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consistent with the decline of the average home energy prices after adjusting for inflation.
Question. Isn't it true that even the combined resources of all levels of government and the private sector still fall short of the need for low-income fuel assistance?
Answer. We do not believe that these combined resources fall short of the need for low-income fuel assistance. The flexibility of the block grant enables States to target the most appropriate assistance (heating, cooling, crisis, and/or weatherization) to the households that are most in need. States can adjust their LIHEAP eligibility standards and benefit levels, amounts transferred or carried over, and types of assistance provided, to best meet the needs of their citizens.
In addition, States can add oil overcharge and State funds to LIHEAP. They can reduce or eliminate transfer of LIHEAP funds to other block grants, or transfer funds from 2 other block grants into LIHEAP. State decisions in these areas, reflect their own priorities. In fact, a majority of States continue to transfer funds from LIHEAP to other block grants, implying energy assistance is not as high a priority. In addition, many utility companies provide assistance to their low-income customers, and private fuel funds also provide assistance to those in need.
EMERGENCY SERVICES OF COMMUNITY ACTION AGENCIES:
IMPORTANT DURING THE RECESSION
The biggest program funded by the Community Services Block Grant are the Community Action Agencies. Many Community Action Agencies have been called upon to meet increasing demands for emergency services due to the recession. For example, a plant closing in Cedar Rapids, Iowa about a year ago left 1,400 people without jobs. More than 400 of these people turned to the local community Action Agencies to help them through this crisis. When the recession hit this already economically depressed part of the State, the impact was particularly severe. Many of these people have not been able to find jobs and now find that their unemployment benefits are running out. They rely on the Community Action Agencies for emergency food, energy and rental assistance--all of which are funded by the Community Services Block Grant. Approximately one-third of the people affected by this crisis who turned to the Community Action Agencies for help were first time clients.
Question. Why is it that this Administration has again failed to recognize that Community Action Agencies are used to provide direct emergency services which are vital to families and individuals in need, particularly helpful during this period of recession?
Answer. Since only 10 percent of all Community Action Agency (CAA) funding comes from the community Services Block Grant (CSBG) program, discontinuing the funding for the CSBG will not be a serious problem for a majority of the CAAS. CAAs will continue to be able to provide services to the poor under other Federal, State, and local public and private sources, e.g. Women, Infants and children (WIC), Temporary Emergency Food Assistance Program (TEFAP), food programs administered by the Department of Agriculture, and the Stewart B. McKinney Homeless Assistance Act, as they currently do.
Question. Why don't you propose repealing the authorizing statute, rather than eliminating funding for programs you don't like?
Answer. Last year Congress debated the question of reauthorizing programs under the Community Services Block Grant Act which were to expire at the end of the fiscal year. At that time, we made our views clear to the appropriate Committees and to the Congress as a whole that we did not support the reauthorization of these programs. Nevertheless, Congress chose to reauthorize the Act through FY 1994. In the meantime, we have a responsibility each year to reflect the priorities of the President and his Administration when the budget is presented to the Congress. For the reasons we have mentioned earlier, with the exception of the National Youth Sports Program, we have not requested funding in FY 1992 for the community services programs administered by FSA.
MONITORING THE JOBS PROGRAM
In FY 1992, the JOBS program will be entering its third year. It is a $1 billion dollar entitlement program, aimed at getting welfare clients into permanent jobs.
Question. Why is it that your budget justification says absolutely nothing about the numbers of persons being served?
Answer. Hard data regarding participation in JOBS is not yet available. We anticipate that States will begin to report on JOBS participation in April, 1991. The JOBS program offers an array of services and component activities which involve different numbers of program participants. In addition, States have a great deal of flexibility in determining what mix of services they provide, and to what groups of recipients they provide them. Therefore, obtaining information about JOBS participatio and the number of persons served this early in program implementation has been difficult.
FSA has developed several ways of monitoring the number of persons served in JOBS. FSA is conducting field reviews of State JOBS program operations, which will identify any problem areas related to participation rates. FSA report forms will provide data un the participation rates of each state's JOBS program, including data regarding component, target group/non-target group, program status, and number of months of participation. Report forms will be reviewed and analyzed after receipt in FSA. Additionally, we are currently implementing a sample-based reporting system that will provide data about JOBS participants on an on-going basis. This system is targeted for operation by October 1, 1991.
