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S. Hrg. 104-567



REINVENTING GOVERNMENT



Y 4. G 74/9: S. HRG. 104-567



Reinventinf Governnenti S.Hr§. 10A-.



[BARINGS

BEFORE THE

COMMITTEE ON

GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

ONE HUNDRED FOURTH CONGRESS

FIRST SESSION



JANUARY 25, 1995
WELFARE REFORM



FEBRUARY 2, 1995
INFORMATION SYSTEMS IN THE FEDERAL GOVERNMENT



Printed for the use of the Committee on Governmental Affairs




^''3om



S. Hrg. 104-567

RHNVENTING GOVERNMENT



HEARINGS

BEFORE THE

COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE

ONE HUNDRED FOURTH CONGRESS

FIRST SESSION



JANUARY 25, 1995
WELFARE REFORM



FEBRUARY 2, 1995
INFORMATION SYSTEMS IN THE FEDERAL GOVERNMENT



Printed for the use of the Committee on Governmental Affairs




U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1996



For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-053505-0



COMMITTEE ON GOVERNMENTAL AFFAIRS

WILLIAM V. ROTH, Jr., Delaware, Chairman
TED STEVENS, Alaska JOHN GLENN, Ohio

WILLIAM S. COHEN, Maine SAM NUNN, Georgia

FRED THOMPSON, Tennessee CARL LEVIN, Michigan

THAD COCHRAN, Mississippi DAVID PRYOR, Arkansas

CHARLES E. GRASSLEY, Iowa JOSEPH I. LIEBERMAN, Connecticut

JOHN McCain, Arizona DANIEL K. AKAKA, Hawaii

BOB SMITH, New Hampshire BYRON L. DORGAN, North Dakota

Franklin G. Polk, Staff Director and Chief Counsel
Mark A Forman, Professional Staff
JoAnne Bamhart, Professional Staff
Leonard Weiss, Minority Staff Director
Michal Sue Prosser, Chief Clerk

(ID



CONTENTS



Opening statements: Page

Senator Roth 1, 95

Senator Glenn 4, 97

Senator Cohen 5, 93

Senator Thompson 9

Senator Pryor 10

Senator Lieberman 11

Senator Dorgan 12

Senator Cochran 23

Senator Levin 31

Senator Grassley 35

WITNESSES

Wednesday, January 25, 1995

Jane L. Ross, Director, Income Security Issues; Health, Education, and
Human Services Division; U.S. General Accounting Office; accompanied
by Cynthia Fagnoni 16

Hon. Carroll Campbell, former Governor, South Carolina 37

Jane Campbell, Assistant Minority Leader, Ohio House of Representatives,

and President, National Conference of State Legislatures 49

Mary Jo Bane, Assistant Secretary for Children and Families, U.S. Depart-
ment of Health and Human Services 56

William Ludwig, Administrator, Food and Consumer Services, U.S. Depart-
ment of Agriculture 58

Michael A. Stegman, Assistant Secretary, Policy Development and Research,
U.S. Department of Housing and Urban Development 60

Robert Rector, The Heritage Foundation 69

Mark Greenberg, Center for Law and Social Policy 74

Judith M. Gueron, President, Manpower Demonstration Research Corpora-
tion 80

Lawrence M. Mead, Ph.D., Princeton University 82

Thursday, February 2, 1995

Charles A. Bowsher, Comptroller General of the United States, U.S. General
Accounting Office, accompanied by Gene L. Dodaro, Assistant Comptroller
General, Accounting and Information Division, and Christopher W. Hoenig,
Director, Information Policies and Issues Group 101

George Newstrom, Corporate Vice President, EDS Corporation 117

Cynthia Kendall, Deputy Assistant Secretary of Defense for Information Man-
agement, Department of Defense 122

Gary Kavanagh, Deputy Director, Bureau of Program Operations, Health
Care Financing Administration, U.S. Department of Health and Human
Services, accompanied by Dr. Aron Primack, Medical Officer, Bureau of
Program Operations, Health Care Financing Administration, U.S. Depart-
ment of Health and Human Services 124

(III)



IV

Page

Alphabetical List of Witnesses

Bane, Mary Jo:

Testimony 56

Prepared statement 162

Bowsher, Charles A.:

Testimony 101

Prepared statement 299

Campbell, Hon. Carroll:

