When viewed in current dollars (table 1), average energy prices decreased or remained about the same since 1985, except for electricity which increased somewhat in 1989. The composite average fuel price rose only slightly from $9.80 in 1985 to $9.82 in 1989.

When viewed in constant dollars (table 2), average energy prices consistently decreased. The composite fuel prices declined from $11.29 in 1985 to $9.35 in 1989. However, for those households served by LIHEAP, their net home heating burden was 0.7 percent lower on average in fiscal year 1989 than in fiscal year 1981. At the same time, the average home energy burden of low income households declined from 8 percent of household income to 5.4 percent of household income, indicating a reduced need for LIHEAP in offsetting home energy costs as a percent of household income.

Therefore, the President's budget request is consistent with the decline of the average home energy prices after adjusting for inflation.

For more information see the Low Income Home Energy Assistance Program-Report to Congress for Fiscal Year 1989.

TABLE 1.-AVERAGE PRICE BY FUEL TYPE AND BY YEAR'

[Dollars per mmbtu]

'In current (nominal) dollars-not adjusted for inflation.
2 Composite (all fuels) average is weighted based on the amount of each fuel (that is, electricity, natural gas, and fuel oil) purchased for residential use.

TABLE 2.-INFLATION ADJUSTED AVERAGE PRICE BY FUEL TYPE AND BY YEAR'

2 Composite (all fuels) average is weighted based on the amount of each fuel (that is, electricity, natural gas, and fuel oil) purchased for residential use.

ELECTRONIC BENEFITS TRANSFER PILOT PROJECT

Senator HARKIN. Thank you very much.

Senator Mikulski hoped to be here. However, she had to be in Baltimore and could not be here. She wanted me to raise this issue with you.

Maryland currently participates in a pilot project to provide AFDC, food stamps, and child support benefits using electronic benefits transfer. The project has been successful in Baltimore City and the State with approval from OMB and the Department of Agriculture. They would like to test the project on a statewide basis rather than just in Baltimore.

The Family Support Administration has some technical concerns that Maryland officials believe can be easily resolved even if the program is operating statewide.

Given these assurances, why is the Family Support Administration refusing to authorize expansion of this effective, cost-saving program, especially since other Federal agencies, particularly OMB, are supportive?

Ms. BARNHART. Let me say, Mr. Chairman, this is a situation that I am on top of on a daily basis. In fact, I have raised a number of concerns about expanding the scope of that pilot EBT project from Baltimore County out to the State of Maryland as a statewide project. Let me point out and mention for the record just a couple of the reasons that I think are particularly important in terms of my objection at this point and also mention that I am working with the Office of Management and Budget, the Food and Nutrition Service, and the State of Maryland to resolve.

One of those concerns, Mr. Chairman, is the fact that as a demonstration project obviously we are interested in demonstrations for potential replication purposes. In the State of Maryland the vendor has made a proprietary claim on the software that has been developed during the demonstration project and up to this point in time is refusing to allow it to be duplicated and used elsewhere. Obviously, that substantially negates any benefit that could be derived from a demonstration project.

So one of the terms and conditions that I am requesting in terms of expanding the project statewide is that the vendor would have to agree to make all software available to anyone who would choose to use it after this demonstration is completed and to release its proprietary claim.

A second point of particular concern to me is the fact that in the proposal there is the possibility they will be reducing the number of times that an AFDC recipient could access funds through an ATM machine. As I am sure you can appreciate, Mr. Chairman, given the neighborhoods some of the AFDC recipients live in, it is not a good idea to have to withdraw large sums of money from an ATM machine. Rather, it is better to be able to draw the money out as you need it and as you are going to spend it.

A further concern of mine is that the cost per transaction to AFDC recipients that they are talking about could be anywhere from 50 cents to $2 per transaction, and since we are talking about people who are already some of the most vulnerable and certainly some of the poorest in this Nation, I really do not think that we

should be promoting projects that are going to charge recipients of welfare programs a fee to access the welfare dollars they are being paid.

Those are just a couple of my concerns, Mr. Chairman. I could provide more for the record, but my hope is that by the time the record is printed this issue will be resolved. Again, as I said, I have been in contact on a daily basis with OMB, the State of Maryland, and FNS, and we hope to reach an early resolution next week.

GROWTH IN AFDC CASELOADS AND COSTS

Senator HARKIN. I appreciate that.

One last question on AFDC. Federal welfare payments are expected to increase by $1.1 billion in fiscal year 1992, for a total of $14.5 billion. The number of families receiving AFDC benefits is expected to grow to 4.46 million in fiscal year 1992 compared to 3.97 million in 1990. In other words, the welfare caseload grows, AFDC grows, and we have to put out more money.

What do you see as the major reasons for the growth in welfare costs and the increasing caseloads?

Ms. BARNHART. Mr. Chairman, that is a question that I have been asked a lot lately by other Members of the Congress and by reporters and people interested in welfare and public policy issues. I would tell you that I wish I had a precise answer to give you, but I do not. I can tell you some of the things that we think have contributed to the recent caseload increase: things like economic downturn in some parts of the country, New England in particular; and things like integration of services and one-stop shopping.

The conjecture is, quite frankly, Mr. Chairman, that we are doing a more effective job of outreach and making programs and benefits available to people, and they are taking advantage of that. So on the one hand I suppose you could say the programs are working.

We are concerned about it because this caseload growth is sort. of an anomaly. Generally what happens is that when the unemployment rate goes up, there is a 6-month lag time before the AFDC caseload goes up. We did not have that situation. The rise that you are talking about really began in August 1989, almost concurrent with some of the economic slowdown we saw in New England in particular.

We are very concerned about this new phenomena that we are unable to explain fully. We are getting ready to undertake a study as part of our research and evaluation program for the current year to look at factors that affect the caseload, not just in this particular circumstance, but to get a better handle on that for future fluctuations in caseload as well. It is something that we are monitoring closely and have some of our most talented research and evaluation folks looking at.

Senator HARKIN. Thank you again for appearing here. Keep up the good work, and I look forward to working with you during the remainder of the year.

Ms. BARNHART. Thank you, Mr. Chairman. I appreciate the opportunity.

38-711 0-91-4

QUESTIONS SUBMITTED BY THE SUBCOMMITTEE

Senator HARKIN. There will be some additional questions from various Senators which we will submit to you for your response.

[The following questions were not asked at the hearing, but were submitted to the Department for response subsequent to the hearing:]