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The Administration agrees that IV-D services are essential to non-AFDC families, often helping them to maintain or attain selfsufficiency. The welfare cost avoidance factor, measured to be approximately $1 in savings to the AFDC, Food Stamps and Medicaid programs for every $5 in non-AFDC collections, remains valid. Further, the long-range financial benefits of paternity establishment significantly outweigh the initial investment in terms of support collected, even if such collections are not immediately forthcoming.
Question. Is it true that most States currently do not charge a fee to non-AFDC families who apply for child Support Enforcement services. If so, what reasons do the States give for this policy?
Answer. Current statute requires an application fee of no more than $25 be charged for IV-D services, but allows the State to pay the fee out of State funds, charge the applicant, or attempt to recover the fee from the obligor. As a result, many states absorb the application fee or impose a minuscule fee, such as one dollar or less, to avoid charging any non-AFDC applicant a fee. State's reasons may include that absorbing the fee is administratively simpler than collecting a fee in each case, a belief that services should be provided without cost to the applicant and that in light of generous Federal funding for support enforcement services, the dollar cost to the State of absorbing a nominal fee outweighs the potential consumer resistance to a higher fee structure.
QUESTIONS SUBMITTTED BY SENATOR ARLEN SPECTER
LOW INCOME HOME ENERGY ASSISTANCE
Question. A recent GAO report examining the effect of funding cuts in the LIHEAP program found 800,000 fewer households received assistance between FY' 86-89, a cut of 12 percent. In Pennsylvania the cut was over 20 percent. Given these cuts, the instability of energy prices and the uncertainty of the nation's economy, why does the administration recommend cutting the program another 40 percent?
Answer. In viewing the need for LIHEAP assistance, it is important to consider what is happening with the household energy burden, i.e., the average percent of household income that is spent on home energy. The President's budget takes into account the average decrease in household energy burden that has occurred between FY 1981 and FY 1989.
More specifically, the average percent of income spent by LIHEAP recipient households for home heating (after the receipt of LIHEAP heating assistance) declined 26 percent from 2.7 percent of household income in FY 1981 to 2.0 percent of household income in FY 1989. At the same time, the average percent of household income spent by low income households on home heating and cooling declined 32 percent from 8.0 percent of household income to 5.4 percent of household income. This decline in the household energy burden indicates a reduced need for LIHEAP in offsetting home energy costs as a percent of household income.
The President's budget includes a request for a FY 1992 appropriation of $925 million for LIHEAP, plus a $100 million contingency fund to be released if heating oil prices are more than 20 percent above historical levels.
Question. Based on historical state patterns, how many households do you estimate will be eliminated from the program under your proposal?
Answer. Because LIHEAP is a block grant which affords the grantees flexibility in designing their energy assistance programs, there is no direct correlation between reductions in federal
appropriations and households served. The LIHEAP grantee may supplement their federal appropriation with State or oil overcharge monies, not exercise their option to transfer funds out of LIHEAP into other block grants, eliminate a service component such as cooling or weatherization or reduce the size of the benefit provided. Because of the flexibility of the block grant, we are unable to estimate the number of households that will be served under any level of federal appropriations.
It should also be kept in mind that other low income programs also are available to assist with shelter costs, including housing programs, AFDC, SSI and other indexed entitlement programs which include a component for energy costs and energy price increases.
Question. The GAO report indicates that between 1986 and 1989 there was a growth in the number of LIHEAP households with elderly or handicapped individuals. What options exist for these households, which often are on fixed incomes, should their LIHEAP benefits be terminated?
Answer. The LIHEAP block grant statute requires grantees to target benefits to the low income households most in need. It also contains provisions to assure that eligible households--especially households with elderly and handicapped members--are made aware of LIHEAP and similar assistance and that eligible individuals-especially those who are physically infirm--have the opportunity to apply for assistance at accessible sites.