Testimony 37

Prepared statement 147

Campbell, Hon. Jane:

Testimony 49

Prepared statement 151

Greenberg, Mark:

Testimony 74

Prepared statement 207

Gueron, Judith M.:

Testimony 80

Prepared statement 218

Kavanagh, Gary:

Testimony 124

Prepared statement 372

Kendall, Cynthia:

Testimony 122

Prepared statement 359

Ludwig, William:

Testimony 58

Prepared statement 172

Mead, Lawrence M.:

Testimony 82

Prepared statement 234

Newstrom, George:

Testimony 117

Prepared statement 348

Rector, Robert:

Testimony 69

Prepared statement 189

Ross, Jane L.:

Testimony 16

Prepared statement 133

Stegman, Michael A.:

Testimony 60

Prepared statement 180

APPENDIX
Prepared statements of witnesses in order of appearance 133

GAO letter dated June 28, 1995 prepared in response to Senator Roth's
April 13, 1995 request and subsequent staff discussions from Jane L. Ross .. 245

GAO's February 7, 1995 testimony on Means-Tested Programs, An Overview,
Problems, and Issues, by Jane L. Ross, before the Subcommittee on Depart-
ment Operations, Nutrition and Foreign Agriculture, Committee on Agri-
culture, House of Representatives 266

GAO responses to questions from Senator Glenn for Mr. Bowsher 338

Article dated Tuesday, September 20, 1994 from the New York Times entitled
"Teenage Mothers Helped by Ohio Plan, Study Finds" 381

Executive Summary from GAO on Child Support Enforcement 382



REINVENTING GOVERNMENT
WELFARE REFORM



WEDNESDAY, JANUARY 25, 1995

U.S. Senate,
Committee on Governmental Affairs,

Washington, DC.
The Committee met, pursuant to notice, at 9:32 a.m., in room
SD-342, Dirksen Senate Office Building, Hon. William V. Roth, Jr.,
Chairman of the Committee, presiding.

Members Present: Senators Roth, Cohen, Thompson Cochran,
Grassley, Glenn, Levin, Pryor, Lieberman, and Dorgan.

OPENING STATEMENT OF CHAIRMAN ROTH, JR.

Chairman Roth. The Committee will please be in order. We will
follow the early-bird rule of calling on Members as they first ap-
pear.

Good morning. I do want to thank all of you for being here this
morning as our Committee begins the first in a series of hearings
on increasing the efficiency of the Executive Branch of Government
and improving the effectiveness of Government programs.

The purpose of our hearings is to dig behind the surface, break
through the crust and mantle, so to speak, and get to the core of
what reinventing Government really entails.

Last night in the State of the Union address, President Clinton
spent a substantial amount of time addressing the elimination of
yesterday's Government in order to meet tomorrow's needs. And it
is my sincere hope that his statement means that we can expect
the Administration to work with Congress and apply that principle
to our welfare system.

I firmly believe that the election results last November made it
clear that the people of this country feel Government has grown too
large, too centralized and too dictatorial, to maintain functions that
are no longer relevant in today's world. That sentiment could not
be more clear than in the Americans' public view of welfare pro-
grams. And fi-ankly, taking a look at the current state of affairs in
welfare is a concern that is well-grounded.

Typically when we talk about welfare, we are really only talking
about the Aid to Families with Dependent Children program with
an annual Federal expenditure over $13 billion. In fact, the AFDC
is just one of a vast array of Federal and State programs providing
assistance to millions and costing billions each year. The actual
Federal expenditure on all public assistance programs is estimated
to be over $200 billion, and the total cost of the Big Four of AFDC,

(1)



food stamps, Medicaid, housing assistance nets over $130 billion a
year.

Fifteen years ago, I asked the GAO to conduct a study on the full
scope of assistance availability to low-income individuals and fami-
lies through both State and Federal programs and to identify the
average aggregate benefit payments.

Well, that study jrielded some interesting and enlightening find-
ings. Prime among them was the complexity of what I considered
a rather straightforward and reasonable request. Within the con-
fines of limited availability of data and a number of caveats, GAO
was able to calculate what they call a monthly median income. We
will hear more about the complexities and caveats from the GAO
witness who is testifying this morning.

In 1986, given the growth of Federal entitlement expenditures,
I asked GAO to update the 1979 calculations. This past year, given
the increase in interest and push for welfare reform, I once again
asked GAO to update the calculations.

