April 24, 1979
Page 8392
Mr. TALMADGE. I thank my distinguished friend from Maine, the floor manager of the bill. I would ask the distinguished floor manager a series of questions regarding the WIN program.
I read in the Senate report on the first concurrent resolution on the budget that the committee is recommending that the work incentive program be phased out over a 2-year period by reducing the amount from $400 million to $200 million in fiscal year 1980; from $400 million to $100 million in fiscal year 1981; and from $400 million in fiscal year 1982 to zero. Is that correct?
Mr. MUSKIE. The Senator is correct.
Mr. TALMADGE. I was somewhat amazed at the committee action in this regard, because the program is strongly supported by the President of the United States, the Department of Labor, and the Secretary of HEW, and its cost effectiveness is about $2 saved for the taxpayers for every $1 we spend in this regard. It is one of the few welfare reform proposals that Congress has agreed to. It has placed thousands and thousands of people in productive jobs. to take them off the welfare rolls.
My second question: It is my understanding that the WIN phase out proposal was approved by the Senate Budget Committee by a vote of 10 to 7 and that the Senator from Maine is recorded as voting in the negative on that proposal. Is that correct?
Mr. MUSKIE. The Senator is correct.
Mr. President, I ask unanimous consent to have printed in the RECORD at this point an interoffice memorandum from the Maine government, which supports the work incentive program and gives a summary of its record. It was on that basis that I opposed the motion.
Mr. TALMADGE. I thank the Senator for incorporating that in the RECORD.
There being no objection, the memorandum was ordered to be printed in the RECORD, as follows:
MAINE DEPARTMENT OF MANPOWER AFFAIRS
INTER-OFFICE MEMORANDUM
Date March 30, 1979.
To David W. Bustin, Commissioner.
Office Commission.
From William R. Malloy, Director.
Office Job Service Division.
Subject Work Incentive (WIN) Program in Maine.
The WIN Program in Maine is comprised of seven offices and is designed to operate with a staff of seventy (70) persons. During Fiscal Year 1978, our staffing level reached a low of fifty-one (51) persons. In spite of this severe handicap, we achieved the following results:
[Table omitted]
The U.S. WIN Program has developed into an effective program in dealing with AFDC welfare recipients both in providing a service to these clients and in cost effectiveness as illustrated by the above figures. The Maine WIN Program also enjoys this success and compares favorably with the national data.
Mr. TALMADGE. Did not the President, in his fiscal year 1980 budget message to Congress, request approval of the $400 million for the WIN program?
Mr. MUSKIE. The Senator is correct.
Mr. TALMADGE. It is my further understanding that the House Budget Committee concurred with the amount requested by the President. Is that not correct?
Mr. MUSKIE. That is my understanding.
Mr. TALMADGE. Will the Senator yield further?
Mr. MUSKIE. Yes.
Mr. TALMADGE. Am I correct in my interpretation of the budget that the only spending items which are binding are the overall budget authority and the overall outlays?
Mr. MUSKIE. The Senator is correct. The purpose of giving the Senate the benefit of the assumptions which make up those totals is to apprise the Senate of the feeling of the Budget Committee on the various items covered by the function of totals to the extent that they were discussed. But, of course once the budget is approved, then the functions are filled out by the Appropriations Committee pursuant to the crosswalk procedures. If the Appropriations Committee should approve a different order of priorities, then the Budget Committee assumes that that is its prerogative and it is the prerogative of the Senate, then, to act upon those.
Mr. TALMADGE. I think the Senator has answered the next question, but I should like to state it to clarify it for the record.
Is it not also true that funds can be used from any function for any other function so long as the funds so used are not in excess of the overall budget authority and overall outlays?
Mr. MUSKIE. Well, insofar as the point of order procedure for disciplining the budget, that is true, but I think that would be violative of the spirit of the Budget Act, and I should not like to encourage it. The Senate Budget Committee can, of course, in the second budget resolution, take cognizance of any changes that will produce that result and seek to reflect it in the second concurrent resolution. I would urge that course of action rather than the procedure suggested by the Senator's question after the second budget resolution becomes law.
