare, to safeguard the health and well-being of the Nation's population by raising levels of nutrition among low-income households, Congress hereby finds that the limited food purchasing power of low-income households contributes to hunger and malnutrition among members of such households. Congress further finds that increased utilization of food in establishing and maintaining adequate national levels of nutrition will promote the distribution in a beneficial manner of the Nation's agricultural abundance and will strengthen the Nation's agricultural economy as well as result in more orderly marketing and distribution of foods.
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To alleviate such hunger and malnutrition, a food stamp program is herein authorized which will permit low-income households to attain a more nutritious diet through normal channels of trade by increasing food purchasing power for eligible households who apply for application, or who apply for participation.
I would also commend to your attention the seven principles that Deputy Under Secretary Watkins outlined in her presentation, and using those two as a backdrop, I guess I would ask how a program that we measure only for payment accuracy, how we determine whether or not any of those goals are met.
We could deliver the food stamp benefits without one single error and we wouldn't know whether or not a child went to sleep hungry in the evening or whether or not we moved one family towards self-sufficiency.
So it seems to me—as I was growing up, my father said to me on many occasions when you are up to your elbows in alligators it is difficult to remember that your original intention was to drain the swamp.
If our original intention here is to provide for healthy nutrition of low-income families, should we in some way be measuring whether or not the program accomplishes that goal, and we currently are not.
The second point that I would like to make is that I understand the emphasis that food stamps was not to be part of welfare reform, but I think the States have made monumental progress, and the principle of moving people towards self-sufficiency and not warehousing them in a condition of public dependency is appropriate public policy.
So we think in that regard that it would be appropriate for food stamps to be aligned more with the goal of self-sufficiency. Again, the things that we measure in the food stamp program currently don't let us know that we are getting one family towards not needing those services.
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I would close with asking for some increased use of waiver authority. You know, States use the waiver provisions of AFDC to allow us to kind of build the foundation for what welfare reform ended up looking like in the Nation, and we think that by broadening the waiver ability in the Food Stamp Program, it could also allow States to do some experimentation so we could make programs tailored more towards its public assistance programs.
So we think by adding some performance measures, which would determine or help us know that we are meeting the original intent of the program, and also by trusting States who, I believe, have proven that we have the ability to make these programs work for the citizens of each State, that we can move the Food Stamp Program more in line with what we are doing with welfare reform.
Just two closing points: One, Mr. Chairman, is that I too consider the caseload decline not to be something which is a bad thing. We think it is actually something that is pretty good. Our public assistance caseload in Virginia has decreased by about 51 percent during welfare reform, and we think the fact that we are moving families along the way towards self-sufficiency is something that is good. It is not malicious. But I also would tell you that I would support the case workers in Virginia by saying we encourage getting benefits to every eligible individual, and so there is nothing going on at the case worker level which would suggest that we are making it difficult for individuals to obtain benefits.
I think one of the reasons that some of the information was so anecdotal and can't be more solidified is because we do not measure any of those kind of things. So we would suggest that there are some other measures that we could put in place that would make the Food Stamp Program better conform with welfare reform.
Thank you for the opportunity to share with you this morning.
[The prepared statement of Mr. Carter appears at the conclusion of the hearing.]
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Mr. GOODLATTE. Thank you, Mr. Carter. Those comments are helpful.
It is good to know that efforts are ongoing, and I expect they would be ongoing because many of the same people who were signing people up for benefits prior to the changes in the law are continuing to sign people up today, and I can't believe that their attitude, in terms of making sure people get benefits they are entitled to, would change.
Mr. CARTER. That's exactly correct.
Mr. GOODLATTE. Next we would like to welcome Mr. Howard.
Let me remind all of the witnesses that your testimony will be made a part of the record. We were very liberal with Ms. Watkins because we wanted to make sure the administration had a full opportunity to air their views on this subject, but we hope you will limit your comments to 5 minutes, and I may point that out to you if you go too far beyond that.
So Mr. Howard.