Their most recent findings report a median monthly income of
$767. I believe GAO's work in this area is important to the welfare
reform debate for a number of reasons.

First, as we approach welfare reform this session, it is critical
that we understand exactly what programs we are including and
should include in the reform effort.

Second, we must have a clear understanding of the cost of serv-
ices provided by the system currently in existence.

And finally, given the amount of money we are spending and the
number and variety of public assistance programs, why are we not
getting better results?

The GAO report makes it clear to me that the failure of the cur-
rent welfare system is not a lack of Federal money, but rather the
structure of the system itself.

It is further my belief that the best way to determine the course
we should follow in welfare reform is to find the success stories, the
diamonds-in-the-rough that are yielding the kind of results we
want. In so doing, we can restructure the system and create the
kind of environment that will encourage and promote the kinds of
programs that lead to the kind of positive results we seek and de-
sire.

Such an examination should include discussion of the full range
of possibilities, everything from giving States more flexibility to ex-
perimenting with block-granting programs. It should also include
taking a closer look at the viability of multi-department adminis-
trations of an array of programs targeted at the same population.
It should include a discussion of the principles and goals that
should drive the welfare system.

As one Senator who has long supported a strong work component
in welfare, I am pleased that there now seems to be a consensus
that the success of the welfare system should be judged by how
many people leave welfare for gainful employment. Therefore it is
essential that we find out why some welfare work programs do, in
fact, work; what are the necessary elements that must be present
in order to make further gains; and what has experience taught us
about the pitfalls that we should take care to avoid.



I am extremely pleased that we have so many knowledgeable
witnesses with us today, who offer different perspectives on the
questions I have raised.

[The prepared statement of Senator Roth, Jr. follows:]

PREPARED STATEMENT OF SENATOR ROTH, JR.

Roth Examines Structure of Welfare System

WASHINGTON — The following is the opening statement of Governmental Affairs
Committee Chairman William V. Roth, Jr. at the Committee's hearing on restruc-
turing the welfare system:

Good morning and thank you all for being here this morning as this Committee
begins the first in a series of hearings on increasing the efficiency of the Executive
Branch of Government and improving the effectiveness of Government programs.
The purpose of these hearings is to dig beneath the surface, break through the crust
and mantle, so to speak, and get to the core of what reinventing government really
entails.

Last night, in the State of the Union address, President Clinton spent a substan-
tial amount of time talking about "getting rid of yesterday's government to meet to-
morrow's needs." It is my sincere hope that his statements mean we can expect the
Administration to work with Congress to apply that principle to our welfare system.

I firmly believe that the election results last November made clear that the people
of this country feel government has grown too large, too centralized, too dictatorial
and has maintained functions that are no longer relevant to the world today. No
place is that sentiment more clear than in the area of the American public's view
of welfare programs. And frankly, taking a look at the current state of affairs in
welfare, it is a concern that is well grounded.

Typically, when we talk about "welfare," we are really only talking about the Aid
to Families with Dependent Children program with an annual Federal expenditure
of over $13 billion. In fact, the AFDC program is just one of a vast array of Federal
and State programs providing assistance to millions and costing billions each year.
The actual Federal expenditure on all public assistance programs is estimated to be
over $200 billion. Totalling up the "big four" of AFDC, Food Stamps, Medicaid and
housing assistance nets a total of over $130 billion a year.

Fifteen years ago, I asked the General Accounting Office to conduct a study of the
full scope of assistance available to low income individuals and families through
both State and Federal programs, and to identify the average aggregate benefit pay-
ments. That study yielded some interesting and enlightening findings. Prime among
them was the complexity of what I considered a rather straightforward and reason-
able request. Within the confines of limited availability of data and a number of ca-
veats, GAO was able to calculate a "monthly median income." We will hear more
about the complexities and caveats from the GAO witness who is testifying this
morning.

In 1986, given the growth of Federal entitlement expenditures, I asked GAO to
update the 1979 calculations. This past year, given the increasing interest and push
for welfare reform, I once again asked GAO to up-date the calculations. Their most
recent findings report a "median monthly income" of $767.

I believe GAO's work in this area is important to the welfare reform debate for
a number of reasons. First, as we approach welfare reform this session, it is critical
that we understand exactly what programs we are including and should include in
the reform effort. Second, we must have a clear understanding of the cost of and
services provided by the system currently in existence. And finally, given the
amount of money we are spending and the number and variety of public assistance
programs, why aren't we getting better results?