Mr. TALMADGE. If the Senator will yield for a brief comment, as I stated at the outset, and the distinguished Senator yielded for this colloquy, I was somewhat amazed and surprised to know that the Budget Committee took this action by a vote of 10 to 7.
I am strongly in favor of balancing the budget as any Member of this Senate. I am as strongly supportive of that effort to reduce expenditures as anyone I know. But this program is highly cost effective. Every time we spend $1 on this program, it saves the taxpayers of this country about $2. That has been testified to by executive officers of the Government and researched diligently by our staff.
When we get someone off the welfare rolls, for instance, it not only saves the welfare payment, but it saves the Government the cost of food stamps; it saves the Government the cost of medicaid, and all of those other benefits.
We have put countless thousands of people into productive jobs with this work incentive program since 1972.
It is strongly supported by everyone who has kept up with what its function is and what it has done.
I saw some statistics for the year 1977. We took some 280,000 off the welfare rolls in that year and made useful, productive taxpaying citizens out of them.
Mr. President, what the Senate Budget Committee has done in relation to the work incentive (WIN) program is a greatly misguided act. It is unbelievable that in an attempt to produce a lean, austere budget recommendation that the Senate Budget Committee would propose phasing out a program which is not only cost effective but which also reduces or eliminates dependency of both applicants and recipients on the aid to families with dependent children program.
The WIN program accomplishes this in a manner which benefits the welfare family, the taxpayer, and the country — by placing the AFDC recipient in private sector employment. I wish to emphasize, Mr. President, the only way to reduce dependency is by non-subsidized employment, not by putting people in make-work jobs. Certainly public service employment may reduce the AFDC rolls somewhat but it does not reduce dependency on the Government and is more costly to the taxpayer. It is fallacious to argue that public service employment reduces dependency unless such public service employment is permanent and productive and not merely a temporary job. We are all aware of the problems uncovered in the CETA program.
Mr. President, I believe all employable persons not only have the right but also the moral obligation to work and be productive, including welfare recipients. In this regard, the work incentive (WIN) program, as modified in 1971, has proven very successful. These changes, which I had proposed, emphasize placement in private sector employment. Previously, the program had been designed for training for jobs most of which turned out to be nonexistent and resulted in discouragement and frustration on the part of the trainee.
The WIN program helps welfare recipients find jobs, and keep them. It encourages, through the use of tax credits, private businesses to hire welfare recipients, which saves taxpayers money.
In fiscal year 1973, the first full year of WIN II, 34,300 families in which a family member was a WIN participant went off welfare and an additional 31,000 families received a reduced AFDC grant. This was possible because of the salaries earned by WIN participants who got jobs in non-subsidized employment, an increase of 96 percent over the number who were employed in private industry in fiscal year 1972. In fiscal years 1973 and 1974 combined, WIN placed about twice the number of individuals in jobs it had placed in the entire first 4 years of its life, 1967 through 1971.
Despite limited Federal funding, which has remained basically at the same level since fiscal year 1974, and relatively high unemployment, this program has been progressively successful in placing WIN participants in non-subsidized employment and reducing the welfare rolls. By fiscal year 1976, the number of WIN participants employed in private industry had increased to 158,300; 86,700 of such families with an employed WIN participant went off welfare; and 71,700 received a reduced AFDC grant because of the salaries earned by WIN participants.
Encouraged by this progress. Congress in Public Law 95-30 authorized an additional $435 million for employment and supportive services for welfare recipients with no requirement for State matching funds. Neither these funds nor an additional $265 million approved by the Senate in S. 2779 were appropriated basically due to the administration's emphasis on its welfare reform proposal.
Present funding levels allow full participation in the program by only one-fourth of WIN registrants. Seventy-five percent of the current 2 million persons registered during a given year receive no services other than registration and appraisal.
