to work more and will reward such achievements. Moreover, for those Puerto Rican
families who earn little, EITC beneflts rise with earnings, thereby encouraging more work.
Welfare eligibility rules are considerably more restrictive for two-parent families than for
single-parent families. Because with the EITC no such differential treatment exists, in
recent years, the EITC has become increasingly important for poor and near-poor working
Puerto Rican families.
One very important consideration, however, is the need for federally sponsored EITC
outreach in low-income Puerto Rican/ Hispanic communities. The federal government must
target its outreach efforts on the Spanish-speaking population, many of whom are eligible
to receive the EITC. Particularly in Puerto Rican communities where a large number of
the population live below the poverty line, EITC outreach is essential.
THE IMPORTANCE OF THE TJTC FOR THE PUERTO RICAN COMMUNITY
Similar to the expansion of the EITC, the proposed permanent extension of the
Targeted Jobs Tax Credit (TJTC) and expansion of the credit to include youth
apprenticeships and enterprise zone residents would help ameliorate high levels of poverty
in the Puerto Rican community. Because the TJTC encourages employers to hire persons
from targeted groups with special employment needs, Puerto Rican workers have benefitted
from the program since its inception in 1979.
According to the 1990 census, the median age of Puerto Ricans is 23.7. Coupled with
the highest family poverty rates in the United States, an expansion of coverage of TJTC to
23 and 24 year old workers is of critical importance.
In order to lift the Puerto Rican community from poverty. NPRC urges Congress and
The proposal assumes thai the nunimum wage will be indexed so it keeps pace with inflatioa, a step
President Clinton proposed during his campaign.
the Clinton administration to permanently continue and expand the TJTC so that it remains
true to its purpose: providing job opportunities for the most disadvantaged workers.
JOB-RELATED INCENTIVES TO DISTRESSED PUERTO RICAN AREAS
The National Puerto Rican Coalition supports a proposal which aims at using Section
936 funds presently invested in Puerto Rican financial institutions (approximately $12
billion) to support mainland community development activities. NPRC maintains that a 936
lending program could ease the economic devastation of the proposed reform of Section 936
on Puerto Rican/ Hispanic communities. The special provision would allow for the
investment of earnings from companies operating in Puerto Rico to fmance qualified
projects in economically distressed areas in the United States.
Such a program would have objectives congruent with the President's national
economic plan which aims to foster community economic development and job-creation.
Because of the high levels of poverty in the Puerto Rican community, the 936 lending
program should focus its efforts on Congressional districts with 5% or more Puerto
Rican/ Hispanic populations. According to a recent report based on 1990 Census data, there
are at least 43 districts that meet this criteria in states such as Connecticut, Florida, Illinois,
Massachusetts, New Jersey, New York, and Pennsylvania. (See Table 1)
It is essential, therefore, that changes in Section 936 be made based on a recognition
of the unique status of Puerto Rico and the continued need for the retention of Section 936
funds on the Island.
ADDITIONAL RECOMMENDATIONS REGARDING WELFARE REFORM
To ease the transition from welfare to work, additional reforms are needed with
regard to the welfare system. The following recommendations are to compliment any
changes in the current tax laws which provide work incentives for low-income families:
â€¢ The number of bilingual welfare counselors, social workers, and educators who are
sensitive to the Puerto Rican culture must be increased so that they can provide
better quality services to Puerto Ricans in need of assistance.
â€¢ Counseling and psychological support are essential for most participants in JOBS
programs, especially for AFDC mothers bom in Puerto Rico as well as for those
mothers facing impediments in moving toward self-sufficiency.
â€¢ To ensure that Puerto Ricans falling within federally targeted groups for participation
in welfare-to-work programs fully benefit from services, two things are essential:
1. Programs must be marketed in an honest and straightforward manner.
In order to make participants understand the relationship between
program provisions and program practice, programs mtist be described
in ways that provide participants with realistic expectations of
outcomes, yet do not undermine their enthusiasm.