STATEMENT OF DOUGLAS E. HOWARD, DIRECTOR, MICHIGAN FAMILY INDEPENDENCE AGENCY
Mr. HOWARD. Thank you, Mr. Chairman. I would like to thank you and the members of the subcommittee for the opportunity to speak today. I am Doug Howard, director of the Michigan Family Independence Agency, which is an umbrella human services agency.
We work with food stamps as well as other issues affecting children and families and adults.
Let me start by saying that the Food Stamp Act of 1977 is a program that we believe is very essential to millions of our Nation's less fortunate citizens. It provides a food and nutrition safety net that States do value. We see it both as a support to working families, but we also recognize that it is critical to those without income or to those on limited fixed income.
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When we look at the programs we administer, we recognize that many Federal-funded programs are intended to either provide a safety net or to provide transitional assistance. However, these programs often send mixed messages on personal responsibility and independence, and we have seen a growing trend in administrative complexity. It is to the point where I see in daily examples clients in our frontline staff being very overwhelmed about the programs they have to administer.
In the early 1990's, Michigan Governor John Engler moved to reform welfare in our State, focusing on a system of work and work supports rather than a system of income maintenance. Michigan was one of many States that were granted waivers from policies governing the former Aid to Families With Dependent Children program.
As a result, we have seen since 1992 over 217,000 Michigan families leave welfare cash assistance due to earnings from employment. We believe we know how to design effective programs that help meet the needs of families and moving to independence while providing supports to help them in their transition.
We also attempted to secure waivers in the Food Stamp Program but met with different results. Many of our waivers were denied, and over time we really see two reasons; one was essentially, initially, because of the issue of harming clients.
I think the views of the States would be that if we submitted a waiver where we saw a greater good, that there could be a benefit to large numbers of individuals. If there was a counterbalance of harming even one or a limited number of individuals, those waivers would be denied. I would argue that that, in essence, is a lost opportunity for program improvement.
Since the passage of Federal welfare reform, the 1996 PRWORA Act, we have seen a big attention from USDA around the issue of cost neutrality, looking at policy initiatives that is not costing more in any given year than they would have under the prior policy.
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Prior to PRWORA, the Federal Government looked at cost neutrality as a whole over a negotiated time frame for multiple programs. We found this multiyear approach to cost neutrality as providing much greater flexibility, giving us a much more realistic chance of implementing programs that could make a difference and bring a consistency to programs. We saw that as a benefit both to States and to families.
One example of a denied waiver we had was in the area of shelter deductions. Currently, there is a significant standard of proof around shelter costs and utility obligations. We have received from the Federal Government 75-page guidance on how to compute the excess shelter part of the budget, and we have received 24 policy memorandums on the same subject. This is a high-error-prone element that we struggle with. Staff spend lots of time on it, and we see this as one example where complexity has overcome flexibility.
I would also like to state for the record States also share the concern about the inability of current and potential clients to access food stamp systems. I think some of the policies we have in place do create an indirect dampening effect. For example, staff, faced with the possibility of making an error, look at the current $5 tolerance in an error and feel like they must repeatedly verify every aspect of the family situation.
For working families, time off work, repeated program reporting requirements can be too much.
What are we doing? We do have local offices with extended hours. We do take steps to encourage families to take advantage of food stamps, and we do view food stamps as an effective transitional support.
We do applaud the administration's recent efforts to raise the tolerance from $5 to $25, as well as other changes, but if I do quick math and think about our environment of work—essentially, a rule of thumb is $3 in income effects about $1 in food stamps. So a $25 tolerance would be equivalent to about $75 in monthly income. If I divide that by $6 an hour, we are looking at a variance of 12 1/2 hours per month, roughly 3 hours a week, in an area where we are really trying to encourage people to take advantage of work. Sometimes in jobs that are stepping them up, a 3-hour tolerance is not very significant.
