the general relief population is one of the most volatile populations that we have anywhere. It is not a predictable population. We had set aside some extra money in our budget in the anticipation that the population might go up. We did not anticipate that it would go up as much as it did.

From the time that we had prepared our program and had entered into preliminary contract negotiations where we were anticipating approximately 9,000 people, that number went up to 14,000 people.

In the course of assigning those people to the various contractors, the volume of people coming in did cause misassignments to be made. There were people that went to contractors where it was not appropriate for them, either because they were running programs that were not particularly suitable to the person or they had highly specialized needs. We pulled those people back as quickly as we found them. As quickly as the contractor said to us, "I've got something wrong here," we pulled those people back and they were reassigned into the correct program areas. Now that has been done. So the assignments are correct at the present time. Now there may be somebody in a program that a contract agent doesn't feel is particularly useful but they have those-they've always had those and they have to deal with them. That's their responsibility. The other issue is, as these people do come into these programs, we have found that, when they go into the skills program, our contractors are successful in placing them. They are trainable. Not all of them; certainly not. We know they're not. Many of them, as indicated earlier, can't read. They can't write. We have to spend an inordinate amount of time in our educational programs training people just to read and write, basic skills that they have to have in order to compete in any kind of job market.

When you look at what's happened to the educational programs with the cutbacks that continue to occur in there and the kinds of people that we find trying to get into the job market, there's absolute inconsistency. Then we see on the other hand these huge cutbacks that come year after year in the Federal training programs, and we're locked into large numbers of people that simply are not going to get training. If we put every penny of our money into training the AFDC mother, we would train only a tiny percentage of those that want and need training. There is simply not enough money there.

Mr. Hufford called for an increase in the funds that are available to us. These funds need to be increased dramatically. There is just simply no way that you can offer training for the numbers of people that require training with the dollars that are available.

Mr. DYMALLY. Mr. Galloway, that's essentially the point with JTPA. You are training more people than you have money.

Mr. GALLOWAY. Well, we hope we are training more people than we have money, but I understand your point.

Mr. DYMALLY. There are more eligible candidates that you have put into the program than you can actually afford to train.

Mr. GALLOWAY. Well, all of the people who are in the JTPA program are eligible people. Congressman Hawkins made a point earlier that there are not as many AFDC people in those programs as he would like to see and that's a fact. But that comes back to the

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availability of the total dollars. We don't have ineligible people in our program. They are all eligible.

Mr. DYMALLY. How many people now are under training?

Mr. GALLOWAY. At the present time?

Mr. DYMALLY. In the county. Yes.

Mr. GALLOWAY. In our service delivery area, we have approximately 3,200 people in our JTPA training slots contract.

Mr. DYMALLY. Do you have jobs for them when the training is completed?

Mr. GALLOWAY. We only pay our contractors if they do place the people in jobs at the conclusion of the training.

Now I'm not saying that they will all get jobs. They won't. There's never been a program operated anywhere where they did, but there will be probably 35 percent of those people that do get on subsidized employment out of jobs.

Mr. DYMALLY. If they don't get jobs, would they be eligible for general relief again?

Mr. GALLOWAY. Yes; these people do not lose any money if they come into these programs. That's an important point, Congressman. I'm glad you mentioned that. In the programs that the county operates, a person who was eligible for general relief received a stipend. He also received health benefits and food stamps. A person who comes into our employment and training program continues to receive the stipend. He does not lose any money. He continues to be eligible for the food stamp benefits and for health care benefits. If a person is not successful in our program, we do not dump them back out onto the streets without any money. They continue in the training programs until we are able to help them or until they find employment or go someplace else. We are not making an effort to simply dump people. That's not our intention. Mr. DYMALLY. The former chairman of the board, Mr. Terry, came by my office and painted a very optimistic picture of your program, which led me to suggest to him that he ought to talk with the staff. He did talk to the staff and gave the staff the impression that I too was enthusiastic. No; I was just trying to be objective. Mr. GALLOWAY. We were hoping you would be enthusiastic, but we realize that you were being objective.