The GAO report makes it clear to me that the failure of the current welfare sys-
tem is not a lack of Federal money but rather the structure of the system itself
It is further my belief that the best way to determine the course we should follow
in welfare reform is to find out the success stories — the diamonds in the rough —
that are yielding the kind of results we want. In so doing, we can restructure the
system to create the kind of environment that will encourage and promote the kinds
of programs that lead to the kind of positive results we seek and desire.

Such an examination should include discussion of the full range of possibilities —
everything from giving States more flexibility to experiment to block granting pro-
grams that are now largely dictated from the Federal level. It should include taking
a closer look at the viability of multi-department administration of an array of pro-



grams targeted at the same population. It should include a discussion of the prin-
ciples and goals that should drive the welfare system.

As one Senator who has long supported a strong work component in welfare, I
am pleased that there now seems to be a consensus that the success of the welfare
system should be judged by how many people leave welfare for gainful employment.
Therefore, it is essential that we find out why some welfare work programs do, in
fact, work. What are the necessary elements that must be present in order to make
further gains and what has experience taught us about the pitfalls that we should
take care to avoid.

I am well aware that the approach I have laid out here is not as glitzy or catchy
as some of the approaches currently being put forth. Rather, it is an approach that
takes very seriously the charge of this Committee to engage in oversight of the effi-
ciency and effectiveness of the Federal Government. It is, in my opinion, quite sim-
ply, the stuff that success, progress and reforms are made of.

I am extremely pleased we have so many knowledgeable witnesses with us today
who offer different perspectives on the questions I have raised.

Senator Roth. Senator Glenn.

OPENING STATEMENT SENATOR GLENN

Senator Glenn. Thank you very much, Mr. Chairman.

I want to congratulate you. I think it is excellent that we are
having this hearing. It is an informational hearing. We are not tak-
ing up specific pieces of legislation. We know that welfare reform
is going to be high on the agenda of the Congress and of the Amer-
ican people this year.

And I think it is excellent that we are scheduling this hearing
to get as much background information, and have as many expert
witnesses, as we possibly can have. And I appreciate all of the peo-
ple who have made an effort to be here this morning and share
their expertise with us to examine ways in which the Federal Gov-
ernment's welfare programs might be streamlined into a more
workable, common-sense, and cost-effective system.

The underlying principle of our Nation's welfare system must be
to provide effective assistance to those most in need. We want a
safety net for America's families £uid children where assistance pro-
grams provide a hfeline when a parent loses a job or a senior citi-
zen needs a small pension supplement; in other words, address the
specific needs of the people and have programs that are flexible
enough to do that.

What we do not want is a welfare system that is fi-agmented,
burdensome, overlapping, and undermines work and parental re-
sponsibilities. We want a system that provides the tools and incen-
tives for welfare recipients to move to economic independence.

Mr. Chairman, I am p£irticularly pleased to see an Ohio witness
at today's hearing. While Ms. Jane Campbell is here to testify as
President of the National Conference of State Legislatures, she is
also a very recognized figure in the State of Ohio where she serves
as the Deputy Minority Leader in the Ohio House of Representa-
tives. So 1 certainly look forward to her testimony.

Let me say one other word about Ohio. There is a unique pro-
gram in Cleveland. It is called 'Tieaming, Earning, and Parenting."
The acronym for it is LEAP — "Learning, Earning, and Parenting."

Its central goal is to entice teenage welfare mothers to complete
their high school degree or receive an equivalency diploma. The
idea is that this education can help these young women move off
welfare and into the job market.



LEAP provides child care, if these mothers regularly attend
school and a monthly bonus then of $62. Failure to attend school
means that their welfare checks are docked $62 a month. In other
words, under LEAP monthly checks vary from $212 with penalty
to $336 with the bonus.

I mention this program because it shows promise in giving and
getting people the tools they need to help themselves.

There was an article about this program in last September 20's
edition of The New York Times called "Teenage Mothers Helped by
Ohio Plan, Study Finds," and it says: A carrot-and-stick approach
is pushing more young women to finish high school.

And it is being closely watched, and it seems to be having very,
very good r^isults, and I would ask unanimous consent that I be
able to place this in the record, Mr. Chairman, at the end of my
statement. 1

Chairman ROTH. Without objection.