2. Programs must be offered to participants who are physically and
mentally ready to participate. A participant with severe human capital
deficits and acute personal problems who does not feel ready for
intervention, will not be receptive to change. Thus, prior to the
provision of services, programs might need to overcome the reluctance
and even hostility of participants whose attitudes are reinforced by
bureaucratic modes of operation.
â€¢ JOBS participants should be allowed to choose among various child-care options.
including family-based care. This is critical for Puerto Ricans, who often prefer to
leave their children with relatives or in other home-based settings.
Asset limits for AFDC recipients must be increased. This can be achieved by
allowing individuals receiving welfare benefits to keep whatever assets they might
have accumulated, thus ultimately making the transition from welfare to work easier.
Child support payments should be paid directly to the family so that the parent would
directly see the amount of support being provided.
Educational services must be improved to provide more qualified bilingual instructors
who recognize that Spanish-speaking participants need additional training and time
to overcome barriers due to limited-English-proficiency and limited job skills.
Congressman Rangel, Congressman Matsui, and members of the Subcommittees on
Select Revenue Measures and Human Resources, Puerto Ricans in the United States are
law-abiding citizens who care about their families. To provide equal opportunities for aU
Puerto Ricans, quality investments must be made. The National Puerto Rican Coalition and
the Puerto Rican community expect no more or no less from the federal government.
Once again thank you for the opportunity to submit a written statement. Any
questions would be welcomed.
Please direct questions to:
National Puerto Rican Coalition, Inc.
1700 K Street. NW, Suite 500
Washington, DC 20006
(202) 22Â»^15. ext. 29
REPRESENTATIVES OF THE DISTRICTS WITH THE LARGEST
PUERTO RICAN/ HISPANIC CONCENTRATIONS (5% & OVER)
APRIL 1, 1993
Barbara B. KenneUy (D)
Rosa DeUuro (D)
Christopher Shays (R)
Gary A. Franks (R)
John L. Mica (R)
BiU McCoUum (R)
Sam M. Gibbons (D)
Luis V. Gutierrez (D)
Dan Rostenkowski (D)
John W. Olwr (D)
Richard E. Neal (D)
Martin T. Meehan (D)
Joseph P. Kennedy 11 (D)
Joe Moakley (D)
Robert E. Andrews (D)
William J. Hughes (D)
Christopher H. Smith (R)
Frank Pallone, Jr. (D)
Herbert C. Klein (D)
Robert G. Torricelli (D)
Donald M. Payne (D)
Robert Menindez (D)
George Hochbrueckner (D)
Rick A. Lazic (R)
Gary L. Ackennan (D)
Floyd H. Flake (D)
Thomas J. Manton (D)
JerroW Nadler (D)
Charles E. Schumer (D)
Edolphus Towns (D)
Major R. Owens (D)
Nydia M. Vellzquez (D)
Susan Mohnari (R)
Carolyn B. Mak>ney (D)
Charles B. Range; (D)
Jos6 E. Serrano (D)
Eliot L. Engcl (D)
Nia M. Lowey (D)
Hamilton Fish, Jr. (R)
Benjamin A. Oilman (R)
Thomas M. Foglietu (D)
Robert A. Borski (D)
Paul McHale (D)
National Puerto Rican Coalition, Inc.
Source: Bureau of the Census, 1990.
Parents for Justice, 3 Pleasant St., Concord, N.H. 03301 . (b03)746-4817
flduocacy for Loiu income Single Parents in N.H.
Lo-director, Parents for Justice
Tne Sub-Lommittee on Select Revenue Ueasures
Committee on lUays and Dfleans, U.S. House of Representatives
Selected Aspects of lUelfare Reform
I mill address myself to tiuo of the issues identified by the committee,
the expansion of the EITC to lift families luith one full time luorker earning
minimum uiage above the poverty line; and the interaction of the EITC uiith
other Federal programs and policies uihich effect the disposable income of
loup-income workers and their incentives to uiork, especially the AFDC
Expanding the EITC and Economic Realities in N.H. r The Presidenfs proposal
that the Earned income tax credit be expanded so that, combined luith the
income from a minimum luage job, it brings a family uiith one full-time luorker
above the Federal poverty line, is of course most u/elcofne to us. Since the
average single parent family in N.H. contains three people, tiuo children
and a mother, and the income of a minimum luage job, approximately $770 a
month, is about $200 a month short of the poverty line for a family of that
size, a rough doubling of the basic maximum LIC credit from the current
11584 per year to 524U0 per year mould suffice to accomplish that goal, if
the credit u/ere also properly indexed to reflect the higher poverty line
levels for larger families, unfortunately, luhile this mould certainly help,
it mould still leave us u/ith serious problems of single parent poverty in
N.H.^, if poverty is measured on a real scale rather than the official one.