Also, there are a number of sources of assistance for home energy costs, in addition to LIHEAP. LIHEAP is intended to supplement these sources and the household's own income. Other Federal programs, such as SSI, AFDC, and housing subsidies, provide assistance for home energy costs, and the Deg ctment of Energy's Weatherization Assistance Program helps to reduce home energy bills. We believe that States share responsibility for their low income citizens, also. States can designate their own funds for LIHEAP or can use other programs that provide assistance for home energy costs. Consistent with their priorities, States can designate oil overcharge funds and funds from two other HHS block grants for LIHEAP. However, it should be noted that the majority of States continue to transfer LIHEAP funds to other block grants and no transfers were made into LIHEAP in FY 1989 and FY 1990. In addition, there are many private sources of assistance, including utility companies (through budget payment plans, for example) and private fuel funds and weatherization efforts.
Question. How much did the states receive in oil overcharge funds in FY '90 and how much does the Department estimate will be released to the states in FY '91 and FY 192?
Answer. States received approximately $135.2 million from oil overcharge distributions, all from Stripper Well funds. This $135.2 million includes $123 million from Texaco and $12.2 million in other Stripper Well distributions.
Based on our communications with the Department of Energy (DOE), approximately $100 to $150 million wili be distributed to the States each year for FY 1991 and FY 1992.
Question. What percentage of the oil overcharge funds allocated to the states in FY '89 and FY '90 were used for LIHEAP?
Answer. The Department of Energy (DOE) is the main source for information and estimates regarding the amount of oil overcharge funds states have received and what portions states have designated for the eligible programs. DOE provides us with reports on the cumulative dollars designated by the states from 1986 to date. The information does not specify amounts expended in each fiscal year for LIHEAP or the other eligible programs.
The most recent report from DOE shows that states have designated approximately $4 billion of the combined Exxon and Stripper Well funds they have received through FY 1990. of this $4 billion, approximately $895 million has been designated for LIHEAP. This is about 22% designated for LIHEAP out of all funds designated for the eligible programs.
Question. How many households do you estimate are eligible for LIHEAP assistance? What percentage of the eligible population did the program serve in FY 90 and FY 917
Answer. Our latest estimate for FY 1990 indicates that 5.8 million households were assisted with heating costs. Based on preliminary estimates of eligible households derived from the Bureau of the Census' March 1990 Current Population Survey, the 5.8 million households constitute:
23 percent of the 25.4 million households eligible under
We will have a preliminary estimate in April 1991 of the number of households that states plan to assist in FY 1991. However, we will not have an estimate of the number of LIHEAP eligible households in FY 1991 until data from the March 1991 Current Population Survey is available in September 1991.
Question. What is the average income of LIHEAP recipients? How does this compare to the average income nationally? What is the average cost of household energy costs?
Answer. Based on data from the March 1990 Current Population Survey conducted by the Bureau of the Census, the average income of those federally eligible LIHEAP households receiving heating assistance from October 1990 - March 1991 was $7,861. This compares with $9,747 for all federally eligible LIHEAP households and $36,520 for all U.S. households. We should have FY 1990 data on household energy costs available in April 1991. The average cost of household energy costs for FY 1989 has been estimated to be as follows:
for total residential energy, the average household cost was
Question. In fiscal years 1989 and 1990, Congress provided funding to meet the program shortfalls in the previous fiscal year for the Voluntary Agency Matching Grant Program. Do you anticipate a shortfall in the program for fiscal year 1991? How many refugees were resettled under the program in FY '89 and FY '90, and how many do you project will be resettled in FY '91 and FY '922
Answer. We anticipate having sufficient funds to cover FY 1991 arrivals. In FY 1989 and FY 1990, respectively, 32,265 and 33,580 refugees were resettled through the matching grant program. Approximately 40,000 refugees are expected to be resettled through the matching grant program in FY 1991. We have not yet projected the number for 1992.
Question. When and how will decisions be made on the recommended allocation to the Matching Grant Program for FY '92.
Answer. We expect to provide the Committee with a proposed distribution of funds by budget activity in May.
Questions. On July 3, 1989 Secretary Sullivan submitted a report on the Community Food and Nutrition Program. Included in the report was an overview of the program's accomplishments as well as a summary of the FY 1987 program grants. Is there a more recent report on CFNP grantees and accomplishments? If so, please provide a copy to the Subcommittee.