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Governor Engler recently wrote to Secretary Glickman urging that FNS test for improved outcomes by allowing Michigan and other States unprecedented authority to administer the Food Stamp Program. He conveyed that current food stamp rules predate Federal welfare reform and often pose conflicts for staff. The unfortunate message we send to staff is that the perfect case in food stamps is one in which the client never goes to work, so that we don't have to deal with income; they never move or get better housing, so we don't have to deal with shelter or utilities; and they never get a better car. All these things affect eligibility and accuracy.
We would encourage Congress and USDA to give us the opportunity to look towards some additional flexibility and look forward to those future opportunities.
I would like to thank you for the chance to discuss this with you today and look forward to joining my colleagues in answering any questions you might have.
Mr. GOODLATTE. Thank you, Mr. Howard.
[The prepared statement of Mr. Howard appears at the conclusion of the hearing.]
Mr. GOODLATTE. Ms. Fox, we are pleased to have you with us.
STATEMENT OF LYNDA G. FOX, SECRETARY, MARYLAND DEPARTMENT OF HUMAN RESOURCES
Ms. FOX. Thank you. Good morning, Mr. Chairman, members of the committee. I am Linda Fox. I am secretary of the Maryland Department of Human Resources, and today I would like to speak to you about Maryland's attempt to conform the Food Stamp Program and make it more responsive to our vision of welfare reform, the opportunities available through our local Departments of Social Services, and most importantly, the individual needs of our customers.
I would also like to outline how some of the current legislative and administrative requirements of the Food Stamp Program hinder our attempts, but more importantly, limit our customers' efforts to use the program to become as independent as possible; to really use the program as a nutritional safety net, but also as a major support to their efforts to become and remain independent.
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Our vision of welfare reform is a Maryland where people independently support themselves and their families, but currently the Food Stamp Act and regulations do not support that vision.
To realize our vision, we need greater flexibility in the Food Stamp Program either through changes in legislation or through expanded waiver authority. We also need some practical options for developing a simplified Food Stamp Program and modifications to the methodology used to calculate cost neutrality.
We strongly support the APHSA's recommendations that are going to be described in more detail by my colleague, and we want to point to the fact that those recommendations would help us develop a more effective system.
There are some examples of how the current program blurs our vision of welfare reform. We have not been able to use the limited waiver authority to support our welfare reform initiatives. When we began welfare reform, we asked to exclude the value of one vehicle per household, regardless of whether or not the family received cash assistance. We thought this was a practical and effective way to allow a household to maintain employment while continuing food stamp participation.
The waiver was denied because it did not meet cost neutrality requirements.
We have all heard stories of families denied food stamps because they own a car. We certainly applaud the recent efforts of the administration to extend categorical eligibility to those who leave welfare for work and to enable them to continue to own cars. However, there are many families that are low-income, need food stamps, but have never been on welfare or won't benefit otherwise from the TANF program.
Recently we had a mother come in. The father had abandoned the family. They didn't get cash assistance because they had a small amount of income. They would have been eligible for food stamps, but the father had left behind a car. The car was in joint title to the mother and the father. She couldn't sell the car, but the car made her ineligible to food stamps. But she couldn't feed the children sliced car for dinner.
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One of our welfare reform initiatives that was initially approved was to use a flat 50 percent self-employment deduction. We thought this was an effective way to allow the self-employed to retain a little more income when determining eligibility for food stamps and to make calculations easier and record-keeping easier for both case managers and customers. When we requested an extension of this waiver, it was denied because it conflicted with the Food Stamp Act.
When the simplified Food Stamp Program was offered, we worked with the contractor provided by FNS to determine cost neutrality, but it was readily determined that the program we envisioned would not meet the cost neutrality requirements, and we also realized we would be operating two separate food stamp programs that would impose a considerable administrative burden on our frontline staff.
Our efforts to better align our success in welfare reform efforts have been restricted by unrealistic and impractical regulations that do little to assist our customers. We really think that some change in law and regulations is needed. However, in the interim, before those changes are made, we are certainly energetically engaging in the nationwide effort to make sure that all eligible persons do benefit from the Food Stamp Program. We have had just as many people walking through our front door today as prior to welfare reform, while fewer people actually obtain cash assistance.
