(We) thank the Chair and Committee Members for scheduling this very important hearing on reform of the federal role in child welfare programs.

In providing services to children, we must always begin with the understanding that the best service we can provide to "at-risk" children is to reduce the number of children who become "at-risk". Regardless of the social pathology that is under study, whether it be teenage pregnancy, drug abuse, suicide, low self-esteem, juvenile delinquency, poor academic performance, or any of our other social ills, the greatest causal factor is family breakdown or family non-formation.

Virtually all of our social welfare programs are band aids and tonics to treat our childrens' afflictions. The intact two parent family is the immunization program that reduces the tragic needs for band aids and tonics. Too often, our government programs have forgotten the simple axiom that prevention is better than treatment. This hearing on family preservation programs specifically demonstrates the need to reform government programs that focus on treating symptoms while leaving the cause of the symptoms in place.

In virtually all of our programs, the phrase "family preservation" has become narrowly defined to mean the propping up of the single mother household as a stand-alone entity. While most single parents do all they can for their children, and many children of single parents develop beautifully, the inescapable history of our programs demonstrates that many single mother households will never succeed as stand-alone units and many children in those households are in grave danger, both physically and developmentally.

The typical "at-risk" child enters the child welfare system as a result of an abuse and neglect complaint or at the request of the single custodial parent. Many of the abuse and neglect complaints are initiated by other family members who observe and are concerned about the child's status. Before addressing positive steps that can be taken by the government that can aid the child, we must be sure to obey the physician's creed of "First, do no harm."

When the federal government's narrow definition of "family preservation" is heavily oriented toward defending the single parent custodial household, the federal intervention can actually prevent an improvement in the child's situation. Take, for example, the sadly all too common case of an abusive or neglectful parent who is reported to authorities by other relatives such as the grandparents. The grandparents are concerned about the welfare of the grandchild and are frequently willing, eagerly or reluctantly, to provide rescue in their own home. Rather than obeying the physician's creed, however, federal "family preservation" resources are reflexively mobilized on behalf of the abusive parent. Cash benefits, counseling, in-home services, free or subsidized legal services, and other resources are brought to bear to prop-up the dysfunctional single parent. Generally, the only party not legally represented and subsidized by the federal government will be the relative who reported the child's need and offered to serve as a refuge. One simple but critical reform is to recognize that family preservation is not limited to the single parent household but includes blood relatives in the extended family or "kinship" network. Whether it is the father, the grandparents, or the aunt who seeks to be part of the answer to the child's needs, the government is wrong when it defines "family preservation" to exclude these relatives and actively mobilizes its resources to resist their involvement.

The tunnel vision that afflicts current "family preservation" efforts can be seen at all stages of the child welfare process. It is rare for a caseworker even to seek the identity of the child's father and almost unheard of for the caseworker to seek information regarding the father's fitness and willingness to provide for the child's needs. If the father or another relative independently comes forward in an effort to assist the child, the caseworker's standard response is to resist rather than embrace the assistance. This resistance is wrong. The government's interest is in protecting the child and not in defending one parent's ownership of that child against all others. "Family preservation" must be understood to include and encourage the participation of all family members and must move beyond the mere administration of programs designed to prop up the single parent as a stand-alone entity.

The absurdity of the current system is even more starkly highlighted in situations where the caseworker realizes that the child must be taken from the care of the single parent. In every state in the country, the standard operating procedure is for the bureaucracy to skip over the entire extended family and consider only third party placement. The bureaucracy's fallacy is in viewing child placement as a simple dichotomy -- an unfit single parent versus third party foster care or adoption. Kinship care needs to be recognized as the broad middle on the continuum of options between single parent custody and third party placement.

While the Committee recognizes broad operating differences in the programs and procedures among the various states, the above prejudices and irrationalities have become a universal outgrowth of the current, narrow federal view of "family preservation." If child welfare programs remain federally directed, "family preservation" must be clearly redefined to embrace and encourage fathers, grandparents and other relatives as child rescuers. If the states are given block grants, the federal government must assure that its responsibility for having created this bias is countermanded in the block grant terms in order to assure that the block grants do not merely perpetuate the status quo.

Regardless of the form given to new child welfare programs, the federal government must change its method for the measurement of program success. Like many federal programs, the 427 review process examines the number of band-aids that have been applied to the wounds rather than the amount of healing that has taken place. In 427 reviews, the states are asked to disclose the number of band-aids and give a description and explanation of those band-aids. What is needed in reforming the 427 process is an evaluation that looks at those things that actually matter in the lives of children:

Has the child's safety improved?