In spite of no additional funding, the WIN program placed 234,614 WIN participants in non-subsidized employment in fiscal year 1978, an increase of 260 percent over fiscal year 1973.
Mr. President, I ask unanimous consent to have printed in the RECORD a table showing the number of WIN participants who got jobs for fiscal year 1973 through the first quarter of fiscal year 1979.
There being no objection, the table was ordered to be printed in the RECORD, as follows:
[Table omitted]
Mr. TALMADGE. Mr. President, the Labor Department estimates overall savings in fiscal year 1978 amounting to $644,890,672. Total program expenditures were $382,470,082, resulting in a return of $1.69 in grant reductions for each dollar expended. Additional reductions, generated as the result of reductions in medicare, food stamps, housing, and other benefits, are not included in the overall savings. In addition to the grant reductions due to employment of AFDC recipients, there were savings due to 40,040 persons entering employment during AFDC applicant status largely because of the WIN program. Most such persons do not become AFDC recipients.
Mr. President, many people say that welfare recipients are unemployable, that it is unreasonable to attempt to move them into the non-subsidized labor force. That assessment is wrong, in my opinion.
Many AFDC recipients are working and earning income from non-subsidized job placements through the WIN program or in jobs found on their own initiative to help support their families. Some do not earn enough or can work only part time. Because of the size of their families, these individuals must still be helped financially by the AFDC program but with reduced benefits. The biannual survey of AFDC recipients in 1975 showed that about 16 percent of AFDC mothers were employed either part time or full time.
Employment and earnings play an important role in the lives of welfare recipients. WIN and the WIN tax credit have played an important role in assisting these individuals in the transition from welfare to private sector jobs since Congress in 1971 placed greater emphasis on immediate employment instead of institutional training and, also adopted the WIN tax credit. With the expanded WIN/welfare tax credit authorized by Public Law 95-600, even more AFDC recipients will succeed in entering employment through the WIN program.
Mr. President, the majority of the Budget Committee appears to have ignored the reports sent to it by the Finance Committee. I ask unanimous consent to have printed in the RECORD the first 3 pages of the view of the committee sent to the Committee on the Budget on March 10, 1978, pertaining to the item relating to "estimating budgetary impact" which details how the value of the WIN program has been underestimated in the past by budget analysts.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
COMMITTEE ON FINANCE,
Washington, D.C.,
March 10, 1978.
Hon. EDMUND S. MUSKIE,
Chairman, Committee on the Budget,
U.S. Senate,
Washington, D.C.
DEAR MR. CHAIRMAN: This letter transmits the views and estimates of the Committee on Finance on those aspects of the Federal Budget for fiscal year 1979 which fall within the Committee's jurisdiction as is required by section 301(c) of the Congressional Budget Act of 1974.
Estimating budgetary impact.— In the course of developing its recommendations with respect to the fiscal year 1979 budget, the Committee became aware of certain estimating problems which tend to distort the budgetary picture. These problems relate to the offsetting impact which certain budget items may have on other aspects of the budget. One such problem is that an increase in one budgetary function may result in offsetting reductions which occur under other budgetary functions. A budgetary allowance for a given proposal thus may stand out as a significant increase while any offsetting impact may be hidden in the overall estimates for other categories. A related problem is that the budgetary increases resulting from new legislation tend to be more easily estimated than the offsetting savings.
The work incentive (WIN) program under title IV-C of the Social Security Act is a case in point. This program is directly targeted on the reduction of welfare dependency. It includes supportive services, placement activities, training, and subsidized employment. Through some or all of these activities, the program serves to move an individual from welfare to employment. This is a program which, in the Committee's view, clearly pays for itself. However, allowing for increased funding requires a budgetary increase in the social services category, while offsetting savings occur in different categories (income security to the extent that AFDC and food stamp costs are reduced; health to the extent of medicaid savings). In addition, the program results in a savings of State welfare expenditures which are simply not reflected in the budgetary totals — although they are important in evaluating the budgetary impact of the program from the taxpayer's standpoint.