Ule do have minimum luage jobs in N.H., but they are rarely held, for very
long, by single parents because the uiage is grossly inadequate to support
children. They are primarily held by teenagers and other single persons
u)ho live in supportive situations, especially the handicapped, Ulhat is
available, and filled by luorking class single parents in N.H., is a uiide
variety of jobs uihich pay $6.50 an hour, or 1,118 a month, $13,416 a year,
someiuhat above the poverty line, but also luidely recognized as inadequate to
meet the fundamental needs of a N.H. family. One member of my Goard uho is
a high school educated morking parent finds she has to uork 60 hours a lueek
at this u/age to meet the minimal needs of her family of tiuo daughters, 10
and 17, grossing $1,677 a month. Her experience reflects quite accurately
the findings of the state legislature's Committee for SB 153 , uihich concluded
in 1991, on the basis of the study of minimal family budgets uhich they
â– commissioned, that a family of three uiith onefull-time uiorking parent and
no child care expenses at all luould have to gross approximately$1743 a
month, if it uiere not to go without some essential item.
In fact, at $1577 a month, this family does go uithout something the study
considers essential, health insurance for the children. She buys, through
her employer, a partially subsidized policy for herself 'uihich costs her $40
a month. This is essential to her, because, at fifty^ her health is increasingly
uncertain. Houiever it does not make sense to go short on food, car rEjoairs.
heating oil, or the "lortgage payment to buy the same coverage for her daughters,
especially since the $40 is needed to pay for medical services not covered
under the deductible provisions of the policy. And, at this level of income,
the family is still unstable, primarily because of the long hours she must
put in. She does not feel that her body will be able to sustain a 7:30 AIII
to 7:30 Prn five day a uieek schedule indefinitely in a job that entails"
constiderable heavy lifting (she takes aare of people incapacitated by
retardation or disease). There is not enough recuperation time. She
privately predicts to me that the family uiil'. be back on AFOC sometime next
It is evident that if the goal of the president's family policy is to make
sure that families uiith one parent uiorking full time do not live in poverty
in the real meaning of that uiord, the EIL uiould have to be much higher thart
82400 a year. Forty hours a meek at $fa.5U an hour grosses JlliB a month.
The N.H. minimal budget figure for a family of three, adjusted for the t%
inflation uie haue experienced since the budgets luere compiltd in 1990, is
$1847 a month,, more than tVOO hioher. A realistic LIC uihich uias designed to
make sure that single parents raising children in N.H. mere not living in real
pouerty or forced into unsustainable u/ork schedules, mould need to top out
at something like JU400 a year, not J24D0, and be applied thro .gh a spectrum
of incomes luhich centered at about $13,416 a year (the yearly income of a
$b.50/hr uiorker). At the very least, an EIC maximum of $2400 should be
applied fully to incomes up to Ji9V64 for a family of three (the yearly gross
of a family making $1047 a month, les: $2,400), and adjusted upiuard in families
where there are more than tiuo children.