One of our diversionary strategies has been to help people get food stamps, and we certainly support the President's initiative to expand the program to meet the needs of the working poor. We have engaged in extensive outreach to make sure that those who are entitled do indeed benefit from the program. Recently we have contracted with two of our universities who are attempting to reach everyone who has left our cash assistance program in the last 6 months and everyone as they leave to make sure they understand and are getting the benefits to which they are entitled—specifically, food stamps, but also Medicaid, child support assistance, child care assistance, the earned income tax credit, et cetera.
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The initial response to this outreach has been very, very good and we have had lots of folks contact us to get those benefits.
Basically, we think that the guiding principles of the program need to be a focus on promoting independence, simplicity of program design, flexibility for local circumstances and innovation.
We really would like to see the program reformed and we want to thank you for the opportunity to speak today and certainly would like to work with the committee in the future.
Mr. GOODLATTE. We thank you, and we look forward to working with you as well.
[The prepared statement of Ms. Fox appears at the conclusion of the hearing.]
Mr. GOODLATTE. Mr. Goolsby, glad to have you with us as well.
STATEMENT OF LARRY GOOLSBY, SENIOR POLICY ASSOCIATE, AMERICAN PUBLIC HUMAN SERVICES ASSOCIATION
Mr. GOOLSBY. Well, thank you, Mr. Chairman and members of the subcommittee for the chance to testify today. I am Larry Goolsby, senior policy associate with the American Public Human Services Association, APHSA, a bipartisan organization representing the State human service administrators who administer the Food Stamp Program; and I certainly want to thank the three directors and the commissioners who have come here today to share their very pertinent viewpoints and information with you.
Last September, APHSA testified before this subcommittee and called for urgently needed food stamp reforms to simplify the program so that it can better meet the needs of the low-income families and adults it serves. Since then, APHSA has adopted policy resolutions, met with Hill staff, administration officials, and conducted Hill forums, all in an effort to make the case for broad and comprehensive Food Stamp Program reforms.
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Last month, President Clinton announced several food stamp administrative changes that we have called for, including allowing more TANF families to keep a reliable car while getting food stamps; reducing the paperwork burden on working families so they do not need to miss work to report and verify income repeatedly; and increasing the threshold of payment accuracy from $5 to $25.
APHSA commends the administration for making these changes. They are an important first step toward comprehensive reform of the program.
State administrators are calling for similar but bolder changes in a variety of areas that I will briefly describe. A full description of our proposals is in our written testimony and attachments.
Our first proposal is to increase food stamp policy flexibility through waiver authority. Present food stamp law evolved in an era when few recipients worked and most received monthly Aid to Families With Dependent Children checks.
Since the enactment of welfare reform, thousands of families have made the transition from welfare to work so that now food stamp-only households make up an increasing share of all cases. For these working families, federally mandated, detailed reporting of income changes places unnecessary burdens on them and their employers, and unrealistic asset limits deprive most of them of a reliable car. To serve the new influx of working families, the Food Stamp Program must be simplified and must be allowed to use the successful designs in the TANF program.
Because States serve their low-income families through so many different approaches, the best way to accomplish this is through expanded program waiver authority. Current waiver authority is so constrained by exceptions, conditions, and unrealistic cost neutrality rules, that it is no longer useful and numerous State waiver requests have been denied.
Even the simplified Food Stamp Program option enacted to let States achieve a degree of food stamp conformity is saddled with the same problems, and as you heard from Under Secretary Shirley Watkins, only a small handful of States have been able to take advantage of it.
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Congress and the administration should immediately broaden current waiver policy and allow new demonstration programs.
We also urge a reduction in program barriers for the elderly. They are one of the most underserved groups in the food stamp caseload, and the paperwork burdens and the other obstacles they face should be reduced.
Currently, many elderly recipients receive the $10 minimum benefit, hardly an amount worth the aggravation of the going through the eligibility process. Unlike the more flexible Medicaid program, recipients are not eligible for food stamps if they have saved cash, have covered burial costs or transferred resources for this purpose. The Food Stamp Program instead exempts only a $1,500 funeral agreement and a burial plot.