Senator GLENN. Mr. Chairman, I will not be able to be here for
all of the hearing today. We still have the unfunded mandate legis-
lation on the floor, managing that over there, and so I will have
to leave shortly to go over there. But I will be back as much as I
can during the hearing, and I want to congratulate you again for
holding it. I think it is good that we are getting on top of this and
getting as much background early in this year as we possibly can.

Thank you.

Chairman Roth. Thank you. Senator Glenn. Senator Cohen.

OPENING STATEMENT OF SENATOR COHEN

Senator COHEN. Thank you, Mr. Chairman. I have a formal
statement I would like to enter into the record and perhaps just
simimarize some of the key points.

Chairman ROTH. Without objection.

Senator COHEN. I think it is clear that this is to be the first of,
I would assume, a series of hearings with the subject of welfare re-
form, and I think that all of us are going to be bombarded with
theories and strategies — and I suspect even theologies about the
subject matter.

I would hope that we would approach this with a good deal of
humility.

Professor James Q. Wilson of UCLA, a critic of the current sys-
tem, indicated: We are not in a position to be able to predict the
consequences of any of our solutions; we do not know what the con-
sequences will be of any of our proposals, and we should admit that
in the beginning.

Second, I think it is clear also that any attempt at reform is
going to be attacked as either being mean-spirited, callous, or in
some cases even racist. Notwithstanding the attacks that will be
leveled, we need to continue investigation of ways in which we can
make a more constructive proposal for our citizens.

I think all of us have become familiar with the expression that
was created by one writer several years ago, writing in The Na-
tional Journal in which the author talked about "demosclerosis,"
that our democratic system — the arteries of our democratic system



iThe article appears in the Appendix on page 381.



have become so clogged with special interests that would fight to
protect the permanence of the programs, even though those pro-
grams may have become completely outmoded and inefficient and
wastefiil.

A book was written some years ago that has remained on my
bookshelf, written by John Gardner. It was called The Recovery of
Confidence. I think it was written back in 1968. And in that book,
Gardner said: "Our institutions have become caught in a savage
crossfire between uncritical lovers and unloving critics, that at one
end of the spectrum we had the people who were so enamored with
the status-quo they would do everything they could to blunt and
nullify and stultify any attempt to change, and at the other end of
the spectrum were those unloving critics, people who saw abso-
lutely no virtue or benefit in present programs and had nothing in
the way of constructive proposEds to announce, but simply wanted
to tear down what currently existed."

And so I think one of our struggles has to be to try to strike the
balance between the need to reform and the need to retain. And
that is the spirit in which I hope we will pursue this hearing and
the ones that will follow.

I also think we have to restore the virtue and the dignity that
we once associated with work. I see a lot of young faces in the audi-
ence today. It is unusual to see this many young people attend the
hearings of the Government Affairs Committee, and it is a welcome
sight indeed.

Back in 1975, for those of you who were not perhaps even born
at that time, I was sitting on a hearing in the House of Representa-
tives. It was being chaired by Claude Pepper at that time; it was
the Committee on Aging. We had a witness who came before the
Committee; his n£une was Will Geer and he played Grandpa Wal-
ton on a then popular television series. And what he was fighting
for at that time was a removal of the restriction that we placed on
people who had turned 65; they automatically were forced into re-
tirement.

And I will never forget the sight of Grandpa Walton at that
table. And he said very passionately: "A person has to have a po-
dium to pound on; if you take that podium away, you take away
that person's zest for life and reason for living. So please do not
force us into retirement; let us work."

And as a result of that and other testimony, we indeed changed
the law, because people saw the dignity, the vitality, associated
with work.

On a more personal level, let me say I turned to my own family.
I have talked about it on many occasions on this Committee and
elsewhere.

My father recently turned 86. He continues to work 18 hours a
day, 6 days a week, along with my mother who is in her — I will
be kind — in her 70's, who works with him. And they are revered
in my hometown, not only because of the product which they
produce with their hands, but because even in sub-zero weather



Online LibraryUnited States. Congress. Senate. Committee on GoveReinventing government : hearings before the Committee on Governmental Affairs, United States Senate, One Hundred Fourth Congress, first session, January 25, 1995, welfare reform, February 2, 1995, information systems in the federal government (Volume 1) → online text (page 1 of 39)