In addition to the fact that the budgetary categories tend to obscure savings, the extent of the savings has been disputed. The difficulty of determining the relationship between participation in the program and subsequent employment, and the lack of certain data concerning the duration of employment, result in significantly differing views of the level of offsetting savings which result from increased WIN funding. However, the fact that savings may be more difficult to estimate than costs does not mean that savings are less real than costs. Nor is it a valid approach to the budgetary process to ignore savings because of difficulties in estimating them.
The Committee is convinced that there are substantial numbers of welfare recipients who are employable and that the WIN program can, if adequately funded, provide them with the necessary assistance and opportunities for employment. Moreover, the Committee believes that the WIN program must be viewed as an integral part of the actions Congress has taken in the past few years to improve welfare programs and to reduce avoidable dependency. (Another important element of this type is the child support program enacted in 1974.) The results are impressive.
The rapid escalation of welfare dependency which was characteristic of the program at the end of the last decade has been stopped. Even during the recent recession, when increased dependency would have been expected, the AFDC rolls have, in fact, declined. In the five years prior to the 1971 amendments which restructured the WIN program, the AFDC caseload was increasing at an annual rate of 18 percent as compared with an average annual increase of only 1 percent over the past 5 years — and an actual decline of more than 2% percent over the most recent 12-month period for which statistics are available.
The Committee believes that these more favorable trends in caseload account for substantial savings in expenditures far exceeding what has been spent on WIN, child support enforcement, and other activities which have contributed to those savings. A valid budgetary judgment must attempt to balance proposed increases in funding for such programs against the savings which may be anticipated to result from them. For this reason, the Committee, in developing its budget recommendations, has incorporated significant offsetting savings into the estimates underlying this letter in those instances where the Committee anticipates increased funding of programs which would produce such savings.
With every good wish, I am
Sincerely,
RUSSELL B. LONG, Chairman.
Mr. TALMADGE. Mr. President, I would like to clarify the impact on the WIN program the recommendations of the Budget Committee would have if the recommendations were binding, which they are not.
Current law requires that every applicant for or recipient of AFDC register for employment and training in the WIN program, unless exempt. Exempt persons include mothers of children under age 6, ill or disabled, or caretakers of ill or disabled persons. Elimination of WIN would remove the work requirement for AFDC.
Since WIN has fixed costs for intake registration, appraisal adjudication, and administration of about $82 million and one-third of all expenditures must, by legislation, be for OJT and PSE, only $52million would remain for job development and placement and social services (fiscal year 1978 actual expenditures for social services were $117,552).
At the end of fiscal year 1978, 1,553,010 persons were registered with WIN. During fiscal year 1978, some 2,269,875 persons had been registered. The WIN system serves not only as manager of the work test for this population, but also serves to bring both WIN and non-WIN resources together to meet employment and social services needs of registrants. WIN not only provides child care and other social services needed by registrants as they prepare for and enter employment, but also locates and assists registrants to use resources available from title XX and other programs to meet their continuing needs. In addition, WIN provides work experience and institutional training to meet needs not otherwise served.
WIN serves as a recruitment source for other programs. In fiscal year 1978, 52,525 WIN registrants entered subsidized public employment, primarily CETA public service employment, and 37,427 entered non-WIN funded training and educational development programs.
The elimination of WIN would remove the WIN system which coordinates the delivery of services and entry into jobs of the AFDC employable population.
The WIN system, with its accountability for management and operation of the service delivery system, would be unfunded under this proposal. This would eliminate the only cadre of public employees who have extensive experience in moving welfare recipients into unsubsidized employment and who are focused exclusively on working with this group. At the end of fiscal year 1978, 8,806 WIN sponsor staff and 5,092 social services staff were serving this population. The budget proposal would also remove the clear accountability for providing services to this group now present in WIN.