Mr. DYMALLY. Considering your enthusiasm, Mr. Hufford's enthusiasm, the three members of the board, and Mr. Terry, there are at least six people in the county supporting this program.

Why is it there is so much criticism of the program? Why are there so many lawsuits? Why are two supervisors and a number of people in job training so unhappy with the progress?

Mr. GALLOWAY. For different reasons. The two supervisors are unhappy because of the way in which the service delivery areas segment the county, the limited dollars that are available make it impossible for them to offer training opportunities to people who have not been on general relief. That's a serious problem and we are aware of it and we are trying to deal with it. We had hoped that we would be successful in getting some of the other service delivery areas to provide training opportunities for those general relief recipients who reside in their service delivery boundaries. We have not been successful in doing that. That forced the burden back on the county. So they do not like that.

Now I can't explain what goes through the minds of lawyers that persist in filing lawsuits on various points of our general relief program except that they have been very successful in forcing the program more and more away from employment and training and more and more back into a welfare model which I do not believe is productive in the long term.

Mr. HUFFORD. That's right.

Mr. DYMALLY. I appreciate the very forthright response to my question by the CAO. He is saying, in effect, that for some people there is no relief and, therefore, when I have my forum in Compton on Saturday, when I'm asked about this program, I should just say, "If you are not on benefit payments and seek entry, there are no opportunities for you."

Mr. GALLOWAY. Well I would hope that you would add to that that you would then do whatever you can, as you have in the past so persuasively, to make available additional funds at the Federal level to expand those training opportunities. Congressman, it's almost ridiculous to say that to you, gentlemen, because you have been at the forefront of the effort to try to make funds available, so you're not the ones that we need to keep talking to. But the funds are the problem. The lack of funds that come to this county hurts these folks and we cannot provide the training programs that people need without those funds.

Mr. DYMALLY. One final observation.

I think that what was envisioned through the JTPA was something like your pilot project. You would have taken the JTPA money and taken a selected few people and you would have trained them rather than use the money for general relief. Therefore, you would have been able to target the money and give training to those people who would have been most able to go back into the job slot from which they came or something related very shortly.

Mr. GALLOWAY. We've learned a lot from the experience we've had, and I think that the effort that Mr. Hufford was talking about earlier in trying to deal with some modifications in the program might very well put us back into that particular posture. We have far too many people in the two programs that we operate to deal with this problem successfully at this point in time. The board has reduced the intake into my programs by 50 percent. Mr. Hufford has recommended that that be deferred by the other 50 percent until such time as we can make sure that we have all of these contracts and all of these efforts in place. We are very conscious of that and some of the criticism that has been directed has been legitimate criticism. Most of it has been a misunderstanding of our intent, but we are trying to deal with that in a constructive way. We are making changes, and I suspect that, before long, the program will be modified along the lines that you are describing. Mr. DYMALLY. Thank you very much, Mr. Chairman. That's all.

Mr. HAWKINS. Mr. Galloway, you referred several times to our efforts to get more Federal money into the program, but when we get back to Washington and we tell them that the county of Los Angeles is using Federal money in order to reduce its general relief rolls, you are either going to get less money or you're going to get a prohibition against that use.

Mr. GALLOWAY. Well, I think that would be very unfortunate, Congressman, if that happened, because I think that the fact is we are training people who are eligible for this program. The distinction that is made many times is that there is somehow better eligibility for a person who is receiving aid to families with dependent children than there is for a person who is receiving general relief. We tried not to make that distinction.

We have found that the general relief recipient is the most difficult person that will attempt to break the welfare cycle. If we can break the welfare cycle at that point, then we have no doubt that that is going to have a salutary effect on a lot of the welfare programs that are now operating.

Mr. HAWKINS. Well, we don't disagree with you. We would hope, however, that you would seek welfare reform and not seek to use a program which is not designed to aid the county in reducing its own responsibility toward the general relief client. You should do it directly and not use a program which is not designed to do that in order to accomplish an objective which we concede is a desirable one. But the Federal Government is not in the welfare business.