Question. What are your goals for this program, and how do you plan to measure the State's performance in achieving them?
Answer. FSA's goal for the JOBS program is to establish in each State a statewide JOBS program that provides effective education, employment, and training services, that together with necessary child care and supportive services, will assist welfare recipients to become self-sufficient.
We currently measure State program performance by the standards in the statute. For FY 1991, those measures (which affect a State's eligibility for enhanced federal funding) are: (1) Did the State meet the 7 percent participation rate? and (2) Did the State spend 55 percent of its JOBS expenditures on the target groups established in the law?
The statute requires the Department to recommend performance standards to Congress by October 1, 1993, The Department has contracted with the Manpower Demonstration Research Corporation to do an evaluation of the JOBS program as required by the statute. Studying potential performance measures is a part of that contract.
Question. What is your reaction to the recent study by Child Trends, which suggests that job training programs may be ineffective in helping the most disadvantaged welfare recipients?
Answer. Earlier studies of welfare-to-work programs have found that they are effective in reducing welfare dependency and increasing earnings for the more disadvantaged subgroups of AFDC applicants and recipients. They found that earnings increases were greatest among welfare applicants who were moderately dependent on welfare (that is, those who had some prior work history, but also some prior welfare receipt). These studies also show significant decreases in welfare dependency for the most disadvantaged recipients. In fact, the only group which did not consistently show gains from these programs was the most job-ready group of applicants.
The JOBS program may be even more effective than these earlier programs in reducing welfare dependency. JOBS provides the states with much greater federal resources, and targets these resources to potential long-term recipients. Thus, under JOBS, we should see more intensive programs and greater participation than was seen in earlier welfare-to-work programs. The results of the Saturation Work Initiative Model (SWIM) program in San Diego suggest that these changes could produce greater impacts. SWIM, which consisted of a sequence of job search, work experience, and education and skills training, and involved high levels of participation, produced earnings and welfare impacts for AFDC recipients that exceeded those of other broad-coverage programs studied, and equalled the levels achieved in much smaller and more selective programs. JOBS also includes basic education in its array of services offered, which should benefit the most disadvantaged welfare recipients.
While we believe that JOBS has the potential to achieve its goal of increased employment and decreased welfare dependency for more disadvantaged welfare recipients, there are many gaps in our knowledge about the impacts of specific types of programs on particular subgroups of recipients. Therefore, we have undertaken a multi-year evaluation of the JOBS program, which will fill some of these information gaps and enable states to design more effective JOBS programs in the future.
GROWTH OF AFDC CASELOAD
Federal welfare payments are expected to increase by $1.1 billion in FY 1992, for a total of $14.5 billion. The number of families receiving AFDC benefits is expected to grow to 4.46 million in FY 1992, compared to 3.97 million in 1990.
Question. What are the major reasons for the growth in welfare costs, and the increasing caseload?
Answer. We are concerned about the increase in the AFDC caseload, but do not yet fully understand its causes. The rise in the caseload began to accelerate during the fall of 1989 and has persisted through calendar year 1990.
Our analysis, which has been supplemented by Input from state welfare officials, points to a number of causes for the increase. All probably had some influence in differing degrees from region to region across the United States.
Economic factors, especially increasing unemployment, are one likely cause of the rising caseload. Administrative changes in the welfare system, such as expansion and outreach in Medicaid and greater integration among welfare programs, are other possible factors. Some States, such as California, Florida and Texas, also believe they may be experiencing the effects of immigration reform, which may have increased the rate of participation in AFDC by American-born children of legalized aliens. Contributing demographic factors include increasing birthrates and a rise in divorces and outof-wedlock births.
We are continuing to look at caseload trends and are planning to initiate a comprehensive study of factors affecting AFDC caseload size. We expect to initiate this study prior to the end of the fiscal year. In addition, we will continue to assess information as it becomes available from States and other sources.
Question. Are States reporting difficulties keeping up with growing AFDC workloads?