The elderly must also bring in receipts for all medical and prescription drug costs rather than use a standard medical deduction. APHSA calls for a $25 minimum allotment, automatic eligibility for those elderly also receiving SSI, an increase in the elderly resource limit coupled with more reasonable burial allowance rules, and a standard medical expense deduction.
For the working poor, elderly or disabled, the Food Stamp Program has grown so complex and inflexible over the years that it no longer meets the needs of the low-income families and adults it aims to serve. Something must be done to address the situation.
We acknowledge there are concerns about the decline in food stamp caseload. There are many possible reasons: a good economy, the dramatic success of State Welfare-to-Work efforts, the series of eligibility changes since 1996, especially immigrant benefit changes with conflicting TANF and food stamp eligibility messages, and the paperwork burdens and participation barriers we are identifying today.
States are undertaking extensive studies and assessments of both TANF and food stamp outcomes, and many Federal and advocacy organizations are conducting ongoing analyses as well.
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Should these efforts suggest policy changes that may be necessary, APHSA looks forward to working with the subcommittee to address those recommendations.
We must also streamline the quality measurement system. The Food Stamp Program has long been measured almost exclusively on the total and predictable accuracy of reported income levels, but many entry-level jobs are short-lived and their wages fluctuate, causing, in turn, frequent changes in child care, child support and other household financial factors. The result is that as more food stamp recipients go to work, penalties for income calculation errors increase.
APHSA calls for bold reforms to improve the quality measurement system and this step, along with simplifying the program, would also reduce the currently high administrative costs which are now at a record 18.5 percent of a typical case's benefits.
If I may quickly mention two additional issues, as we testified last September, the food stamp, employment and training program sets aside 80 percent of its funds for single, childless adults, but in fact, few of these adults remain on the food stamp rolls. States have thus been forced to reduce E&T services to families, yet cannot usefully spend most of their allocation. We should be increasing job services to all who could benefit, not cutting back. APHSA strongly urges the removal of this 80 percent restriction.
Finally, the food stamp administrative cost allocation changes enacted last year have resulted in a net reduction in funds available for food stamp administrative use. This fiscal year alone, States will lose $226.6 million, even as administrative demands steadily increase.
APHSA urges that the cost allocation law and its assumptions be completely reassessed so that equity can be restored to the Federal-State administrative partnership.
Thank you very much, Mr. Chairman, for this opportunity to testify. APHSA and the State human service commissioners look forward to working with you on the changes we propose, changes we believe can greatly improve the Food Stamp Program for both administrators and participants.
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I will be glad to answer any questions for you now or at a later time.
[The prepared statement of Mr. Goolsby appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Mr. Goolsby.
I want to thank all four of you for your testimony and for keeping close to the 5 minutes on your testimony. It was great.
Mr. Carter, would the Commonwealth of Virginia support an initiative that allows the States to establish their own rules for the Food Stamp Program within certain parameters, much like the States now have for the welfare program, TANF?
Mr. CARTER. Mr. Chairman, we absolutely would. We think that not only in the Commonwealth of Virginia, but across the Nation, States have proven—they have taken a very innovative approach to the self-sufficiency of its citizenry; and we think that that kind of authority—if we could combine our cash assistance program with the Food Stamp Program, it would allow us to have a consistent social safety net designed and operated along the same parameters. So we absolutely would support that.
Mr. GOODLATTE. Very good.
Mr. Howard, same question.
Mr. HOWARD. Yes, absolutely. I think we—as Mr. Carter stated, the same answer in our State. We believe we have proven that we can address the needs of individuals and families and children. We believe that there are ways to structure that so the parameters can still recognize the value of having a national safety net, while allowing some unprecedented flexibility for States.
Mr. GOODLATTE. And, Ms. Fox, I know you have indicated the same in your testimony.
Ms. FOX. Yes.
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Mr. GOODLATTE. Is there anything you want to add to that?