Mr. HUFFORD. I want to interrupt for just a moment. One of the interesting things that has happened is this program has surfaced the general relief problem which has been invisible in this community for a long time. There are some great advantages, from my viewpoint as the budget officer for the county and having to work with the issue of funding a program like this and the great demands that are placed on our local resources, which, as you know, are very much limited now. What is really happening is we're putting more money into this program, not less. We have not avoided costs. We've added to our costs by-probably through inadvertence, putting more investment into training general relief recipients with local dollars than we had heretofore. The consequence of the reaction is that we're beginning a hasty retreat. We are going back to what Mr. Galloway described. We're going to go back to general relief, tight eligibility in our public social services department, and nonreferral of general relief or limited referral to work training. I think it's too bad, quite frankly. I think it's the pragmatic thing that we're going to have to do because of the indications that you will have difficulty in Washington. This is seen as a use of Federal funds to avoid the county costs, and, in fact, it has resulted in—just that situation-I agree with Mr. Edelman. We are spending more money than we otherwise would have. Actually I would argue, though, that we are investing more money in people than we probably intended to do. That's not so bad, but I think what's happening as a result of all of this is we're going to quickly go back into our various positions and administer a separate general relief program and a separate work training program and not use a resource that could have been very helpful.

Mr. HAWKINS. Well, I'm afraid the type of training you're going to be able to give them out of the limited resources that you make available and the failure to provide supportive services and the other things that these individuals need-you're going to have individuals that are going to be reapplying for relief. I suspect again we're going to find, as we have in the past, that it is very difficult to get back on relief, so they're going to be harassed, they're going

to be embarrassed, they're going to go through a lot of human suffering. Unfortunately, that is what I anticipate may happen. I hope I am wrong, but we certainly look with great concern on the way it's being handled. Isn't it unfortunate that other SDA's aren't doing what we are doing. Well, you want them to follow the same mistakes that you are making. I think it's to their credit that they are trying to follow the law and not trying to use it as a means of providing it to reduce the welfare, the general relief roll. That wasn't the intent. You're saying that, because they're not doing it, you must, in a sense, violate the requirement in the law and serve those individuals because the county is responsible for the general relief plan. Let's face it. That's what it is. It's juggling money in order to reduce the budget and try to balance it, which is required by law. That's what's happening in this county. It's just a juggling of funds. You're going to get into the same trouble that we are getting into nationally in which we are going to have a $300 billion deficit. That's the way it's going to end up even in this county. I just don't think you can juggle this money around and use it just simply to reduce the county responsibility for general relief client. Mr. HUFFORD. I wanted to get this idea out-I certainly don't want to get into a debate with members of the committee. I think perhaps I ought to quit talking.

Mr. HAWKINS. We'll be back in a few months to see how well you're doing, I'll tell you that, because we're going to keep on top of this. We hope that you set a new pattern and that you set a wonderful example, but it just doesn't look like it's headed in that direction. Mr. Martinez.

Mr. MARTINEZ. I appreciate Mr. Hufford's remark. I was in the marines and we never did withdraw. We always made a strategical withdrawal.

Mr. HUFFORD. Yes, sir.

Mr. MARTINEZ. Michael O'Reilly, executive director of the State job training council, says that, of the agencies in the State, your agency in Los Angeles County is the only one which has organized JTPA in this fashion. Doesn't it stand to reason that everybody else understood the intent and carried it out differently than Los Angeles County.

Mr. GALLOWAY. I think that is a misunderstanding, though, because in any county in California, the general relief population exists. I know for a fact that there are general relief recipients being trained under the JTPA program in other counties. What we have done here is to highlight a program by having a much larger component than anyone else. But, to say that general relief recipients are being excluded isn't quite correct.

Mr. MARTINEZ. No; I didn't say they're being excluded. What I'm saying is those people may be the same people, but they're coming to the program under a different-

Mr. GALLOWAY. They're coming voluntarily. They're being accepted into the program on a voluntary basis and we are requiring that, if they are assessed to be employable and have potential for skills training, they go into a training slot. That is a significant difference, yes.

Mr. MARTINEZ. That's what makes a distinction of you using that money for some