The elimination of WIN, which covers 91 percent of the AFDC population and had 1,553,010 registrants at the end of fiscal year 1978, would result in the elimination of the organization, systems, and experience necessary to develop any effective work requirement administration for the AFDC program.
In short, to eliminate WIN is to forsake the only proven program which breaks the insidious welfare cycle and is cost effective. This simply does not make sense to me.
Mr. President, I hope that when this matter goes to conference between the House and Senate that the House conferees would prevail in this matter; that they would not reduce the work incentive program at all. I feel certain that we can reasonably find the necessary funds from the CETA program, which has its problems.
I know of no one who is critical of the WIN program. It saves money for the taxpayers of this country.
I thank my distinguished friend for yielding.
Mr. MUSKIE. Mr. President, I might make two observations. One, I think theSenator is right. There were several votes that were dominated by the issue of CETA, rather than by the WIN program.
Second, I want to make this clear: That if the WIN program is fully funded, the funds have to be taken from some other program in order to meet the targets of this budget.
But, finally, I would make the point that, of course, the budget is subject to conference and, since the House does have this program fully funded in its budget resolution, it clearly is subject to conference.
Mr. TALMADGE. I thank my distinguished friend.
Mr. LONG. Will the Senator yield to me on that point?
Mr. MUSKIE. Yes; I am happy to yield to my good friend from Louisiana.
Mr. LONG. Mr. President, apropos of the discussion just held about the work incentive program, it makes me think of the efforts some of us have made down through the years to try to require that fathers make a contribution toward the support of their children when those children and their mothers found themselves on welfare.
For many years, the hierarchy over the Department of Health, Education. and Welfare preferred to think there was no real potential in obtaining a contribution from the fathers of those children. Now we have proved them wrong.
I am pleased to say that Secretary Califano agreed with us in the Finance Committee. He has helped us implement the program where the Federal Government as well as the State governments were expected to find those fathers and proceed against them legally to make them contribute to the support of their children.
The program has been successful. It is saving us at least $500 million a year. But the big saving is in the fact that a lot of people do not apply to go on the welfare rolls in the first instance because they know the question will be asked, "Where is the father; why can't he make a contribution?"
They know if someone gives them a simple answer, "Well, I don't know where he is," they are going to be asked to cooperate by identifying where he is or his last known address and that reasonable efforts will be made to find him and make him contribute to his family's support.
So a mother who knows the identity of the father and knows he is able to contribute will get to proceed against him, to say the Government will help her gain child support from the father, even if the family is not on the welfare rolls in the first instance, to keep the family from going on welfare. Counting the families who never go on welfare, I am confident that we have saved perhaps $1 billion a year with the program, much of it not being identified in the Federal budget.
But, obviously, mothers are not going to apply for welfare if they know the father can be found, if they know where he is and that he can be made to contribute.
There again is a big saving.
For years there have been people over in the Department of Health, Education, and Welfare who, when asked how they could reduce the budget, suggest the first order of business is that we eliminate the item where the Federal Government would spend some money to find the fathers in order to make the fathers contribute. Well, for every dollar we spend that way, it would save $4 in increased welfare payments.
The same thing applies to the kind of thing the Senator from Georgia was speaking of where we tried to teach people who are on welfare how to do something and put them in a job.
Obviously, that makes money for the Government, because what we spend in qualifying those people to hold a job makes taxpayers out of tax eaters, and that is the best kind of welfare reform one can have.
That is where the Government helps people solve their problems in a way that makes them self-sustaining citizens rather than increasing their dependency, as has too often been the case.
I hope very much the distinguished chairman of the committee will take very much to heart the suggestions made by the Senator from Georgia, and, if he agrees, that he would hope to work them out in conference.
Mr. MUSKIE. I certainly will. I know my good friends from Georgia and Louisiana have been staunch and enthusiastic supporters of the program from the beginning. The arguments they have made cannot help but be impressive to anyone who listens, and I have been listening, and when those arguments are supported by testimony from my own State and the departments of those affairs, it is doubly impressive.
I thank my good friends.