It should be noted that if national health insurance is established, these cost
can be reduced significantly. The N.H. study budgets included approximately
$200 a month for medical care. Ihe subtraction. of this figure reduces the
gap betiueen a b.50/hr earners monthly income and monthly minimal family
budget to $500 a month, and the optimal EIC to 56000/year. It shoula also
DB noted that the figures I am uiorking luith abouc do not contain any money
for child cars luhatsoeuer. The minimal family budgets in the N.H. study
contain an extra $130 a month Tor families iiiith children young onouah to
require after scltool care, and approximately $035 a month tor a family of
three luith tiuo perschool children requiring full time care. In as far as
child care is not subsidized (ana in im.H. lue subsidize it heawiiy), a realistic
EIL mould haue to becorrespondinply higher. in fact, the costs of properly
subsidizing a mother uiith pre-school children so she can afford to hold ooiun
a $t).bO an hour job are staggering; a $7U0 a month income subsidy plus a
$bj5 a month child care subsidyis $i:i5u a month, or more than she can make.
Possibly itis time to take an unbiased look at the value of her luork as a
child rearer during her children's pre-school years to us and our society,
and try to make the AFUC system u/ork for her instead, uje could accomplish''
this by combining uiork and luelrare for mothers uiith pre-school children, rather
than attempting to push them touiards an iliusiory and unobtainable self-
Ihe Incentive to u/ork and fl^ PL Program tarned In come Disregards:
One of the most serious disincentives to workiog outside the home
which faces the low income sinBle parent population we represent
is the treatment of earned income by the AFDC
program. As you are undoubtedly aware, four months after a mother
raising very young children on AFDC takes on a part-time job, all but
$30 of her earnings, over and above a $90 "work expense disallow"
designed to cover her payroll deduct ions , are deducted from her grant,
and at the end of a year, even this $30 take-home is no longer
permitted. In addition, if the father of her child is paying the
AFDC agency child support, the young mother wishing to increase
her childrens" prosperity by taking on a part-time job encounters
a very complicated and tricky situation indeed. If his payments are
reasonably high, $400 or $500 a month, earning as little as $25/raonth
gross may be enough* when added to to his support payment, to disqualify
her from AFDC altogether . Immediately she loses access to JOBS
benefits and with them her capacity to continue her education or
to train for a more skilled occupation, to Emergency Assistance, and
shortly enough thereafter, her families medical insurance. She will
be receiving her child support directly, but her family will be
worse of f .
The N.H. AFDC grant is $516 a month for a family of three, fairly high-
end as grants go in this nation, but severly inadequate to meet
even the most minimal needs of a family in this rural northern state
where home heating oil and a function ins vehicle are both necessities,
and in which the saga of Soabrook has saddled us with one of the
highest utility rates in the country. At this level of income, famil ies
are subjected to deprivations which are both dangerous and cripplir>g,
as I detailed in testimony submitted to the Human Resources Committee on 3/26/93
on the subject of "Trends in Spending and ' Casel oads f or AFDC". The
deprivations are of a nature to severly handicapp tne attempts of the
AFDC caseheads to enter education and job training programs when their
youngest child reaches three, or subsequently to move into the work
force. The capacity to do both these things in N.H. depends upon
a certain minimal level of health in the mother and the child (N.H.
employers do not have much patience with employees who need to take
frequent days off to care for a sick child), and the financial
ability to maintain a working car. The mothers I have talked to
this year haven't even been able to buy soap after they paid the
rent and begged the utility payment from town welfare.
I talked to many AFDC parents this year about the possibility of
working part-time jobs, because I needed to search out individuals
who would testify in favor of an AFDC work incentive bill which is
progressing through the state legislature this rpring. Even though
they were often the mothers of very young children indeed, they were
universally enthusiastic about the prospect. The Division of Ifuman
Services, however, does not encourage them to utilize the current
earned income disregard structure, partly at least, because
sympathetic administrators are worried about what will happen to the
families whose child support awards put them very close to the
edge of being knocked off of AFDC altogether. They want these
families to have the benefits of the JOBS program.
Local District Welfare Offices line personnel seem to be ignorant of
The dlsieqards' existence, and in a number of cases which have reached
me and other advocates, earned income disregarda have been improperly
applied or not applied at all. One of the mothers I spoke with
reported that she had called up her local district office to find out
if she could take a small job in order to provide her infant with
diapers and extra formular. (At four -nonths, he was exceeding her
capacity to supply him his bot 1 1 e . f roia food stamps. and her WIG
assistance.) She was refered to the office supervisor , who told her
she couldn't; they would simply take any extra money she made out
of her grant .