Ms. FOX. No. I just think if we have the same type of flexibility that we have had in the TANF program in the Food Stamp Program, we could do a better job for the people we serve.
Mr. GOODLATTE. Thank you.
Mr. Carter, you indicated that Virginia has seen a reduction in the number of families receiving food stamps, and I think you indicated your agreement with me that that is generally a positive development.
I wonder if you have any more insight you would like to share with us as to why you think that reduction has taken place.
Mr. CARTER. Well, I do think that with the coming of welfare reform, we have changed the discussion on what the social safety net ought to be. I mean, originally I think the social safety net was intended to be a trampoline and not a hammock, but the way that we had operated it over the past 35 years it very much became a hammock that trapped people in a cycle of dependency; and in the discussion that led us to welfare reform, it actually got us back to what the original intent of the social safety net was.
In addition, I guess I would ask the question—you know, we talk about this caseload decline—is it possible that there are individuals and families that could meet the arbitrary threshold that would make them eligible for a program, but they just choose not to take advantage of the program? I mean, I think there is such a thing as free will in this country, and there are millions—or I think hundreds of thousands of Americans who, whether or not they meet the threshold, they have determined they can make their lives work without government assistance; and I don't think we ought to see that as a bad thing, but as a positive thing.
Mr. GOODLATTE. I agree with you.
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Mr. Howard, what has Michigan experienced with regard to caseload? I know from what I have heard from your governor that it has declined ,and he is very proud of that. I wonder what you would say about the reasons for that and how you view that development.
Mr. HOWARD. Yes. We have seen about a 62 percent drop in our cash welfare caseload. When we look over on the food stamp caseload, if we segment those who have received public assistance and those who haven't, we have really seen our food stamp caseload for those nonpublic-assistance families stay fairly flat over essentially this entire decade. There have been some fluctuations. We have seen a very significant drop in the public-assistance-related food stamp side, those who were receiving obviously cash welfare.
I think I would echo some of Mr. Carter's comments. We know from experience—we have families tell us that they don't want to deal with the system. They know they will struggle, but whether you call it pride or whether you call it not wanting to deal with the bureaucracy, they make the decision not to participate.
I think another interesting thing that has just recently emerged, we had a discussion at a recent States meeting around an emerging Urban Institute study, which for the first time is really trying to look at families within the welfare system versus other low-income families not in it. I characterized it kind of offhand as moving away from the traditional ''is the glass half empty'' or ''is the glass half full,'' and recharacterized it as maybe we are looking at the wrong size glass; because, actually, participation for most States among former public assistance families is still significantly higher than those families who have never entered the system.
So I don't know that we are necessarily scaring people away. I think there is an issue of there are conscious decisions out there about not using the system.
Mr. GOODLATTE. Ms. Fox, same question.
Ms. FOX. In Maryland our cash assistance caseload has decreased by 64 percent since January of 1995 through last month. Our food stamp caseload over the same time period decreased by about 20 percent.
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I think we are seeing some people making a choice not to participate in the program, even though they understand that they are eligible.
I think there has also been some confusion in the community about who is and who is not eligible, and we have been trying to address that.
For example, within my department we have an office for new Americans and we have commissions that serve Hispanics, Pacific Americans and migrant and farm laborers, and we find that there was a lot of confusion about which immigrant groups were eligible at which time. We have tried to clarify that information.
Every time we do outreach and public speaking engagements we try to explain that we are trying to help families become independent, and that that means becoming employed and becoming independent of cash assistance first; but moving toward independence can include using food stamps for nutrition assistance and using medical assistance, et cetera, that it is kind of a package deal and we encourage the use of the program.
Mr. GOODLATTE. Thank you.
Mr. Goolsby, from your organization's experience in dealing with all of these State agencies and their experience in dealing with the Department of Agriculture, how long does it take to get a decision from the USDA on a waiver application?
Mr. GOOLSBY. Mr. Chairman, I think that varies from case to case. I think usually, from what we hear, there are a number of months that elapse, sometimes even longer. Usually, though, I believe it is fair to say, it does take 4 to 5, 6 months.