Has the child's behavior improved?

Has the child's school performance improved?

We know that the states are capable of running programs that use lots of band-aids. The federal government's evaluation system needs to be structured to incentivize the states not simply to devote more resources to the problem but to devote the available resources to those things which measurably improve child well being.

Kinship care is a resource currently overlooked by the too narrow definition of "family preservation". Kinship care does not create any new legal obligations, it merely embraces the voluntary love and resources of the family. Kinship care saves money. Unlike foster care providers, kinship care providers need not (Lipscomb v. Simmons, (9th Circuit, April 27, 1992)) and should not (to avoid improper incentives) be paid a salary in caring for their own kin. Kinship care improves child well being, reduces spending, and reduces government intrusion by promoting true family preservation.

The remainder of this testimony describes the overview of (our) approach to welfare reform with particular emphasis upon the methods by which kinship care can become an important part of the solution in AFDC cases as well as in child welfare cases. 

It is time to reform welfare. We must change the systems under which our only criteria are that beneficiaries must continue to neither work nor marry. Children are harmed when the unintended consequence of policy is to favor non-working, single parent households over all others. Most law-abiding citizens work 40 to 45 years to qualify for a social security benefit that is smaller than a teenager's welfare package.

Welfare reform requires attention to four areas: responsibility, paternity, accountability, and eligibility.

Responsibility. Every welfare recipient should be required to devote 40 hours per week to some combination of job search, training and work, with a strong emphasis on work. Revising current programs to end the existing discrimination against two-parent families will also increase access to child-care from both parents and reduce the cost of day-care needs.

Paternity. Current policy fails to distinguish between "runaway" and "thrown away" or "driven away" parents. Successful paternity establishment requires that fathers must be accepted and respected in all programs as family members rather than merely as cash donors.

Accountability. Prior efforts at reform have been reluctant to impose sanctions against uncooperative and irresponsible adults because of a fear of "punishing the child." The reality is that current policies allow children to be held as hostages to guarantee continued subsidy of adult irresponsibility.

Eligibility. Minor parents must live with or at the expense of their own parents. Income based eligibility standards should consider both the income of the parents and the resources that are voluntarily available from the kinship network. Fraud must be addressed as a serious matter.

The following pages provide:

(1) an Overview of Principles and Programs;

(2) a proposal for kinship care as an alternative to
government care;

(3) a proposal to end federal pre-emption of state
law regarding teenage births;

(4) a proposal for allocation of the dependent tax
exemption; and

(5) a proposal for dealing with program fraud.

There is widespread agreement that the current welfare system is destructive of the families it was intended to help. Despite its good intentions, the government has made a devil's bargain with the poor -- "We will give you money as long as you continue to neither work nor marry." Current programs and many reform proposals are patronizing. They assume that large classes of citizens are simply too stupid and incompetent to make any current or near term contribution to their own support. Real welfare reform requires recognition that there is no respect for the individual unless there is respect for the individual's labor.

Work always pays. Our problem is that we have established a parallel system under which non-work often pays better. Most law abiding citizens work 40 or 45 years to qualify for a social security benefit that is smaller than a teenager's welfare package. Many welfare recipients are not unemployed, they are prematurely retired. We have long recognized that Social Security rules discourage paid employment among senior citizens. We have recently recognized that welfare rules discourage paid employment among welfare recipients. The cornerstone of welfare reform must be respect for the importance and dignity of work. Except for the small number of people who are genuinely unable to make any contribution to their own needs, welfare must be a supplement, not a substitute for work.

Welfare reform requires attention to four areas: responsibility, paternity, accountability, and eligibility.

Responsibility should be immediate, mandatory and universal. Beginning immediately with entry into any welfare program, every recipient should be required to devote 40 hours per week to some combination of job search, training and work with a strong emphasis on work. Actual work experience is generally the best training for advancement in the work place. An immediate, universal work requirement also eliminates the "no job" option and encourages serious search efforts for the best available job.

The work requirement can be satisfied by private employment or by unpaid public service in exchange for receipt of the welfare benefit. Work programs should not discriminate against the non-welfare working poor. Vouchers and other special incentives to hire welfare recipients create the risk of displacing other workers. We should not support programs that have the unintended consequence of encouraging people to enter welfare as the path to job preferences. Community service jobs (e.g., assignment to charitable organizations) provide benefits to the community and training to the employee at little or no government cost. Many of the current, unmet needs of communities can be satisfied by this new pool of labor as a supplement to, rather than a substitute for, current employees.