Answer. A number of States have indicated that growing caseloads, sometimes combined with staff cutbacks, are making it harder to meet several of the AFDC requirements, including: processing timely applications within 45 days; completing a redetermination at 6 month intervals; processing and completing independent verification of computer match information under the income and eligibility verification system (IEVS). In order to process the growing workload, some states have modified their standard verification, error reduction and fraud prevention procedures.
Question. Is the JOBS program having any measurable effect in controlling welfare costs?
Answer. Although the Family Support Act was passed in October, 1988, States could not begin operating JOBS programs until July, 1989 and had until October, 1990 to actually initiate a JOBS program. In addition, States have until October, 1992 to implement statewide. Therefore, it is too early to say that JOBS has had a measurable effect on controlling welfare costs. We are encouraged by the efforts of States to implement the program in view of the other challenges that they are facing.
Question. Does the growing costs of welfare, for which the States pay up to half, threaten their ability to meet the matching requirements for participation in the JOBS program?
Answer. States are not expected to avail themselves of all available Federal funding before 1996. State budget deficits, as well as the increasing AFDC caseload, may affect States' ability to expand programs at the projected rate. However, States are not mandated to have statewide programs until October 1, 1992.
Question. What lessons are to be learned from the State of Wisconsin, which is bucking the national trend of increased welfare costs?
Answer. Just as the reasons for the national caseload increase appear to be quite complex and are not fully understood, so are the reasons for the lack of caseload increase in Wisconsin.
We believe that the strong economy in Wisconsin has contributed to the stability of its AFDC caseload. Wisconsin's unemployment rate in December 1990 was only 4.4 percent, compared to the national rate of 5.9 percent. In the Milwaukee metropolitan area, where over 40 percent of the State's AFDC families live, unemployment was only 3.6 percent last December.
other factors also are probably contributing to Wisconsin's success in keeping its AFDC caseload down. The caseload in several other states stayed essentially flat from July 1989 to November 1990, including states as diverse as Iowa and Louisiana.
It appears you are requesting a lump-sum appropriation, to replace the several line items that currently make up the Refugee Assistance account.
What is the reason for such a change?
Answer. We are not requesting any change in the appropriation structure for this account. At the time the budget was submitted, we did not recommend a distribution of the appropriation by activity because of uncertainties about the refugee flow and the funding needs for cash and medical assistance. The principal question is how much will be needed to continue the special programs of refugee cash assistance and refugee medical assistance (RCA and RMA) during a refugee's first 12 months in the U.S.
As soon as we have more information on States' current FY 1991 expenditures, we will be able to estimate this better, and we expect to provide the Committee with a proposed distribution of funds by activity in May.
DROP-OFF IN EDUCATIONAL CLASSES
By the end of calendar 1990, amnesty applicants were required to have completed educational courses and passed English/civice exams, to avoid reverting to illegal alien status.
Question. allen status?
How many amnesty applicants have reverted to illegal
Answer. The Immigration And Naturalization Service, U.S. Department of Justice, which handles adjudication of these cases, does not keep statistics on the number of applicants who have reverted to illegal alien status because of failure to complete educational courses and pass English/civics exams.
Question. Do you expect to see a significant drop-off in educational classes in FY8 1991 and 1992, when further attendance is strictly voluntary?
Answer. Yes, FY 1991 applications indicate that enrollment in educational classes is beginning to decline. This decline is expected to accelerate in FY 1992. In terms of costs, updated costs for adult education for FY 1990 were $243 million; however, States' estimates for costs for adult education for FY 1991 totaled only $174 million, a decrease of $69 million or 28 percent.
COMMUNITY SERVICES DISCRETIONARY GRANTS
Question. What has been done to eliminate the backlog of community services discretionary grants awaiting closeout? What recoveries of grant funds have resulted?
Answer. In February 1991, staff in the FSA Discretionary Grants and Contract Review Branch reached its FY 1991 professional staffing complement of eight grants management specialists. These personnel resources to date have been directed towards the acceptance of the terms and conditions placed upon grants awarded in the last quarter of FY 1990, negotiation and award of FY 1991 grants, and on the grants management clearance for FY 1991 program announcements. FSA's request for the Program Administration account includes additional staffing in FY 1992 to accomplish closeouts and closer monitoring of grantees' financial performance, in addition to other FSA responsibilities.