Mr. GOODLATTE. Thank you. Do any of you want to add to that?
Mr. CARTER. No, Mr. Chairman. We have not attempted to use the waiver process—the very narrowly constructed waiver process. We couldn't comment.
Mr. GOODLATTE. OK. Thank you.
My time has expired. The gentle woman from North Carolina is recognized.
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Mrs. CLAYTON. Thank you. Those who represent the States, I would like to ask the following two questions. You have commented on this. I would just like for you to go a little further.
All three of you have acknowledged that there has been a large drop in the caseload of food stamps. How do you reconcile that with the high level of the working poor, that you have moved people from welfare to work, but yet as we look at your demographics in all of your States, we see the working poor.
The answer of some people electing not to do that, that has always been true. There will always be free will, Mr. Carter, so that is not an assumption of what I anticipate from you. I want you to analyze how it is that you have moved—and I will just share with you where I am coming from. I am trying to acknowledge the success of all the States moving people to work, and that is a good thing. I am trying to make a distinction between the working poor struggling and not getting food stamps. How do you reconcile that, all three of you?
Then if you do, tell me what specific steps—and I appreciate what I heard from Ms. Fox. She understood there are some variances. Tell me, if you are doing others—the information, I would appreciate. What are you doing, without making a cavalier assumption that people don't want it, to try to make sure that the working poor that you have successfully moved are now taking advantage of feeding their families, if nutritional adequacy is part of the program?
Mr. CARTER. Mrs. Clayton, I would say the first part of my response would be that we did an analysis, and only about 16 percent of all of those individuals who fell below the poverty level in the Commonwealth of Virginia access our public assistance programs. And so, therefore, from the beginning, a significant segment of the population that is eligible for it makes some kind of decision not to.
While we don't have an outreach program for public assistance programs in the Commonwealth other than children's health, we have a very active and aggressive case worker operation in the Commonwealth which wants to provide benefits for any individual that would be eligible for it.
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So I don't think that we are being the least bit cavalier when we suggest that there are a large number of Virginians and Americans who simply have made the determination—whatever the determination is, whether it is based on not wanting to deal with the bureaucracy, not wanting to have a public assistance stigma, whatever that is—that have made the determination that they can make their life work; their personal infrastructure is constructed in such a way that they can make their life work without this benefit.
Mrs. CLAYTON. Mr. Carter, let me make sure I understand you correctly because I don't want to assume.
Did I understand you to say 16 percent of all the poor who need assistance in Virginia are accessing it? I would assume that 84 percent of all the eligible poor for public assistance are not receiving it, and that is not a big red flag? Or did I misunderstood you?
Mr. CARTER. No, you are suggesting that because an individual or family meets the criteria described by the Government that they have made the determination that they need Government assistance. I am saying that those that fall in those arbitrary categories, 16 percent of those that fall in that arbitrary category, have made the determination that they need these kinds of public assistance.
Mrs. CLAYTON. Is that good news or bad news?
Mr. CARTER. I think it is a fact. I don't consider whether it is good or bad.
Mrs. CLAYTON. Mr. Howard.
Mr. HOWARD. Thank you. The issue of the working poor, I think, it is one that we all struggle with; and it goes back probably to the heart of the goal of welfare reform, and are we really trying to solve the full problem or are we looking at a bridge or a first or a second step. I think most States have taken the position that it can't be the whole answer; it has to be a part of a bigger picture.
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Mrs. CLAYTON. Even as a bridge?
Mr. HOWARD. Yes. So, in fact, we are moving many families into the ranks of the working poor, but when we look at the numbers and the income, we would argue clearly that they are still better off than before, and without that step, they can't move on.
We are doing, I think, some innovative things around, looking in the coming year at expanding our outreach for our traditional work and training programs to look at families who receive only child care or only food stamps or only Medicaid, to try to help them upgrade their skills and move them up.
So we are trying to take a holistic look.