All programs must be open to and end the current discrimination against two parent families. In two parent families, at least one parent must satisfy the 40 hour requirement.

Welfare reform should also begin the process of examining barriers to entry-level job creation. Many worthy tasks in society are not performed because the total cost of obtaining labor, including regulatory and recordkeeping burdens, exceeds the value of the service. We need to examine the extent to which willing workers have been priced out of the market by government mandates.

Child care may be less of a problem than argued by some. Most current working parents utilize some low-cost combination of family, friends and school to satisfy day care needs. As discrimination against two parent households is eliminated, a greater number of children will have access to child care from both parents. Finally, a portion of the community service assignments can be made to child care organizations to increase the available supply at little or no incremental cost. The Head Start Program already utilizes large numbers of low income parents who begin as unpaid interns and progess to paid staff and supervisory positions.

Current policy fails to distinguish between "runaway" and "thrown away" or "driven away" parents. The federal government spends approximately two billion dollars per year on child support enforcement but purposefully and consciously excludes fathers from all parent-child programs. Under current AFDC rules, the low income father who wishes to be a physical and emotional asset to his children also becomes a financial liability by disqualifying them from most assistance. Research conducted by HHS itself confirms that both mothers and fathers distrust the bureaucracy and work jointly to conceal paternity. We cannot be surprised by low income parents who separate or conceal paternity when our policies make such behavior the economically rational course. A work requirement for single parents and an end to discrimination against two-parent households will change the dynamics of paternity establishment.

Eligibility for all federal programs should require establishment of paternity, beginning with eligibility for the WIC program. That program itself must be revised to develop and encourage the roles of fathers.

Paternity establishment forms in hospital programs should encourage the parties to voluntarily establish custody and visitation as well as financial support. Avoidance of poverty and welfare dependency are directly linked to father involvement. Child support compliance exceeds 90 percent in joint custody families. Child poverty rates and welfare dependency rates are much lower in father custody families than in mother custody. Women's workforce participation and economic security are increased in joint custody and father custody families.

AFDC and other programs are intended for the benefit of the dependent children. Adults receive the benefits and are expected to participate in the programs in support of the children's needs. Failure or refusal to participate in required programs or to spend the cash payments for the benefit of the children should be seen as evidence of child neglect or abuse. Such evidence should weigh heavily in determining whether it is in the best interests of the child to transfer custody to a more responsible relative or to consider a foster care placement. Prior efforts at reform have been reluctant to impose sanctions upon uncooperative and irresponsible adults because of a fear of "punishing the child." The reality is that current policies allow children to be held as hostages to guarantee continued subsidy of adult irresponsibility.

All recipients should be required to reimburse the value of benefits received. Currently, child support paid by non-custodial parents is used for reimbursement after a $50 per month waiver. The custodial parent should have the obligation to reimburse one-half of the welfare payments made on behalf of the child and each adult should have the obligation to reimburse benefits paid on behalf of that adult. Many welfare recipients require only short term assistance and that assistance can fairly be treated as a loan or a line of credit rather than as a grant. A uniform reimbursement requirement also encourages all recipients to minimize the period of dependency, take no more benefits than are required, and resume paid employment at the earliest possible date. Community service should be counted toward the reimbursement obligation but should be valued at a level that does not compete with the attractiveness of paid employment.

Under the law of each state, parents have an obligation of financial responsibility for their minor children. If the minor children themselves become parents, the minor parents should continue to be the obligation of their own parents. Accordingly, the birth of a child to minor parents may create a requirement for welfare assistance to the new infant but does not create a requirement for assistance to the minor parents unless their own parents are unable to supply the required support. Minor parents must live with or at the expense of their own parents. Payments on behalf of the new infant should be made to the parents of the minor parents as their guardians.

Welfare payments should be limited to citizens and immigrants with refugee status.

Income based eligibility standards should consider both the income of the parents and any resources that are voluntarily available from the kinship network. See attached proposal for more details.

Fraud must be addressed as a serious matter. Welfare benefits are based on the applicant's self-reporting of available income. If welfare fraud has concealed additional income, welfare eligibility must be recalculated, at a minimum, to include the demonstrated capacity for self support. See attached proposal for further details. Other fraud reduction mechanisms including electronic transfers and improved identification verification must be adopted.

The earned income tax credit must be modified to reduce the incentive and opportunity for strategies such as over-reporting of income to maximize benefits and to reduce discrimination against two parent families. Currently, many working class couples are ineligible for EITC but, simply by splitting into two dysfunctional fragments, both become eligible.