Answer. Yes. The FY 1988 CFNP Annual Report is in final clearance at the Department of Health and Human Services and will be submitted in the near future to the Chairman of the Committee on Education and Labor and the Chairman of the Committee on Labor and Human Resources as mandated by legislation. We will be happy to make copies available to this Committee.
CHILD CARE BLOCK GRANT
Question. In FY 1991 Congress appropriated $731.9 million, however, these funds will not be released to the States until September 7, 1991. When do you plan to issue regulations regarding the use of these funds.
Answer. The Family Support Administration is moving quickly to issue preliminary guidance on the Child Care and Development Block Grant to the States. We plan to issue regulations by late spring.
Question. will the block grant program address the need for coordination between various child care programs to ensure that children enrolled in part-day, or part-year programs have easy access to complementary child care services that could provide a family with full-day or full year services.
Answer. The Child Care and Development Block Grant Act requires the lead agency in each State to coordinate the provision of Block Grant services with other Federal, State and local child care and early childhood development programs. We will encourage States to develop service delivery systems which provide a complete day of child care service that would meet the varying needs of children and families.
We have met with Head Start staff, as well as with representatives from a number of national child care and development organizations to discuss coordination of services. In addition, as
develop the regulations for the Child Care and Development Block Grant, we are considering issues of coordination with At-Risk-child Care, Transitional Child Care and Title IV-A Child Care.
QUESTIONS SUBMITTTED BY SENATOR MARK O. HATFIELD
Question. In my experience the Community Services Block Grant Program provides support at the local level which is vital for enabling communities to respond quickly to unmet needs of low-income families and to providing emergency assistance in times of crisis. Why does the Administration repeatedly seek to eliminate support for the block grant?
Answer. The Administration's request for the Community Services Block is based on the fact that the Community Action Agencies and other local organizations that historically have received Community Services Block Grant and discretionary funds have been successful in obtaining funding for similar purposes from other sources. In general, Community Services funds now represent a small fraction of the operating budgets of most of these organizations. The more successful of these organizations are no longer dependent on the Community Services funding. Funding for services provided under CSBG is available from a number of other Federal programs, as well as State, local and private sources.
Question. Doesn't this run counter to the recent talk of returning decisions of allocating Federal resources to the State and local level.
Answer. No. The budget request for CSBG is separate from the Administrations' proposal to consolidate a variety of Federal programs into one block grant to States and allow States the flexibility to determine the purposes for which funds will be allocated at the local level. The Administration's request reflects the hard choices that must be made during a period of severe budget constraints.
Question. To what extent do the "other Federal funds" which Community Action Agencies receive provide the same degree of flexibility as CSBG dollars responding quickly to local community needs?
Answer. Funds from other Federal sources which are provided to or administered by CAAs and local community organizations must be used for the purposes mandated by the Congress in the authorizing legislation for the various programs. The block grant programs provide considerable flexibility while other programs are targeted on particular problems and needs. Some of these other Federal programs that provide similar services include the Social Services Block Grant, the Low-Income Home Energy Assistance Program, the Community Development Block Grant Program, the Supplemental Food Program for Women Infants and children, Head Start, the Child Care and Development Block Grant and meals and food distribution programs operated by the Department of Agriculture.
Question. The President's budget request does not include recommendations for the distribution of domestic refugee resettlement assistance funds. When will decisions be made on the allocation of these funds?
Answer. We expect to provide the Committee with a proposed distribution of funds in May, when we have more information on States' current FY 1991 expenditures.
Question. Is it expected that refugee flows in FY'92 will be significantly different than those in FY'91?
Answer. Barring an unexpected refugee emergency, we expect the FY 1992 refugee flows to be similar to those in FY 1991.
Question. What is the status of the award process for the Social Service, Targeted Assistance and Preventive Health programs?
Answer. Social service grants have been awarded for the first two quarters of FY 1991. Preventive health grants will be awarded in July, and targeted assistance grants will be awarded later in the year, following the issuance of notices of targeted assistance formula allocations and of competitive applications for the 10 percent of targeted assistance funds designated for most heavily