The other thing I think I would say about the working poor, there may be a lesson learned here, I am not sure, but it just occurred to me and there are some slightly different goals, I acknowledge, but our line staff do view food stamps as a very critical transitional program to help people stay off of cash assistance. The other one that jumps out, in addition to Medicaid, of course, is child care. The lesson learned here, we have seen a growth—I believe our numbers in 1990, we had about a $20 million child care budget. Our budget for next year is $611 million.
I think the lesson learned there is, that program is much more streamlined, there is much less paperwork, it is much simpler to access and we don't have this stigma out there that this is just another welfare program.
So somehow we probably need to penetrate that and figure out the lessons learned.
To your question of, what are we doing about those families not accessing the system, I think some basic things. We are looking at how we reshape the image of our local agencies to one of a community service center designed to build stronger families. Some of those offices are looking at extended, and have implemented extended office hours. We have tried to be more aggressive in visual signs around the offices around making sure people understand that they can continue to receive food stamps.
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We have had discussions with nonprofit agencies about how they share information, and help some of their individuals access our services. And we have a heavy agriculture sector, heavily reliant on migrant labor, and a number of those individuals are eligible. We have actually some offices in some areas that we will go out and do some outreach on employer sites. So I think we are taking some steps to try to draw people in.
Mrs. CLAYTON. Thank you very much.
Ms. Fox.
Ms. FOX. I think one of the barriers may be that some low-income working families believe that the reduced level of benefit that they get when they are working doesn't make it worth their while to take the time to come in and apply and doesn't make it worth their while to reveal their whole financial history and provide all the pay stubs and things that are required.
I think if the program were made more user friendly in terms of eligibility determination, more of the low-income working families would be interested in accessing the program.
Now, one of the other things that we have done is try to make the program more accessible. Many of our local Departments of Social Services have changed their office hours from traditional office hours to being open either early in the morning or late at night 1 or 2 days a week, and some have even gone to being open on Saturday mornings to make the program more accessible.
We also, in our outreach efforts, worked with the Southern Regional Institute, which I know worked with several other States south of the Mason-Dixon line. We put out brochures that were directed not only at potential program participants, but also brochures directed at employers, particularly employers who hire large numbers of low-income workers, letting them know about the Food Stamp Program, medical assistance, the earned income tax credit, child support, et cetera, and encouraging employers to encourage their employees to access our programs.
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We also put videos that we prepared in conjunction with the Southern Regional Institute in our waiting rooms, also explaining—actually, the name of the brochure and the video was, It Is Not So Scary to Leave Welfare, explaining that there are these other components of the safety net there for the taking. I think that was fairly effective.
We also provided those materials in Spanish, which is the language of our largest minority group.
We have done a lot of outreach to the faith-based community and to the advocacy community and we certainly do get a lot of referrals from homeless shelters, from soup kitchens and particularly from churches in our more urban areas.
Mrs. CLAYTON. I appreciate that.
Let me just ask the connection between your Medicaid CHIP program in Maryland and food stamps. Can you share if there is a relationship?
Ms. FOX. Yes. In Maryland, the Maryland Children's Health Insurance Program serves children and pregnant women with incomes of up to 200 percent of poverty. Application for that program can be made either through the local health department, which is not under my umbrella agency, or it can be made through a local Department of Social Services.
If the family has an open food stamp case or an open cash assistance case, then the eligibility determination is done in the local Department of Social Services. But we have worked together jointly in terms of outreach for that program, and of course, when someone applies for CHIP, we also make sure that they aren't eligible for another category of Medicaid first.
We have recently tried to really again increase the outreach for both that program and Medicaid in general.
Mrs. CLAYTON. OK. I have some questions for the next panelist but my time is up. I will just say I acknowledge that—many of your recommendations, I concur with. I was a little disappointed you didn't give some recommendations for some flexibility for the elderly. I can just see how the costs for the elderly for diabetes and all that would have—and your organization, I know, does good work. So I just urge you to consider that your acknowledgment of the elderly as a problem needs to have some recommendations similar, as you have put forth for others in that area.
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Thank you, Mr. Goolsby.
Mr. GOOLSBY. Thank you.<