There is a broad consensus that welfare dependency is not in the best interests of children. Recent legislative initiatives have begun to examine the structural flaws in existing welfare programs. One of the best opportunities for reducing welfare dependency is to be found in the development of more thoughtful eligibility criteria to better identify the children who are actually in need of welfare assistance.

Currently, most welfare programs look only at the cash income of the custodial single parent without regard to the availability of voluntary kinship or extended family assistance. The attached proposal provides that welfare eligibility should be determined by examining all resources that are available voluntarily through the child's kinship network.

The proposal does not relieve the child's parents of their obligations nor does it impose new obligations on other relatives. Only voluntary kinship assistance is considered.

Examples:

The Congress of the United States finds that:

Under the law of each state, parents have an obligation of financial responsibility for their own minor children. If the minor children themselves become parents, these minor parents should continue to be the obligation of their own parents.

Current welfare eligibility rules subvert this basic rule of parental responsibility and create perverse incentives for teenage child bearing. Simply by having a child, federal programs give the teenager an independent income source and relieve the teenager's parents of the obligations imposed by state law.

Under state law, a minor must live with or at the expense of his or her own parents. The birth of a child to that minor should not be a basis for the federal government to override state law. The federal government should not subsidize the establishment of independent households by minors.

If the parents of the minor are already on public assistance, their payments should be governed by the rules applicable to other families experiencing the birth of an additional dependent. If the parents of the minor are a danger to the minor or grandchild, the case should be processed under the normal rules of guardianship used by the state. Again, there is no justification for a federal program which automatically establishes all minors as independent households upon the birth of a baby.

Prior law provided that the dependent exemption for a child of divorced parents was available to the parent providing greater than 50% of the child's support. At that time, it was difficult to determine which parent provided greater than 50% of the support and the law was changed in 1984 to create a presumption that the exemption would be given to the custodial parent. The current law has created some new problems and has not kept pace with federally imposed changes in the establishment of child support orders.

Most divorce litigants do not have lawyers and, even with lawyers, most divorce decrees fail to address the allocation of the dependent tax exemption. Some courts have taken the position that they do not have authority to allocate the exemption to the non-custodial parent even in cases where the custodial parent is unemployed and it is clear that the non-custodian is providing 100% of the child's financial support. Allocating the dependent exemption to a household with no income does not help the child and, in fact, reduces the after-tax income available to support the child.

Recent federal legislation governing the establishment of child support orders has eliminated the uncertainty which motivated the 1984 law regarding allocation of the dependent exemption. In the past, child support orders were subjective, ad hoc determinations that did not identify each parent's share of the child's financial costs. Federal law now requires that each state have a presumptive, mathematical guideline for the establishment of child support. Under the "income shares" model used by most states, the state determines a child's costs and then allocates these costs in proportion to each parent's income. The child support computation formula thus establishes unambiguously which parent provides more than 50% of the child's financial support.

The law should be revised to provide that the dependent exemption shall be allocated to the parent who bears more than 50% of the child's financial support as established by the applicable child support order. To avoid ambiguity and dispute, the taxpayer claiming the exemption could be required to submit a copy of the court order as an attachment to the tax return. Most child support orders are now generated by computers using the state's child support formula and are set forth in a one page computer printout.

In the District of Columbia and in most states, welfare fraud is a no-risk adventure.

If caught, the standard guilty plea merely requires restitution (sometimes only partial) which is paid out of future welfare benefits! Welfare is a disastrously anti-family program in which the government offers itself as a substitute for responsible two-parent family behavior. Welfare fraud multiples the problem by making welfare more lucrative.

Welfare benefits are predicated on the assumption that the welfare recipient cannot earn an outside income and that a government subsidy is required for basic needs. Initially, we accept the applicant's unilateral assertion of this inability to earn an income. In the case of the welfare cheat, however, behavior proves that an income can be earned and the receipt of welfare benefits is simply a theft of benefits that are not needed. Having proved that an income can be earned, the welfare cheat should be disqualified from receiving benefits in the future at least to the extent of the earnings potential that has been demonstrated.

Past enforcement efforts have been backward. The welfare cheat is permitted to quit the unreported job and go back to the dole. The reverse should be true. Having demonstrated earning capacity, the welfare cheat should be disqualified from again asserting an inability to earn income.

In the current economic crisis of budget deficits and soaring welfare rolls, it may finally be possible to impose serious sanctions upon welfare cheaters. The following legislative suggestions are offered: