and house the children has not been used for this purpose but has been squandered. * * * 99 In Vilas County of Wisconsin, the board of supervisors also went on record in stating that in not a few cases, cash disbursed under the aid-to-dependent-children program has been spent on liquor and on unwise and uncalled for purchases of luxury items, thereby depriving the children of the necessities of life. In Lincoln County of Wisconsin, to mention another instance, the board of supervisors felt it necessary to adopt a resolution expressing its deep concern about misuse of funds intended for the support of dependent children by adults receiving such payments. These are not, by any means, isolated cases. My mail reveals that similar abuses are in evidence in other parts of my State, and in other States. These developments should be of deep concern to the Congress, and particularly to your commitee which has developed the legislative framework of this program during the past quarter of a century. I am, therefore, calling them to your attention. FEDERAL LAW INADEQUATE TO PREVENT ABUSES A question can be asked at his point: "Who is responsible for this sad state of affairs?" I regret to say that the evidence on record points to only one answer: The Federal law is inadequate to prevent the recurrence of such abuses as I have just mentioned." I will explain why this is so. Title IV of the Social Security Act specifies that aid to dependent children, and people caring for them, must be made in the form of money payments. In the absence of a clear congressional mandate on this point, the Department of Health, Education, and Welfare has interpreted the law to mean that no restriction whatsoever and no conditions may be imposed on the payment of these benefits. Neither the Federal Government, nor State governments, nor local agencies are allowed to provide that these funds be used for the welfare and needs of the dependent child-the very purpose for which the money is given in the first place. This, of course, is an intolerable state of affairs. Far from providing some protection against abuses, the law, as interpreted by the Department of Health, Education, and Welfare, has an inbuilt prohibition against any such safeguards. LOSS OF FEDERAL FUNDS FOR RESTRICTIONS I was astounded to learn to what extremes the Department of Health, Education, and Welfare has gone in implementing this interpretation of the law. I was advised by the Officer of the General Counsel, for instance, that they have withheld Federal matching funds in individual cases where State agencies have tried to tell recipients of aid to dependent children for what purpose this aid can be used, or paid child-support bills for the beneficiary. I was further advised that a State can lose Federal matching funds entirely if it should place any restriction or conditions on this type of assistance. I understand that one State legislature was considering a bill which would prohibit recipients of aid to dependent children from spending their benefits on alcoholic beverages and tobacco. Such a bill, admittedly, may have attempted to go too far. The fact remains that the State was advised that the passage of the bill could result in total withdrawal of ADC funds. The bill, understandably, was not enacted. LOSS OF FEDERAL FUNDS FOR PROSECUTION UNDER STATE LAW There is also the possibility, I am told by the Department, that a State which prosecutes ADC recipients for using the funds for other than child welfare purposes, can lose the entire Federal contribution. This, of course, creates a chaotic situation. It promotes conflict between Federal and State law, and prevents a State or a local government from taking any action to punish even the most flagrant abuses. The State of Wisconsin, to give you an example with which I am familiar, has a statute making it unlawful for recipients of relief funds to use them contrary to the purpose for which the funds are provided. Our local enforcement authorities have been advised in the past that prosecution of recipients of aid to dependent children under this State law would involve the risk of losing Federal funds. And so we find ourselves in a situation in which local law enforcement authorities either have to ignore even repeated and flagrant violations of State law, or run the risk of losing Federal support for the aid to dependent children program. SECTION 107 OF H.R. 10032 PROVIDES NO SOLUTION At this point, I can assure the committee that section 107 of H.R. 10032, ostensibly designed to cope with the growing problem in this area, does not provide any workable solution whatsoever. This section admittedly takes cognizance of the fact that abuses do exist, and that something should be done about them. The remedy proposed, however, is so cumbersome and so limited as to be ineffectual. I would like to elaborate on this statement, by reviewing the remedy proposed in section 107. PROVISIONS OF SECTION 107 Section 107 provides for the appointment of a personal representative in cases in which the relative of the child receiving ADC funds has demonstrated that he or she is unable to manage them. The determination that the child's relative is unable to manage these funds must be made, however, by a State agency. It cannot be made on the local level by welfare authorities who have worked with the person and are intimately acquainted with the case. This removal of meaningful authority from the field would be inefficient and would involve unnecessary delays. The bill does not, however, stop here. It requires the States agency to become an economics instructor and an examiner-functions normally reserved to local welfare authorities. I say this because section 107 provides that, after the appointment of a personal representative, the State agency has to see to it that special effort is exerted to develop ability to manage money on the part of the child's relative. Furthermore, the State agency would be required to periodically review each case in which a personal representative was appointed, to determine whether the child's relative is still unable to manage money. SECTION 107 OFFERS A TEMPORARY SOLUTION AT BEST This, however, is not all. The device of a personal representative proposed in section 107, aside from involving delays and transfer of local responsibility to a State agency, provides a temporary solution at best. I say this because section 107 has still another requirement. When the inability to manage funds continues over a certain period of time, legal guardian must be obtained in place of the personal representative. The complexity and expense involved in the legal guardian remedy have been recognized by the ad hoc committee on public welfare in its report to the Secretary of Health, Education, and Welfare last September. On pages 36 and 37 of its report, the ad hoc committee stated that the legal guardian remedy is often too complicated and expensive. The committee went on to say that this device will not take care of all cases where the child's relative is unable to manage money. Frankly, I cannot see why the administration included this provision in the bill. I presume that the "personal representative," before being appointed, must demonstrate reliability and ability to manage If we accept this assumption, why should the law require expensive legal steps to replace him with a court-appointed guardian after a certain length of time? money. SECTION 107 REMEDY RESTRICTED TO VERY FEW CASES Apart from proposing a cumbersome and otherwise unsatisfactory procedure, section 107 (b) limits the availability of this remedy to one-half of 1 percent of the number of recipients of aid to families with dependent children. In other words, for every 1,000 recipients of aid, only 5 personal representatives may be appointed. This appears to me like an arbitrary limitation, totally unrelated to a situation that may exist in a particular community, or a particular State. Surely the law ought to provide a more flexible approach. There is no law on any statute book in the United States which restricts human talents, or weaknesses, to any percentage of the population. Human beings are not machines to be fitted into statistical patterns ordained by the State. What type of a provision is this? Who dreamed it up? Who can say that one-half of 1 percent of recipients of aid to families with dependent children cannot manage money? Or, conversely, that 99.5 percent can? I believe that law should be based on fact and reason, not on some fixed assumption dreamt up by a statistically inclined bureaucrat. Let me repeat: the remedy proposed in section 107 of the bill before your committee is no remedy at all. It undercuts the basic principle of local responsibility. It provides a time-consuming, expensive, and cumbersome procedure. And it tries to jam human behavior into a statistical trap. H.R. 9168 PROVIDES A SOUND APPROACH Members of the committee, we have a problem on our hands, and this problem will not be solved by the proposal suggested in the administration's bill. I would, therefore, strongly recommend that your committee substitute, in place of section 107, the text of H.R. 9168, the bill which I introduced several months ago. This bill, in my opinion, reflects a sound approach. It leaves responsibility where it should be-in the hands of local authorities who are fully competent to deal with abuses if the Federal Government would not prevent them, as it does today, from doing it. It does not create a cumbersome procedure which could only result in increased bureaucracy, ineffectual help to the recipients of aid to families with dependent children, and additional expense to the taxpayer. And it does not try to statistically predetermine human frailties. CONCLUSION Mr. Chairman, in conclusion, I would like to repeat what I said earlier: We cannot continue to condone the paradox of a Federal law which has a specific purpose, but which is administered in such a way that its purpose cannot be implemented. We have a program of aid to families of dependent children, and funds provided under this program should be spent for the welfare and needs of these children. They should not be spent for other unrelated and sometimes unwise purposes. It is our responsibility to see that these funds are spent for the purpose for which they are provided. My bill, H.R. 9168, may not provide the complete or the best solution to the problem at hand. But I believe that it is a step in the right direction. The course of action it proposes has been officially endorsed last year by the Wisconsin State Legislature, by the Milwaukee County Board of Supevisors, and by other local welfare authorities. I earnestly commend it to your committee's careful consideration. Thank you. The CHAIRMAN. Our next witness is our colleague from California, the Honorable John F. Baldwin. Mr. Baldwin we appreciate your taking time to come to the committee this morning; and you are recognized, sir. STATEMENT OF HON. JOHN F. BALDWIN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. BALDWIN. Thank you, Mr. Chairman. Mr. Chairman, I have distributed, I believe, to all members of the committee a proposed amendment, together with three supporting letters, and I would like unanimous consent to have that inserted in the record at the beginning of my testimony. The CHAIRMAN. Without objection it will be included in the record. (The material referred to above follows:) PROPOSED AMENDMENT TO SECTION 152 ON PAGE 67 OF H.R. 10032 SUBMITTED BY CONGRESSMAN JOHN F. BALDWIN OF CALIFORNIA "Section 152 should be revised to read as follows: "Section 152(a) clause (2) of section 408 (a) of the Social Security Act is amended to read “(2) for whose placement and care the State or local agency administering the State plan approved under section 402, or any other local public agency either supervised by the State agency administering or supervising the administration of such State plan or authorized to place and supervise dependent children under the laws of the State, is responsible." "(b) Clause (2) of section 408 (f) of the Social Security Act is amended to read "(2) use by the State or local agency administering the State plan, to the maximum extent practicable, in placing such a child in a foster family home, of the services of employees, of the State public welfare agency referred to in section 522 (a) (relating to allotments to States for child welfare services under pt. 3 of title V) or of any local agency participating in the administration of the plan referred to in such section, who performs functions in the administration of such plan, or of the services of employees of any other local public agency authorized to place and supervise dependent children under the laws of the State." "(c) The last sentence of section 408 of such act is amended by inserting before the period at the end thereof "or has been approved, by the State public welfare agency, referred to in section 522 ( a ), as meeting the standards established by such agency for foster family homes." Hon. JOHN F. BALDWIN, CHAMBERS OF JUDGE OF SUPERIOR COURT, Representative in Congress, House Office Building, Washington, D.C. DEAR MR. BALDWIN: It has been called to your attention that last year Congress passed a law which makes possible Federal participation in aid to needy children grants to children in foster homes. This is Public Law 87-31. We further understand that the law is presently being interpreted in such a way that juvenile court wards in foster homes under the supervision of the probation department would not be eligible. We understand that the present interpretation is that in order for the grant to include Federal funds, the juvenile court wards would have to be placed under the supervision of the welfare department. It is our considered opinion that the receipt of Federal funds to help these children should not require commitment to the welfare department. We feel that the juvenile court is in the best position to determine what agency should supervise the children. We prefer to use an agency under the control of the courts. We understand the present law expires in June but will undoubtedly be repassed. We would appreciate your attempting to amend the law so that the Federal funds can also be obtained for wards in foster homes supervised by the probation department. In addition to authorizing Federal funds for welfare placements, the amendment could include Federal funds for children placed by any governmental agency authorized to place and supervise dependent children under the laws of any State. |