In practice, that is not stricly true, even under the current
income d is regard structure . By carefully choosing forms of work that
do not evoKe payroll deductions, like caring for children in ones home,
cleaning other mother's homes, or fleamarketeering, it is posible to
add the best part of $120 (for one year) or $90 (indefinitely) to ones
disposable income. However, none of these occupations provide
particularly promising career tracks. If the earned income disregards
mere increased to make it possiDle tor an AfuC parent engaged part *;ime in
a mainstream Job to add take-home income to niir grant even after payroll
deductions, than these young luomen could acguire job experience and contacts
while their cniidren uere uery young, luhich mould enable them to command
higher paying ana more promising full-time jobs later on. And, acting on
their oujn initiative, uiithout raguiring further aid from local or state
taxpayers, they mould be able to add that margin to their family income which
mill enable them to buy soap and laundry detergent to mash the diapers in,
prouide food at the end of the month after the food stamps hove run out, and
possibly even keep the car running. This is important not only to the parent, but
to us, because me need hej to be able to deliuer a healthy child to first
grade, and me need her to be in sufficient good health and sufficiently mobile
to be able to profit from the Job training opportunities available in N.H. ,
and to succeed in the mork force at that point in her family's deuelopment.
In N. H. , me have a' broadly supported bill requiring the state to follom the
example of three other states in the nation and petetion the federal Department
of Health and Human Service to grant a maiuer permitting us to replace the
temporary J3Q and 1/3 earned income disregard mith a permanent $200 disregard
plus 50> of all earnings above that level until the client has morked herself
andher family off of AFDL, It has passed the N.H. Senate, beco- recommended
by its House poliicy committee unanimously, approved mithout debate by the
full House, and only amaits a funding decision from the House Appropriations
Committee to complete its journey through the legislative gauntlet successfully.
It has been unusual among AFOC bills in that it has mon strong support from
conservatives in the legislature as mell as liberals.
One of the reasons it has qarnered conservative suooort is that the bill specifies
that the extra disregard shall not only apply to the earned income of parents
on the AFDC program, but to applicants as mell. This means that me could
supply a mother struggling to support children on the 36.50 an hour Jot^ mith
a medicaid card for herself and for any children she may have older than nine
(the age at mhich the N.H. medicaid program for poor children living at 13b^
of poverty cuts off), and me could help stabilize the family of the mother
mho can not earn more than minimum mage or can only mork part time, mith
a small grant as mell. Such families, caught, like my marking board member
beiuueen . the tuiin horns of overwork or inadequate income, or sometimes an
Doth, are usry vulnerable to AFOL recidivism. Ihe N.H. Office of Economic
Services, which administers the AF DL program here, feels that it is less
expensive over the long haulto try to stabilize them with a continuous low
level supp.^ than to pay for lengthy periods of r pr^' - o dependency
punctuated by intemittent, marginally successful, atcempcs at total self-
sufficiency. There is also the broader issue of fairness. It has been a
source of great frustratiun and anger to conservative state legislators
that it has been impossible for them to leverage any state help whatsoever
for hardworking single parents in their district who are struggling virtuously
to support their children alone, without state help, and are going under
because they can't get medical attention for themselves or their children,
or emergency assistancn to prevent eviction because they have had to use the
rent money to put a new engine in the car so they can keep getting to their
Job. Under the proposed plan, which i''hope the federal agency will approve,
the woman who is doing it the hard way can get this help, if she applies for
it, via the Af DL program, â€¢ -. '
nee ommen da t i on s ; Any increase in the Earned Income Lredit will be an important
contribution to the health and stability uf low wage earning , working, single
parent families in N.H. However, 1 hope you will not use as vour sole
guideline and goal the official federal poverty guidelines. Ihese figures may
be comforting, because they are low enough to be attainable. However, if
your goal is a true alleviation of the poverty of America's children and
helping their mothers to provide them with the necessities of life, and not